Where do I stand concerning new rental laws

beaufoy

I have a one bedroom apartment in Mountjoy Square which has been rented out at 825 pcm for the last two years. Last week I gave the Tenants informal notice that I would be increasing the rent. I noticed an exact apartment on the exact floor as mine had been rented @ 1400 euro pcm, so I sent the Tenants evidence of said rental and informed them i would require in the region of 1200 euro to be paid for the next two years. However, after giving notice (which they have ignored) I discovered that I am probably only allowed to increase the rent to 860 euro ie 4% increase......can anyone give me more info as to where i stand

cronos

beaufoy wrote: »

I have a one bedroom apartment in Mountjoy Square which has been rented out at 825 pcm for the last two years. Last week I gave the Tenants informal notice that I would be increasing the rent. I noticed an exact apartment on the exact floor as mine had been rented @ 1400 euro pcm, so I sent the Tenants evidence of said rental and informed them i would require in the region of 1200 euro to be paid for the next two years. However, after giving notice (which they have ignored) I discovered that I am probably only allowed to increase the rent to 860 euro ie 4% increase......can anyone give me more info as to where i stand

You can only raise by 4% I'm afraid.

http://www.rtb.ie/docs/default-source/legislative-changes/rent-predictability-faqs.pdf?sfvrsn=2

You can raise it 4% each year through, rather than every 2 years.

handlemaster

beaufoy wrote: »

I have a one bedroom apartment in Mountjoy Square which has been rented out at 825 pcm for the last two years. Last week I gave the Tenants informal notice that I would be increasing the rent. I noticed an exact apartment on the exact floor as mine had been rented @ 1400 euro pcm, so I sent the Tenants evidence of said rental and informed them i would require in the region of 1200 euro to be paid for the next two years. However, after giving notice (which they have ignored) I discovered that I am probably only allowed to increase the rent to 860 euro ie 4% increase......can anyone give me more info as to where i stand

I said this before you will get no thanks for keeping rent low for tenants, neither from them or the tax payer in general. You have been screwed by the government. If this scheme they have implemented ever goes learn from it Max market rent 100% of the time.

Fian

cronos wrote: »

You can only raise by 4% I'm afraid.

http://www.rtb.ie/docs/default-source/legislative-changes/rent-predictability-faqs.pdf?sfvrsn=2

You can raise it 4% each year through, rather than every 2 years.

The first raise can be 2% per annum since the last rent increase, thereafter 4% per annum, annually.

beaufoy

would it be possible to give the present tenants notice on the grounds of refurbishment needed. Then refurbish to a lot higher standard, and offer it to the present tenants at the going rate for an upmarket residence. Then when they reject the offer rent it via AIRBNB

myshirt

beaufoy wrote: »

would it be possible to give the present tenants notice on the grounds of refurbishment needed. Then refurbish to a lot higher standard, and offer it to the present tenants at the going rate for an upmarket residence. Then when they reject the offer rent it via AIRBNB

Yes, put your thinking cap on. No way do you want to break the law here, but that rent is really too low, you do need to address it.

Paulw

beaufoy wrote: »

would it be possible to give the present tenants notice on the grounds of refurbishment needed. Then refurbish to a lot higher standard, and offer it to the present tenants at the going rate for an upmarket residence. Then when they reject the offer rent it via AIRBNB

No, because the new law says that the new rent rate can only be 4% more than the previous rent, if the premises was rented out within the last 2 years.

Also, it is now unclear if you can even serve notice to the tenants on the grounds of refurbishment, for Part IV tenants. It has become very complex.

You would need to check the legislation carefully and maybe even consult a solicitor.

beauf

They've managed to create a rule that rewards LL who pushed rents up as high as possible, and at the same time penalizes LL who kept it low, and these LL will now have to raise rents.

The only other option is to sell, and the property will likely leave the rental market.

daithi7

beauf wrote: »

They've managed to create a rule that rewards LL who pushed rents up as high as possible, and at the same time penalizes LL who kept it low, and these LL will now have to raise rents.

