Landlords, what have you decided to do about the new amendments?

Paulw

campingcarist wrote: »

Not being 'au fait' with all this, but could you not (in an apartment complex) make the tenant pay the management service charges instead of including it in the rent?

Legally, the management fees are part of the cost of ownership. They are part of a legal contract between OMC and unit owner. The tenant is not a party to the contract.

While a landlord could ask a tenant to pay, there is no legal way to enforce it. The tenant can simply say no.

GGTrek

campingcarist wrote: »

Not being 'au fait' with all this, but could you not (in an apartment complex) make the tenant pay the management service charges instead of including it in the rent?

With new tenancies you are free to put a clause where the tenant pays management fees or any kind of other legitimate charges (services that lanldord provides that were previously included in rent like small repairs, key copies, refuse collection, letting fees, ...), but with the current tenancies you cannot do this. Considering that with the new regulations in my opinion you cannot terminate anymore after 4 years without cause, you are basically stuck.

noodler

60% increases in rent nationally (higher in some urban areas) hasn't helped supply in the last 2 years so it is understandable that society and now the Government are unwilling to buy the argument that 4% increases off an already disgraceful base will reduce supply.

Jayesdiem

Paulw wrote: »

campingcarist wrote: »

Not being 'au fait' with all this, but could you not (in an apartment complex) make the tenant pay the management service charges instead of including it in the rent?

Legally, the management fees are part of the cost of ownership. They are part of a legal contract between OMC and unit owner. The tenant is not a party to the contract.

While a landlord could ask a tenant to pay, there is no legal way to enforce it. The tenant can simply say no.

According to citizens information.ie this is a perfectly legitimate charge for the tenant. Not going looking for the link now.

Graham

Jayesdiem wrote: »

According to citizens information.ie this is a perfectly legitimate charge for the tenant. Not going looking for the link now.

Here you go:

Obligations of a tenant

You must:

Pay your rent on time
Pay any other charges that are specified in the letting agreement, for example, waste collection charges; utility bills; management fees to the management company in an apartment complex – see ‘Other charges and payments’ below

<SNIP>

There are annual charges in multi-unit developments to pay for the maintenance, insurance and repair of common areas; for the provision of common services to unit owners; and to contribute to a sinking fund for non-routine refurbishment and maintenance expenses. Your landlord may pass these charges on to you if this is agreed, but if they are not paid, the owners’ management company may pursue the owner (the landlord) for them.

Source: http://www.citizensinformation.ie/en/housing/renting_a_home/tenants_rights_and_obligations.html

GGTrek

Graham wrote: »

Jayesdiem wrote: »

According to citizens information.ie this is a perfectly legitimate charge for the tenant. Not going looking for the link now.

Here you go:

Obligations of a tenant

You must:

Pay your rent on time
Pay any other charges that are specified in the letting agreement, for example, waste collection charges; utility bills; management fees to the management company in an apartment complex – see ‘Other charges and payments’ below



There are annual charges in multi-unit developments to pay for the maintenance, insurance and repair of common areas; for the provision of common services to unit owners; and to contribute to a sinking fund for non-routine refurbishment and maintenance expenses. Your landlord may pass these charges on to you if this is agreed, but if they are not paid, the owners’ management company may pursue the owner (the landlord) for them.

Source: http://www.citizensinformation.ie/en/housing/renting_a_home/tenants_rights_and_obligations.html

yes it is legal, but you should put in bold the following "Pay any other charges that are specified in the letting agreement", you cannot change the agreement without mutual consent in a current tenancy, so for all practical effects these charges can only apply to new tenancies. I feel that many posters in this thread do not understand this critical condition. You cannot just tell your current tenant: from next month you will pay these charges unless the tenancy agreement is changed with mutual consent, which a current tenant would not grant.
So my argument is that with the repeal of section 42 and the impossibility of terminating a tenancy without cause, no new tenancy agreement can be negotiated with tenant after 4 years, so the landlord is stuck with the current tenancy agreement indefinitely unless he can prove one of the causes of section 34 to terminate the tenancy. That is why I say that the repeal of section 42 is a much stonger attack of property rights than the rent controls.
No one in this forum has been able to mount an argument that it is still possible to terminate a current tenancy without cause after 4 years with the new amendments. I would really be glad to hear such argument

dasa29

GGTrek wrote: »

