Landlords charging management fees to tenants to get around rent cap

Jobs OXO

Hi I heard from a few people that some LLs are doing this ? Is it allowed?

Gumbo

It's a fee associated with living in a managed estate. I'd say there's nothing wrong with getting the tenants to pay it but the LL has to make sure he/she doesn't offset it as an expense as the tenant is paying and not himself.

Samuel T. Cogley

I'd argue no one really knows. Certain parts of it like refuse charges are certainly fine, but upkeep of the property is on very dodgy ground IMHO.

Victor

Note that this can't be used to get around the maximum 4% rent increase.

It is more tax efficient for the landlord to pay it.

Jobs OXO

Victor wrote: »

Note that this can't be used to get around the maximum 4% rent increase.

It is more tax efficient for the landlord to pay it.

Well it seems that the landlord has now decided to pass on the charge for refuse in addition to the rent.

pwurple

I stripped everything I had included in one flat payment out when tenants changed over recently.

Bins & parking (which are part of property management), internet etc.

Had to be done. There's a rent cap of 4%, but there's no such cap on bins or parking.

Jobs OXO

pwurple wrote: »

I stripped everything I had included in one flat payment out when tenants changed over recently.

Bins & parking (which are part of property management), internet etc.

Had to be done. There's a rent cap of 4%, but there's no such cap on bins or parking.

That's another way I heard that LLs are doing it. Rent goes up 4% but parking space now charged separately

Samuel T. Cogley

Again AFAIK not tested yet. In principle there is no issue charging parking separately, there would be more of an issue if it was a sitting tenant, but a new tenant is simply not getting a benefit the previous one did.

Graham

Personally I would be wary.

It's not hard to conclude that stripping €1,000 of amenities previously included in the rent whilst leaving the rent at its previous level equates to a rent increase. As others have already stated, it's untested territory so the answer to this question is as yet unknown.

Jobs OXO

Graham wrote: »

Personally I would be wary.

It's not hard to conclude that stripping €1,000 of amenities previously included in the rent whilst leaving the rent at its previous level equates to a rent increase. As others have already stated, it's untested territory so the answer to this question is as yet unknown.

What about this situation. Current rent with space ( though space not referenced in lease - just verbally said could be used) is 1000

New rent 1040 and rent for space 160 total = 1200

Graham

Same applies, all anybody can do is guess how the RTB would view such an approach.

Personally I would expect the RTB to view it for what it is, an attempt to circumvent the RPZ rules. BUT I won't pretend to be able to second guess the RTB with any more accuracy than a magic 8 ball.

GGTrek

Victor wrote: »

Note that this can't be used to get around the maximum 4% rent increase.

It is more tax efficient for the landlord to pay it.

It makes no difference at all, completely neutral. Service charges are fully tax deductible. If landlord pays them he will then discount them as expenses in the tax return. If tenant pays them, then they will not appear at all.
Going back to the main issue that the OP and many renters do not understand is that you get no free lunches! Service charges and any variable cost that before was included in rent (parking, tv, internet, rubbish you name it) are not bound, rent is bound: govvie should have thought about this before the nonsense hard caps of the RTA 2016. The sense of entitlement of some people is just unbelievable! I never understood why in Ireland variable costs and taxes for local services used by the tenant are not passed over like it is done in many other countries (I can just name a few: Germany, UK, Brazil, Italy, in many civil law countries even small repairs are paid by tenants). The landlord could change the rent if these costs went up when rent was negotiable, now it is not possible anymore since rent is non-negotiable. Market will adapt to new stupid regulations and free lunches will disappear fast. The Irish rent customs were stuck to pre-2004 law which was strongly pro-landlord: 28 days notices with no reason were the norm, right of re-entry was possible, even the small one month deposit was due to the pro-landlord regulations that limited the risk. Now the government intrusion in the market has been so heavvy pro-tenant (like in many civil law countries) that the market is adapting around. Short of becoming a socialist country, these changes will be inevitable unless the Irish govvie backtracks (I doubt it).

davindub

Jobs OXO wrote: »

Hi I heard from a few people that some LLs are doing this ? Is it allowed?