The only other option is to sell, and the property will likely leave the rental market.

Yup, and that my friends is how government fup up rental markets when they try to intervene in them instead of addressing supply which is the issue.

The_Conductor

beaufoy wrote: »

would it be possible to give the present tenants notice on the grounds of refurbishment needed. Then refurbish to a lot higher standard, and offer it to the present tenants at the going rate for an upmarket residence. Then when they reject the offer rent it via AIRBNB

If the unit genuinely requires 'major renovations' (which while its not defined- its a reasonable assumption does not include a 'refurbishment')- you are entitled to relet it at the open market rate- after the renovations.

If you relet it to the current tenants- they will most probably claim it was a ruse to get over the 4% pressure zone rule- and to be honest with you- I'd be quite surprised if they didn't win were it to go to tribunal.

As for using the unit for Airbnb- there is a high likelihood that it would be counter to your lease on the apartment on the one hand- and on the other hand- as was determined by the Temple Bar case- there is a high risk you may be in trouble over planning violations. Seriously- whatever you're doing- Airbnb has far more risk associated with it than ever before- its not worth the hassle.

If I were in your position- quite honestly- I'd either limit the rent increase to the 4% rule- or sell- and I'd be strongly tempted to sell, the regulatory environment is toxic for small scale landlords.

Ocean Blue

The_Conductor wrote: »

If the unit genuinely requires 'major renovations' (which while its not defined- its a reasonable assumption does not include a 'refurbishment')- you are entitled to relet it at the open market rate- after the renovations.

If you relet it to the current tenants- they will most probably claim it was a ruse to get over the 4% pressure zone rule- and to be honest with you- I'd be quite surprised if they didn't win were it to go to tribunal.

As for using the unit for Airbnb- there is a high likelihood that it would be counter to your lease on the apartment on the one hand- and on the other hand- as was determined by the Temple Bar case- there is a high risk you may be in trouble over planning violations. Seriously- whatever you're doing- Airbnb has far more risk associated with it than ever before- its not worth the hassle.

If I were in your position- quite honestly- I'd either limit the rent increase to the 4% rule- or sell- and I'd be strongly tempted to sell, the regulatory environment is toxic for small scale landlords.

From rtb.ie

Q16. How “substantially refurbished” does a property need to be to qualify for an
exemption?

A ‘substantial refurbishment’ must be a significant change to the dwelling resulting in increased
market value of the tenancy. Therefore this would involve significant alterations or improvements
which add to the letting value of the property - usually involving major building works or works
requiring planning permission. For example, simple repainting or replacement of white goods would
not be sufficient.

Paulw

The_Conductor wrote: »

If the unit genuinely requires 'major renovations' (which while its not defined- its a reasonable assumption does not include a 'refurbishment')- you are entitled to relet it at the open market rate- after the renovations.

Just wondering where this is written?

Ocean Blue

Paulw wrote: »

Just wondering where this is written?

There is a link to FAQs about two thirds down the page

http://www.rtb.ie/dispute-resolution/dispute-resolution/rent-pressure-zones

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Fian

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It was exactly 50% of the rent I think you will find.

That was 50% of a rent that was more than 40% below market rent, bringing the rent up to 85% of the market rent, which was still a decent discount for these fortunate tenants.

Now the Landlord faces a cap of 850, which is 40% below market rent.

Fair to the tenant is one thing, being stuck with a 40% discount to the income he would be able to get for the housing in the market, because he didn't push up prices when he was entitled to is hardly fair on the landlord.

The tenants are getting a huge windfall at the expense of their landlord and will be able to stay in accomodation at way below market rent, the Landlord is getting shafted.

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conf101

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They're not doing landlords any favours, I agree, but they're certainly doing (a lot of) tenants favours. I moved last October to a place I really like where the rent is pretty steep (though not over market rate). I have security here now knowing that my rent can't take a massive hike all of a sudden. That's a significant help in allowing me and my wife plan for the future

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The_Conductor

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And new prospective landlords will in the main be interested solely in new property- that is not subject to rent-controls- which means additional competition for FTBs for new properties- and the FTB grant doesn't count towards secondhand properties..........