yes it is legal, but you should put in bold the following "Pay any other charges that are specified in the letting agreement", you cannot change the agreement without mutual consent in a current tenancy, so for all practical effects these charges can only apply to new tenancies. I feel that many posters in this thread do not understand this critical condition. You cannot just tell your current tenant: from next month you will pay these charges unless the tenancy agreement is changed with mutual consent, which a current tenant would not grant.
So my argument is that with the repeal of section 42 and the impossibility of terminating a tenancy without cause, no new tenancy agreement can be negotiated with tenant after 4 years, so the landlord is stuck with the current tenancy agreement indefinitely unless he can prove one of the causes of section 34 to terminate the tenancy. That is why I say that the repeal of section 42 is a much stonger attack of property rights than the rent controls.
No one in this forum has been able to mount an argument that it is still possible to terminate a current tenancy without cause after 4 years with the new amendments. I would really be glad to hear such argument

I just had a look at this bill and i think you are wrong in regards to the repeal of section 42, the bill says the following and i quote

"Part 4 tenancies and extension of period from 4 years to 6 years
37. (1) Section 28 of the Act of 2004 is amended in subsection (2) by substituting “6 years”
for “4 years” in both places where it occurs.
(2) The provisions of the Act of 2004 referred to in column (2) of Part 1 of the Schedule
are amended in the manner referred to in column (3) of that Part opposite the
reference in column (2) to the provision concerned.
(3) This section applies to all tenancies created after the coming into operation of this section."

so all that is changed is part 4 is vaild for 6 years rather than 4 years at present.

GGTrek

dasa29 wrote: »

I just had a look at this bill and i think you are wrong in regards to the repeal of section 42,  the bill says the following and i quote

"Part 4 tenancies and extension of period from 4 years to 6 years
37. (1) Section 28 of the Act of 2004 is amended in subsection (2) by substituting “6 years”
for “4 years” in both places where it occurs.
(2) The provisions of the Act of 2004 referred to in column (2) of Part 1 of the Schedule
are amended in the manner referred to in column (3) of that Part opposite the
reference in column (2) to the provision concerned.
(3) This section applies to all tenancies created after the coming into operation of this section."

so all that is changed is part 4 is vaild for 6 years rather than 4 years at present.

The part above only applies to new tenancies and not to further part 4 tenancies. I don´t even know why it matters since it was useful to define the start of a further part 4 tenancy and to terminate without cause with section 42.
Please read this that was updated this week:
http://www.citizensinformation.ie/en/housing/renting_a_home/if_your_landlord_wants_you_to_leave.html
The Planning and Development (Housing) and Residential Tenancies Act 2016 contains several amendments to the residential tenancies legislation. It was signed into law on 23 December 2016. Some of the changes take effect from 24 December 2016 and some others will require Commencement Orders. The changes include:
The Planning and Development (Housing) and Residential Tenancies Act 2016 contains several amendments to the residential tenancies legislation. It was signed into law on 23 December 2016. Some of the changes take effect from 24 December 2016 and some others will require Commencement Orders. The changes include:

• Measures to prevent the simultaneous serving of termination notices on large numbers of residents in a single development
• Extending the period of a Part 4 tenancy from 4 years to 6 years - for tenancies created from 24 December 2016
• Removing the provision that allows a landlord to end a further Part 4 tenancy during the first 6 months without having to give a reason
• Changes to declarations required when a termination is due to sale of the dwelling

So the question is: how do I terminate a part-4 tenancy without cause using only section 34(b) at the 4 years. What is the practical and legal way to do it?
If a landlord sends a notice of termination of 112 days to a tenant before the 4 years expire with termination date on the 4 years expiry date, the RTB will say that the notice is invalid because it did not furnish a reason for terminating the tenancy in accordance with section 34 of the RTA 2004. The escape valve from this was section 42, the landlord waited until the expiry of the 4 years and provided termination without cause according to section 42. This has been taken away now.

GGTrek

Also forgot to say that the amendment of the law that states the rent for a new tenancy of the same dwelling cannot be above the old tenancy rent of the same dwelling (and they force the landlord to give a statement to the new tenant) is just political posturing and totally unenforceable and can be easily sidestepped for a new tenancy, since I said above, in a tenancy new charges can be legally applied which are much more than a mere 4% more than the old rent. As in every country where rent controls are introduced, new tenants will pay the massive collateral damage of rent controls, but clearly the government does not care about new tenants otherwise it would not meddle.