If it's a new charge / increase its included in the 4%.

Samuel T. Cogley

On parking spaces I see it like this: There is a bear licence to use the space usually, that's all that's passed on to the tenant. That licence if not referenced in the lease is at least revocable between tenancies*, therefore a charge for it is fine. If it is referenced in the lease then I'd say it can't be stripped out, but that's poor drafting because what would have happened if the underlying licence was revoked for some reason, such as flooding etc.

*There are principles that would prevent it being revoked during a tenancy - estoppel springs to mind but could be wrong there.

Victor

pwurple wrote: »

Had to be done. There's a rent cap of 4%, but there's no such cap on bins or parking.

Has the price of parking and bins gone up by more than 4%?

Jobs OXO

Victor wrote: »

Has the price of parking and bins gone up by more than 4%?

Mgt fees defo increase by more than 4%

Lux23

A landlord tried to get my friends to pay management fees in 2006 so the legislation was relatively new at the time. They took a case and won but it took ten months and the landlord had asked them to move out when the lease was up anyway saying she wanted the place back. They got their deposit for the new property they rented as compensation. If I remember correctly they did offer to pay extra money for bins but the landlord was adamant that they had to pay the whole €3,000.

GGTrek

Victor wrote: »

pwurple wrote: »

Had to be done. There's a rent cap of 4%, but there's no such cap on bins or parking.

Has the price of parking and bins gone up by more than 4%?

For one property I have got garbage collection has gone up more than 20% last year.

emeldc

Just thinking out loud here. If a LL charges say €700 rent, €200 bins and €150 parking bringing the total to €1050, could that not be considered anti HAP tenant as the council will only pay a portion of the rent and not the other expenses. Is there any thing in that legislation that might make it illegal.

Wabbit Ears

I rent a property I own in Poland where this type of situation is just the way its done.

The property has an underground carpark space.

So the 'rent' is broken up into three sections in the contract.

The base rent
The flat rate Utilities that service the apartment (group hot water, management fees, Bins) and whats covered is listed
The rental of the carpark space

All utilities the tenant is responsible for are also listed in the contract, these would be any non-flat rate fees like electricity, gas and TV/Internet.

Its done this way as there are different tax requirements between the different areas. I can see this absolutly becoming the norm here as it makes things very transparent as to what youre paying for.

Lux23

How could you charge €200 a month for bins? Parking maybe, but not bins.

emeldc

Lux23 wrote: »

How could you charge €200 a month for bins? Parking maybe, but not bins.

Sorry, was thinking more of a yearly fee but you get the idea. Even if the monthly fees of bins, parking, management etc came to a couple of hundred euro that might be automatically outside a HAP tenants budget, thus excluding them.

Diemos

pwurple wrote: »

I stripped everything I had included in one flat payment out when tenants changed over recently.

Bins & parking (which are part of property management), internet etc.

Had to be done. There's a rent cap of 4%, but there's no such cap on bins or parking.

Sometimes, I'm surprised that LL's have greedy, money grabbing reputations...

Graham

Diemos wrote: »

Sometimes, I'm surprised that LL's have greedy, money grabbing reputations...

You are of course assuming that many landlords are doing this rather than just ranting about it.

emeldc

Diemos wrote: »

Sometimes, I'm surprised that LL's have greedy, money grabbing reputations...

Why would you be surprised when a LL who lets for the first time can charge as he sees fit whereas his next door neighbour might be charging hundreds of Euro less because of the 4% rent cap.

Diemos

Graham wrote: »

You are of course assuming that many landlords are doing this rather than just ranting about it.

I was referencing one landlord who said they had done this.

That it, "had to be done".