Law of unintended consequences?

76544567

The_Conductor wrote: »

And new prospective landlords will in the main be interested solely in new property- that is not subject to rent-controls- which means additional competition for FTBs for new properties- and the FTB grant doesn't count towards secondhand properties..........

Law of unintended consequences?

I think anyone thinking of investing will always have at the back of their mind that even if they went for a new property the legs might be cut from under them too in the not too distant future. So they might just stay out of the market now.

Fian

Fian wrote: »

The tenants are getting a huge windfall at the expense of their landlord and will be able to stay in accomodation at way below market rent, the Landlord is getting shafted.

To put it into perspective, if a parent was renting an apartment to their child or other relation at such a discount there would be a case for capital accusations tax being applied as the discount could well be seen as a gift. Even the 3k yearly exemption even would only cover half of it.

Maglight

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And the lower rent will probably translate into a lower sales price because investor buyers will calculate the potential rental yield when assessing the value of the property. Doubled dammed for being a decent LL and trying to keep rents down for tenants.

Robineen

George Fit Mafia wrote: »

To put it into perspective, if a parent was renting an apartment to their child or other relation at such a discount there would be a case for capital accusations tax being applied as the discount could well be seen as a gift. Even the 3k yearly exemption even would only cover half of it.

Considering that parents can gift their child a total of 6K tax free a year, that's a stretch.

Robineen

Robineen wrote: »

Considering that parents can gift their child a total of 6K tax free a year, that's a stretch.

Yes they can (if its both parents and not just one), though the rent difference in the ops case is 6600 so its even over that. The exact numbers was not really the point though, its more that the tenants are receiving a massive gift from the LL every year due to stupid and badly thought out legislation. That 6600 (or 3300 at worst after tax) should be going into the LL pocket as a reqard for taking the risk and investing.

Yes many LLs were foolish enough to be renting below market rate, I've been saying it for a long time that LLs should get the most possible rent they can at all times and none of this letting tenants off with discounts but its still not fair to trap them on rents way below market rate. The days of discounts are also over.

Robineen

George Fit Mafia wrote: »

The days of discounts are also over.

For now. When a tenant's market rolls around again, there will again be room for rent negotiation.

conf101

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That's true. I'm not arguing that the new regulations help everyone, nor am I saying that there are no downsides to them. But to say that they don't do anyone any favours is wrong. There are a lot of young couples/families trying to save for mortgages that these rent controls provide great security to and make it slightly easier to save. Whether that outweighs the negatives is another discussion, but they certainly are helping people.

Also, the 4% increase applies to a new or existing tenant. So evicting a current tenant isn't a legitimate way to increase the rent by more than that. Not to say that some LLs won't try that, but it's not quite so straightforward.

The_Conductor wrote: »

And new prospective landlords will in the main be interested solely in new property- that is not subject to rent-controls- which means additional competition for FTBs for new properties- and the FTB grant doesn't count towards secondhand properties..........

Law of unintended consequences?

Why would new landlords prefer new property to second-hand property?

quadrifoglio verde

conf101 wrote: »

That's true. I'm not arguing that the new regulations help everyone, nor am I saying that there are no downsides to them. But to say that they don't do anyone any favours is wrong. There are a lot of young couples/families trying to save for mortgages that these rent controls provide great security to and make it slightly easier to save. Whether that outweighs the negatives is another discussion, but they certainly are helping people.

Also, the 4% increase applies to a new or existing tenant. So evicting a current tenant isn't a legitimate way to increase the rent by more than that. Not to say that some LLs won't try that, but it's not quite so straightforward.



Why would new landlords prefer new property to second-hand property?

Well second hand rented property.
A second hand ppr wouldn't make much difference as the rules wouldn't apply.

Robineen

Robineen wrote: »

For now. When a tenant's market rolls around again, there will again be room for rent negotiation.

Them days are a long way away at the moment. When they do come it's the market rate that will fall though as opposed to discounts being offered on market rate.