Paulw

Mod Note: There have been a number of posts here that are borderline illegal. Be very careful what you post/suggest or recommend. Any further posts about doing illegal activities or activites that breach the law/regulations will result in infractions.

newacc2015

myshirt wrote: »

Why all this talk about trying to 'game the system' and circumnavigate the spirit, ethos, and intention of the law?

Why?

How come I didn't hear landlords shouting loud for a more equitable system when all was in their favour?

Why game the system? Ethics anyone?

The intention of the law is to appease angry voters who feel the Government has done nothing to resolve the rental crisis, as the Government has done nothing to solve the rental crisis. Instead of actually solving the crisis by building housing. The Government has decided to ignore something nearly all economists agree on(which never happens) and has been proven for the last 60 years to be a complete failure and introduce rent controls.

Why would a rational landlord accept the law when is proven to be a complete and utter failure?

When has the system been in the landlords failure? Maybe in the 1840s, but it certainly hasnt been for the last 2 decades.

How can a landlord be ethical when every 2 years the Government completely changes the legalisation? The first priority of a landlord is paying their mortgage and their taxes. The collector general and your bank who will repo your property on two missed repayments dont care about ethics.

robp

noodler wrote: »

60% increases in rent nationally (higher in some urban areas) hasn't helped supply in the last 2 years so it is understandable that society and now the Government are unwilling to buy the argument that 4% increases off an already disgraceful base will reduce supply.

There is overwhelming academic evidence that rent controls reduce supply and quality of stock. There are not many issues the left and right agree on but this is one. The idea that somehow FG have this in control, and Ireland can be different is beyond absurd.

Lumen

robp wrote: »

There is overwhelming academic evidence that rent controls reduce supply and quality of stock.

Yes, but the govt and CBI are at the same time introducing measures to boost "demand" in the sense of freeing up credit for FTBers and providing tax relief for deposits on new builds. Rental and owner occupied stock are to some degree fungible.

I'm also not convinced that these controls, being temporary in nature and (AFAIK) not applying to new stock, will make very much difference. If I was getting into a 20 year leveraged investment, my prime concern would be the long term outlook for yields, and the biggest risk would be having to liquidate in the midst of another crash due to a supply overshoot coupled with spike in interest rates. A ceiling on rent increases wouldn't be a big disincentive.

newacc2015

Lumen wrote: »

I'm also not convinced that these controls, being temporary in nature and (AFAIK) not applying to new stock, will make very much difference. If I was getting into a 20 year leveraged investment, my prime concern would be the long term outlook for yields, and the biggest risk would be having to liquidate in the midst of another crash due to a supply overshoot coupled with spike in interest rates. A ceiling on rent increases wouldn't be a big disincentive.

Lets get real. They aren't going to be temporary. What Government is going to make the unpopular decision to remove them?

How are you supposed to look at the long term outlook in a leveraged investment when in the last 10 years, the Government cut your mortgage interest relief, introduced a ton of taxes and told you rents are capped? How are you supposed to look at a 20 year outlook when the rules completely change every 2 years?

How is a rents not a massive disincentive when any other investment like stocks have no caps on their returns?

IMO no rational investor will invest in property as you cant tell what the Government will do to your investment

Lumen

newacc2015 wrote: »

Lets get real. They aren't going to be temporary. What Government is going to make the unpopular decision to remove them?

Landlords are a powerful constituency. Maybe it doesn't feel that way to you.

newacc2015 wrote: »

How are you supposed to look at the long term outlook in a leveraged investment when in the last 10 years, the Government cut your mortgage interest relief, introduced a ton of taxes and told you rents are capped?

Mortgage interest relief is at 80% and rising. But you only note the cuts.

"A ton of taxes"? Which of these apply only to landlords?

Rents are not capped, the increases are capped.

Your glass is half empty.

robp

Lumen wrote: »

Yes, but the govt and CBI are at the same time introducing measures to boost "demand" in the sense of freeing up credit for FTBers and providing tax relief for deposits on new builds. Rental and owner occupied stock are to some degree fungible.

I'm also not convinced that these controls, being temporary in nature and (AFAIK) not applying to new stock, will make very much difference. If I was getting into a 20 year leveraged investment, my prime concern would be the long term outlook for yields, and the biggest risk would be having to liquidate in the midst of another crash due to a supply overshoot coupled with spike in interest rates. A ceiling on rent increases wouldn't be a big disincentive.

Even if these measures don't have a huge negative effect they will at least have a minor negative effect which is awful in a time of a rental crisis. I know people who charge significantly below market rates. Already I have heard them drop plans to buy new furniture for their in response to the fact that they cant even creep towards market rates b new legislation.