The crappy actions of a few can easily colour an entire group. Journalists are out for blood, what they see as big fat rich landlords feasting on the poor, blood. It won't be long until this practice, like the 2 month deposit, is being used to vilify landlords in the media.

In this case, they'd have a point. I can't see the reasons for this being anything other than a cash grab, a way to get around the 4% cap.

py

Diemos wrote: »

I was referencing one landlord who said they had done this.

That it, "had to be done".

The crappy actions of a few can easily colour an entire group. Journalists are out for blood, what they see as big fat rich landlords feasting on the poor, blood. It won't be long until this practice, like the 2 month deposit, is being used to vilify landlords in the media.

In this case, they'd have a point. I can't see the reasons for this being anything other than a cash grab, a way to get around the 4% cap.

You are assuming a lot of things. Perhaps, like some landlords, he/she had not put up the rent in many years and are subsequently stuck with low rent return because they had a good landlord/tenant dynamic prior to the new letting. Loyalty in business is nothing new but the new legislation is hurting landlords where they are forced to apply loyalty rates to new tenants where there is no business relationship.

Samuel T. Cogley

Diemos wrote: »

I was referencing one landlord who said they had done this.

That it, "had to be done".

The crappy actions of a few can easily colour an entire group. Journalists are out for blood, what they see as big fat rich landlords feasting on the poor, blood. It won't be long until this practice, like the 2 month deposit, is being used to vilify landlords in the media.

In this case, they'd have a point. I can't see the reasons for this being anything other than a cash grab, a way to get around the 4% cap.

Journalists don't see LL's that way simply as the vast majority are not. They do see people as easily manipulated sheep though, which on the whole, they are.

As for a cash grab, if the fees have increased more than 4% what are LL's meant to do? The government didn't, when they changed refuse charges, exempt anyone. The sooner this unconstitutional interference with property rights is dropped the better for everyone including tenants. Many tenants could see their rents halved overnight if the government was serious about sorting this; simply make rent tax deductible, and stop the double taxation of the same money.

Instead we have this stupid narrative that LL's must be greedy and the valiant government are there to protect people being forwarded by the media. Bollocks.

awec

Samuel T. Cogley wrote: »

Journalists don't see LL's that way simply as the vast majority are not. They do see people as easily manipulated sheep though, which on the whole, they are.

As for a cash grab, if the fees have increased more than 4% what are LL's meant to do? The government didn't, when they changed refuse charges, exempt anyone. The sooner this unconstitutional interference with property rights is dropped the better for everyone including tenants. Many tenants could see their rents halved overnight if the government was serious about sorting this; simply make rent tax deductible, and stop the double taxation of the same money.

Instead we have this stupid narrative that LL's must be greedy and the valiant government are there to protect people being forwarded by the media. Bollocks.

Yea, right. This is absolutely never going to happen. No landlord is going to pass on tax breaks to tenants so we can knock that one on the head right now I think. A little fanciful.

Samuel T. Cogley

awec wrote: »

Yea, right. This is absolutely never going to happen. No landlord is going to pass on tax breaks to tenants so we can knock that one on the head right now I think. A little fanciful.

The LL has nothing to do with it and this isn't the first time this has been explained (to you specifically IIRC) in this forum. The rental outgoing is simply deducible for the tenant, like it used to be (to what point I'm not sure). It was knocked on the head, let's unknock it. Given it was in place before it's hardly fanciful and would be a huge help in finding LL's who were not tax and RTB compliant.

awec

Samuel T. Cogley wrote: »

The LL has nothing to do with it and this isn't the first time this has been explained (to you specifically IIRC) in this forum. The rental outgoing is simply deducible for the tenant, like it used to be (to what point I'm not sure). It was knocked on the head, let's unknock it. Given it was in place before it's hardly fanciful and would be a huge help in finding LL's who were not tax and RTB compliant.

My bad, I completely misread your post.

You mean the rent relief scheme? Did it go as far as to half rent though? I think I claimed that before and I got back roughly 1 months worth of rent at the end.