Media: 3 Tenants awarded compensation after their landlord refuses to engage in HAP

Michael D Not Higgins

Lux23 wrote: »

But why did the landlord refuse to participate in the scheme? They weren't going to lose any money? I don't really understand why you find the decision so perplexing?

HAP minimum standards are higher than the usual minimum standards as the inspection team's interpretation of the published minimum standards is a much higher bar.

The_Conductor

Lux23 wrote: »

But why did the landlord refuse to participate in the scheme? They weren't going to lose any money? I don't really understand why you find the decision so perplexing?

For starters- what happens if/when the dwelling undergoes a HAP inspection?
It can fail for any of a long and bewildering list of reasons- some of which cost tens of thousands of Euro to rectify- and most of which are wholly irrelevant for renting in the private sector.

Or- what happens if the tenant neglects to pay their share of the rent to the local authority- and the landlord gets cut off altogether.

If a tenant doesn't pay their portion of the rent- the landlord gets nothing whatsoever- its not just the tenants portion that gets stopped.

Or- have you tried to contact a local authority to enquire about HAP lately? I've 17 names of people who have promised me a call back from 2 Dublin local authorities and Galway- none have done so......... Even if they did- they wouldn't discuss a tenant's situation with me (if I had a tenant who had stopped paying their portion of HAP)- on data protection grounds. I.e. all of the risk is put on the landlord- and none on the local authority.

Its a wonderful scheme for local authorities- as they don't have to accept responsibility- well, for anything at all- its an entitlement for the tenant- akin to any other- but for the landlord- they are the one left holding the saucepan.

Askthe EA

Lux23 wrote: »

But why did the landlord refuse to participate in the scheme? They weren't going to lose any money? I don't really understand why you find the decision so perplexing?

Because, firstly, it allows for retrospective changing of the terms of a contract without the consent of one of the parties? That in itself is mad.

There are significant costs incurred to bring a property to HAP standards, costs which cannot be claimed back against Tax.

Askthe EA

rawn wrote: »

Same! It seems straightforward. Some posters have brought up some excellent points about the difficulties of bringing a building up to HAP standards but that's not what was stopping this part LL. His defense was he didn't think he had to accept it for existing tenants. I'm sure many people advised him of the law during the process but he dug his heels in and is now - rightly - paying the price.

How do you know thats whats not stopping him? Maybe he didnt want to accept HAP due to the extra costs he knew would come.

Lux23

But he didn't use any of that in his defence, he simply said he didn't want to do it. Sounds like he/she was very foolish not to at least consider it. If he failed the HAP inspection for instance surely that could have been a reason to refuse? I think you're all getting your knickers in a twist about something that seems fairly straightforward to me. You can't refuse RA tenants and you can't refuse HAP either - that has been the law for a while now. This confirms it and rightly so.

The_Conductor

rawn wrote: »

Same! It seems straightforward. Some posters have brought up some excellent points about the difficulties of bringing a building up to HAP standards but that's not what was stopping this part LL. His defense was he didn't think he had to accept it for existing tenants. I'm sure many people advised him of the law during the process but he dug his heels in and is now - rightly - paying the price.

What happens if/when he/she pleads penury and is forced to sell the property?
The tenants get nada- and are turfed out, the landlord has the property repossessed- and its then flogged to whoever the lender can get to buy it.

Its a bit of a can't win situation- but the icing on the cake is the level of the fines being imposed on the landlord- he/she is being treated as a business by the LRC- rather than as a private individual- whereas Revenue etc- treat them as a private individual and rental income as unearned income taxed at their marginal rate (akin to share dividends etc).

I.e. one organ of state is treating the landlord as a business- the other as a milk cow- you can't have it both ways- its either one or the other- it places any landlord with 1-2 properties in an incredibly dangerous position- and landlords with 1-2 properties account for 63% of all properties registered with the RTB.

Its a mess- compounded by the level of fines levied on the landlord.

Michael D Not Higgins

Lux23 wrote: »

But he didn't use any of that in his defence, he simply said he didn't want to do it. Sounds like he/she was very foolish not to at least consider it. If he failed the HAP inspection for instance surely that could have been a reason to refuse? I think you're all getting your knickers in a twist about something that seems fairly straightforward to me. You can't refuse RA tenants and you can't refuse HAP either - that has been the law for a while now. This confirms it and rightly so.

I take your point, and it's certainly reflected in the WRC's ruling which states the landlord's case of just testing the legislation makes the case of discrimination more serious. He may have even been able to mitigate some of the damages if these other points were brought forward.