Paul Krugman said in 2000.

Sky-high rents on uncontrolled apartments, because desperate renters have nowhere to go -- and the absence of new apartment construction, despite those high rents, because landlords fear that controls will be extended? Predictable. Bitter relations between tenants and landlords, with an arms race between ever-more ingenious strategies to force tenants out -

http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html
People often try cite Germany as a rent controls success story, but most parts of Germany use a very lite version of rent controls as they refer to an index not previous rent. Where housing is cheap there has decades of economic stagnation due to communist while in the west rents are high and comparable to Ireland.

newacc2015

Lumen wrote: »

Landlords are a powerful constituency. Maybe it doesn't feel that way to you.

I don't think it feels that way for the hundreds of thousands of landlords in this country who can't evict non paying tenants, have to deal with the Government changing regs every 2 years etc. Landlords might be a powerful constituent, but the Government's views tenants as of greater importance. Such as structuring all tenancy reforms for the last 13/14 years all in favour of the tenant.

Lumen wrote: »

Mortgage interest relief is at 80% and rising. But you only note the cuts.

As an investor looking at the long term, I would see that there is no certainty in mortgage interest relief. When the Government was strapped for cash, they capped it. How could I be certain that in the next recession or even in 12 months that the Governments wouldn't cut it to 40%. They have shown in the past nothing is off limits.

Lumen wrote: »

Rents are not capped, the increases are capped.

We dont know. There is talk that the new amendment means that if a tenant moves out, the new tenant moves in on the same rent

Lumen wrote: »

Your glass is half empty.

The glass is empty for the thousands of landlords who are selling up each year. Sherry Fitz state that about 45% of the properties they are selling are BTL and only 20% of purchases are BTL. With stats like that, I dont see how anyone can see the glass as anything but half empty.

You haven't quite explained how a long term investor investing for 20 years should feel reassured about the fact the Government changes taxation and other rules nearly every 2 years. Would you invest €75,000 and leverage another €225,000 in something where you can't even tell what the Government policy will be in 6 months? There is no other industry where the Government caps their interest relief. There is no other industry where the Government constantly changes their taxation rules and regulations every 2 years. Yet you seem to think I am only one pessimistic about the industry?

The reality is a lot of landlords are going to sell up with these amendments. Between caps on rents and ad hoc tax policy. Most people can go onto Degiro or any online stock broker,where they can invest in a tax efficient Irish REIT or an index fund where they can 10% pa over the long term with no fears of the Government massively changing the taxation every 2 years.

Pkiernan

Its very easy now to get regular, repeatable 7% returns in the Stock Markets, which will only attract 33% CGT.

Not sure why I am tying up a €200K asset to get a 2.5% return....

Government has moved against landlords and property rights, because they wont increase supply (the only real solution).

This will have the effect of driving the small investor out (who is paying 51% tax on rental income) and rewarding international REIT funds who pay virtually nothing in tax.
Rents are not going down because of this. The left wing idiots will understand this in a few years.

Carawaystick

Pkiernan wrote: »

Crazy that it doesn't occur to the government to maybe incentivise rent reductions through corresponding landlord income tax reduction.

I'm not sure why If I go out and do an honest weeks hard work I should pay a higher rate of income tax than a fella who bought a house and has to decide on tenants every other year, buy insurance and fill in a form or 3 each year....

Carawaystick

Carawaystick wrote: »

I'm not sure why If I go out and do an honest weeks hard work I should pay a higher rate of income tax than a fella who bought a house and has to decide on tenants every other year, buy insurance and fill in a form or 3 each year....

Becuse he is taking a risk and providing a vital service.

rossmores

So now my two vacant units which where let previously at a large market discounts to good tenants can only be re-let at the same rent with the higher risk because of changes to tenant rights and tenure will have remain vacant or do short term letting, however if there is a new owner the rent restrictions wont apply so I have just been mugged by the government.
This will take a lot of existing stock out of the market at a faster rate

Clampdown

Mmmm yes, quite right you are, I too am making up all kinds of fees. Charges apply should a tenant text, make eye contact, or pay rent without a deep bow or curtsy. That will teach them to seek reform through their elected government!

handlemaster

Carawaystick wrote: »

I'm not sure why If I go out and do an honest weeks hard work I should pay a higher rate of income tax than a fella who bought a house and has to decide on tenants every other year, buy insurance and fill in a form or 3 each year....

