Terminating lease.

chanpan

I am an accidental Landlord, I was trying to sell my cottage in Clare for 5 years from 2009 to 2014 but the best offer i got was 30% of my mortgage, so instead i sunk some money into the house and rented it.

Now the tenants have been good so far, but when i told them today I was going to review the rent, (im looking at increasing it by 10 euros per week after the 90 day notice period but it will still be way under the market value, its a 2 bedroom house, sleeping a family of 4 and the current rent is 380 per month) I got bombarded with threatening texts and a list of unresolved issues with the house, which i was unaware of!

I am now thinking i should consider selling again, as even with the rent the house is a huge drain on my limited finances (it costs me double what i make every year!) but it doesnt sound like the tenant will go easily, and i felt sorry for them until the abuse today. I know I will need to give 8 weeks notice and at that point i need to put the house up for sale within 3 months, which i would do. However my question is what happens if the house doesnt sell again, am i then left in the position i cant try to rent the house again at a later stage without being taken to court?

Thanking you all for any advise...

davindub

The provision is not put the house up for sale within 3 months its intention to complete the sale within 3 months which if tested means you probably should have a reason to believe it will be sold, e.g. a buyer lined up, etc. So place it on the market now and gather interest.

If you cannot complete sale for any reason within 3 months, you can offer it back to the tenant. If they do not take up the offer, you can rent again. But cover yourself, some LL's think it's a matter of saying this or that and the courts will believe them or cannot disprove them, this is not the case. Follow the processes correctly and carefully, and give the tenant notice when you are certain a sale will proceed in the next 3 months.

Ms Doubtfire1

Well,

1) tenants are by law required to advise the LL on any issue arising with the house. if they don't, they may be held liable if the issue becomes a larger issue. I would not be intimidated by texts like that - but you are held to rectify the issues within a set amount of time if the issues are indeed the LL responsibility.

2) re Selling: have a look around at similar properties and their prices and the turnover
3) have you actually told the tenant you're only increasing by 40 a month?

davindub

davindub wrote: »

The provision is not put the house up for sale within 3 months its intention to complete the sale within 3 months which if tested means you probably should have a reason to believe it will be sold, e.g. a buyer lined up, etc. So place it on the market now and gather interest.

If you cannot complete sale for any reason within 3 months, you can offer it back to the tenant. If they do not take up the offer, you can rent again. But cover yourself, some LL's think it's a matter of saying this or that and the courts will believe them or cannot disprove them, this is not the case. Follow the processes correctly and carefully, and give the tenant notice when you are certain a sale will proceed in the next 3 months.

Intending to sell means just that intending to sell, there is no obligation to have buyers lined up or to offer it back if not sold within 3 months if the price you want is not being offered.

davindub

No, a high Court judge explained intention to sell as I described.

You need to have reason to believe you can complete the sale within the 3 months. The example given by the judge was a buyer in place as house sales can typically take time to close.

I still disagree, I can intended to sell and require the place vacant but fail to achieve the price I want within three months or 6 months or even longer. Hence why we have seen LL say they are Airbnbing their property while they try to achieve the price they want which may take quite a while.

Where is this challenge going to come from anyway, the former tenants will have found a new place and moved on so won't know how long it takes the former LL to sell.

athtrasna

Bristol Purple Rhinoceros wrote: »

I still disagree, I can intended to sell and require the place vacant but fail to achieve the price I want within three months or 6 months or even longer. Hence why we have seen LL say they are Airbnbing their property while they try to achieve the price they want which may take quite a while.

We have seen one on here, one swan doesn't make a summer. This is one of the riskier clauses for landlords, tenants could get decent payouts if landlords seek to abuse this.

4ensic15

davindub wrote: »

No, a high Court judge explained intention to sell as I described.

You need to have reason to believe you can complete the sale within the 3 months. The example given by the judge was a buyer in place as house sales can typically take time to close.

Hennessy v PRTB
"A notice of termination served by a landlord who intends to sell the premises the subject matter of a Part 4 tenancy must contain a statement of the grounds contained in the s.34, namely, that the landlord intends to enter into a binding contract for sale within three months of the termination of the tenancy and to enter into a enforceable agreement for the transfer for full consideration of his or her interest in the premises. Variations may arise if the landlord intends to sell a premises comprising an area greater than that the subject matter of the Part 4 tenancy but that factual situation did not arise in this case. The notice does not require to be expressed in the precise form of the statutory provisions, but the information cited must sufficiently identify that the intention is to conclude a contract for sale within three months."

davindub

A more descriptive part:

37. The reason must therefore be one of the six justifying reasons identified in the Table to s.34. In construing s.34, it cannot be ignored that the time frame of three months within which it is intended to sell is quite short, and in that context a landlord may terminate a tenancy on the grounds of an intended sale only if he has taken some preliminary steps to place a property on the market, as it would not always or perhaps usually be possible for an owner to predict that he or she would make an binding contract for sale within three months of placing the premises on the market. A landlord may not seek to recover possession of premises the subject matter of a Part 4 tenancy merely on account of a general intention on his part to sell the premises, and the intention must be to sell within three months and not merely, for example, to place the property on the market to test the market or to place the property on the market and wait a period of time until the appropriate price is achieved. The intention must be one to enter into a binding contract within three months of the termination of the tenancy, and that intention must exist before a notice of termination can validity be served. That in many cases will involve the requirement that the landlord has identified a potential purchaser, or commenced negotiations towards an eventual sale. Because of the short time frame of three months, it does not seem to me that the Oireachtas intended permitting termination of a Part 4 tenancy merely in anticipation of the commencement of the sale or advertising process. I would not go so far as to say that the intention was that a notice of termination could be served only in the context of an identified sale, but the legislation in my view envisages more that a mere intention to sell, and requires a landlord to have as a matter of fact, and to state, that he intends to bind himself to a sale within three months of termination.

davindub

Bristol Purple Rhinoceros wrote: »

I still disagree, I can intended to sell and require the place vacant but fail to achieve the price I want within three months or 6 months or even longer. Hence why we have seen LL say they are Airbnbing their property while they try to achieve the price they want which may take quite a while.

Where is this challenge going to come from anyway, the former tenants will have found a new place and moved on so won't know how long it takes the former LL to sell.

I'm not commenting on the practical application of the legislation, but the risk is that you could be penalised for not selling within 3 months. There has been commentary regarding offering the original tenants the property back if the sale does not take place.

But you can see why your description would be open to abuse and has been abused by certain LL's, but most tenants on to their credit just move on.

If you want here is the entire published judgement

http://www.bailii.org/cgi-bin/format.cgi?doc=/ie/cases/IEHC/2016/H174.html&query=(hennessy)+AND+(v)+AND+(prtb)