The_Conductor

Lux23 wrote: »

But he didn't use any of that in his defence, he simply said he didn't want to do it. Sounds like he/she was very foolish not to at least consider it. If he failed the HAP inspection for instance surely that could have been a reason to refuse? I think you're all getting your knickers in a twist about something that seems fairly straightforward to me. You can't refuse RA tenants and you can't refuse HAP either - that has been the law for a while now. This confirms it and rightly so.

You can't refuse them- but what happens if/when a pre-existing tenant goes on HAP- and the property is inspected and fails? The landlord is then discriminating against the HAP tenant- if he/she doesn't bring it up to HAP standards- which are significantly above those a private sector tenant is entitled to. This has been confirmed by Revenue- who say an upgrade to HAP standards- is an upgrade of a property- and thus is ineligible as a cost against rental income, as the landlord can use the upgrade to attain a higher rent. However if the landlord does this- they'll be up before the RTB at tribunal on any of a number of different grounds (including, but not limited to, RPZ grounds).

I.e. you have different organs of state prescribing different things to landlords- without any cognisance of what other rules are being imposed on landlords by other bodies- and the landlords have to obey absolutely everything.

Honestly- the best course of action for any landlord with 1-2 properties- is to sell them ASAP.

AlmightyCushion

The_Conductor wrote: »

What happens if/when he/she pleads penury and is forced to sell the property?
The tenants get nada- and are turfed out, the landlord has the property repossessed- and its then flogged to whoever the lender can get to buy it.

Its a bit of a can't win situation- but the icing on the cake is the level of the fines being imposed on the landlord- he/she is being treated as a business by the LRC- rather than as a private individual- whereas Revenue etc- treat them as a private individual and rental income as unearned income taxed at their marginal rate (akin to share dividends etc).

I.e. one organ of state is treating the landlord as a business- the other as a milk cow- you can't have it both ways- its either one or the other- it places any landlord with 1-2 properties in an incredibly dangerous position- and landlords with 1-2 properties account for 63% of all properties registered with the RTB.

Its a mess- compounded by the level of fines levied on the landlord.

How does revenue not treat the landlord as business? Surely, landlords get treated the same as any one else who is self employed?

jamesthepeach

quietsailor wrote: »

Here's a chilling extract from the section "Summary of Complinant's Case"

"The HAP Shared Services Centre administers the collection and payment of rental payments. Landlords undertaking the HAP Scheme are obliged to meet certain requirements which include registration of the property with the Residential Tenancies Board, certifying ownership of the property, provision of a valid Tax Clearance Certificate confirming tax compliance, and the property in question meeting certain minimum standards for rental accommodation under the requisite Regulations and being subject to a local authority inspection. Non-compliance by either of the Parties in relation to their respective obligations can lead to payments under the HAP Scheme being suspended or stopped".

This reads to me that the Landlord HAS to accept a HAP tenant - whether they want to or not and if the rental (house/apartment) isn't up to the HAP standard the LL can have their payment suspended.

Am I reading that correctly? - surely they can't do this - force you to take on a tenant under a scheme you never signed up to and then threaten to cut off your payments unless you make alterations - which, from reading a post above, isn't tax deductable, so you may not have the money to renovate

Probably like every other part of the recent legislation it would not stand up if challenged. Finding a big enough bankroll to challenge it all is the problem. Many people offered to pay the ipoa to challenge the legislation but they ran with their tail between their legs.

Eric Cartman

a disgrace. Landlords should be allowed to turn down HAP.

The_Conductor

AlmightyCushion wrote: »

How does revenue not treat the landlord as business? Surely, landlords get treated the same as any one else who is self employed?

All rental income is treated as 'unearned income' and subject to USC etc- not the net. A landlord cannot take cognisance of any work or materials that he/she uses in the course of running their letting- only if it is outsourced to a third party. No reasonable costs incurred in running the tenancy- travel expenses etc- it is expected that a landlord will do everything 'on their own time'. Only major allowable cost is 75% mortgage interest- however, if a landlord prudently pays down their debts- or inherits the family home and doesn't have any debt on it- they have no large cost to offset against their taxable income.

In theory- if a self employed person lets a property and doesn't have a mortgage associated with it- they can end up paying 54.5% in taxes and charges on the gross rental income. Show me a self employed person- in any other sector- who pays a marginal rate of tax of 54.5%.

Also- what the hell is the story with PRSI and USC on gross (and not net) rental income. Is the landlord going to get reimbursed if the property is vacant? Whats the reasoning? It just doesn't add up.

Also- unlike running any other business- regulatory taxes and charges are not deductible- so property tax, RTB fees etc- are *not* deductible (if you have a managing agent- his/her fees are- management charges in a serviced complex are, any costs associated with the day-to-day running of the property- are.