Landlords did that to, where do you think they get the money to pay for the deposits for a property to get a mortgage. Implying that someone who invest s there savings in an investment property as not having worked for it is misleading and dishonest.

76544567

handlemaster wrote: »

Landlords did that to, where do you think they get the money to pay for the deposits for a property to get a mortgage. Implying that someone who invest s there savings in an investment property as not having worked for it is misleading and dishonest.

Tenants and indeed our government, seem to think that there is no work involved in property investment.
They all seem to think that a property investor should buy and put the work in but that they should not get the benefit of their investment and work.

murphaph

Clampdown wrote: »

Mmmm yes, quite right you are, I too am making up all kinds of fees. Charges apply should a tenant text, make eye contact, or pay rent without a deep bow or curtsy. That will teach them to seek reform through their elected government!

Reform is fine. All the reform for the last 20 years has been in favour of tenants. Nothing meaningful there to help landlords at all.

A 4% cap (which is all that's making headlines) for sitting tenants would have been fine with me. That they overnight forced landlords who have been generous to their existing to be generous to all future tenants is what sticks in my craw.

rossmores

I would think twice before investing in reits who are exposed to residential property even though they have a subsidised tax advantage over private LL.
Anyone who thinks property owners should be cannon fodder to those who rent by knee jerk reaction of a irresponsible piece of legislation wont effect them in the long run enjoy the ride while you can
I will not invest anymore in this market or upgrade any of my remaining investments and will remain vacant as tenants vacate.

76544567

Over the last few days we have decided what we are going to do now.
We will be selling the rented 3 bed house in Dublin and buying an apartment in Spain. Notice will be served next week.

We will Airbnb or similar that new property in Spain via an agent in Spain during the summer and high season months and use it for ourselves and family at other times. We will use it for swap times too so that we can get free holidays throughout Europe from it too.

We will sell an apartment and invest in ETFs. No Reits, for reason someone else outlined above.

And the other apartment we will keep rented for another couple of months to see if the IPOA challenge this and where it is going. If nothing changes, then that will be Airbnbd for enough of the year to pay for its running. Once costs and a little profit are made it will remain empty for the rest of the year. Under no circumstances, unless changes happen with this new legislation will it be used for long term lets again.

Paulw

murphaph wrote: »

A 4% cap (which is all that's making headlines) for sitting tenants would have been fine with me. That they overnight forced landlords who have been generous to their existing to be generous to all future tenants is what sticks in my craw.

I can't see that last bit anywhere in the published wording. All I can see is that the new rent can't be greater than 4% of the rate index. So, to me, if you were renting below market rate, you can still increase the rate to market rate plus a maximum of 4%.

If someone has wording that says otherwise, I'd be curious.

So, those generous landlords are not stuck.

76544567

Paulw wrote: »

I can't see that last bit anywhere in the published wording. All I can see is that the new rent can't be greater than 4% of the rate index. So, to me, if you were renting below market rate, you can still increase the rate to market rate plus a maximum of 4%.

If someone has wording that says otherwise, I'd be curious.

So, those generous landlords are not stuck.

If that was the case then LLs would be happy.
Especially the ones charging below market rate (which by definition does not exist anymore with the new rules).

Now your rent will be made up of rent + tenant paid charges. And because there is no market rate, these could add up to anything.

Everyone's a loser on this one. Even Coveny, when people realise what he has done.

Graham

Paulw wrote: »

......you can still increase the rate to market rate plus a maximum of 4%.

Nope, 4% of the 'rent last set'.

I'd be interested in seeing anything to the contrary,

Paulw wrote: »

So, those generous landlords are not stuck.

Looks like they are

Formula and Examples
Where a landlord is setting the rent in a Rent Pressure Zone the amount can not be greater than the amount determined by the below formula:
R x (1 + 0.04 x t/m)

• R = The amount of rent last set under a tenancy for the dwelling (the current rent amount)
• t = The number of months between the date the current rent came in to effect and the date the new rent amount will come in to effect.
• m = the number of months since your last rent review – you must enter 24 OR 12
• For tenancies that are already in existence a review is only permitted 24 months after the tenancy came in to existence or 24 months from the date the rent was last set.
• Once this first rent review has taken place, all reviews thereafter are permitted every 12 months. For subsequent rent reviews in relation to the property the permissible rent increase will be 4% per annum applied pro rata for the period since the rent was last increased.

Source: RTB