If you upgrade the property (for example- putting double or triple glazed windows in)- to make it more comfortable for tenants- as its an 'improvement' rather than a repair- it is *not* deductible...........

I could go on and on.......... Letting a property- is nowhere near running a business as a self-employed person- in fact, the taxation associated with letting a property in Ireland- is nothing short of a travesty for a small scale landlord- esp. if they've inherited a property, or paid back some of the mortgage. On the other side of the coin- we have the REITs and large scale landlords- who have set themselves up as charities- so they don't pay any tax- as in, any- at all........... Something doesn't give.

According to the Revenue Commissioners 96% of all tax paid on rental income in 2016- was by landlords who had 1 or 2 properties. Yet- 37% of all properties are let by landlords with more than 2 properties (according to the RTB). Go figure...........

jimmycrackcorm

Eric Cartman wrote:

a disgrace. Landlords should be allowed to turn down HAP.

No they shouldn't be allowed to discriminate. However they shouldn't be forced to have to upgrade their properties to meet the HAP inspection requirements.

I too am curious what happens if in this particular case what would happen if this was so.

Either way the landlord lost for the renting equivalent of an employment constructive dismissal.

I think that landlords well now start saying they will accept HAP subject to inspection in advance, and tenants well find that the properties won't pass.

The_Conductor

If a landlord agrees to take a HAP tenant- and the property fails the HAP inspection- the landlord's payment is stopped immediately- as he/she is deemed to be in breach of their contractual obligations to the local authority under the scheme- wholly regardless of whether, or not, the property complies with all standards as laid out in the Residential Tenancies Act (as amended)- or whether or not the tenant continues to pay the local authority their share of the rent........

I.e. you can have a perfectly acceptable tenant, continue to pay their share of the rent, in a property fully compliant with the RTA, and the LA stop the rent.

For good measure- the local authority will not enter into correspondence with the landlord if a HAP payment is stopped, on data protection grounds...........

Honestly- the only sane thing to do- is specify a fully refundable 3 months rent upfront as a deposit from a prospective tenant, any tenant on HAP or RAS- is accepted- on the basis of a local authority pre-inspection- and minimum 3 previous landlord references from all- alongside confirmation that the prospective tenant has not taken a case against the landlord to the RTB/PRTB........

You'd be nuts to take on a HAP/RAS tenant- without a LA pre-inspection- and you'd be nuts to take on any tenant- without 3 months deposit.

Ideally- rent unfurnished if at all possible.

This is turning into a completely nutty situation.

godtabh

Listening to Matt Copper headlines the lady from FLAC sounded very smug. Didnt like her attitude as it seemed to be a case of them versus us.

Eric Cartman

Eric Cartman wrote: »

a disgrace. Landlords should be allowed to turn down HAP.

Exactly a LL should be able to decide exactly who rents his property to and refuse anyone for any reason he wishes. Joke of a system that's dictating otherwise.

Eric Cartman

Alora Embarrassed Vapidity wrote: »

Exactly a LL should be able to decide exactly who rents his property to and refuse anyone for any reason he wishes. Joke of a system that's dictating otherwise.

I working with a few landlords who are converting every decent apartment they have in dublin into short let with airbnb, and their reasoning is all down to HAP, evictions taking too long and silly PRTB requests .

godtabh

Alora Embarrassed Vapidity wrote: »

Exactly a LL should be able to decide exactly who rents his property to and refuse anyone for any reason he wishes. Joke of a system that's dictating otherwise.

I agree they should be allowed to refuse but for the 9 grounds you cant discriminate against

• Gender
• Civil status
• Family status
• Sexual orientation
• Religion
• Age
• Disability
• Race (includes race, colour, nationality or ethnic or national origins)
• Membership of the travelling community.

but how is being a HAP tenant equate to being discriminated against for being gay?

It is not the private landlords job to provide accommodation. This is the case of the government passing the buck again.

The_Conductor

godtabh wrote: »

Listening to Matt Copper headlines the lady from FLAC sounded very smug. Didnt like her attitude as it seemed to be a case of them versus us.

Was there any explanation of how they came up with the 40k fine?
Seems completely and utterly over the top- and without any justification.
Also- was it clarified what the story with the landlord is- are they one of the 1-2 unit landlords (who make up 63% of the entire market)- or a large scale landlord?

The 40k- just sticks in the gullet- even if they were making a finding against the landlord- they could have given him/her a reasonable fine- 40k just seems so ridiculous- its the sort of fine that they're trying to bankrupt them- or worse........

40k fine- for a private individual- even if they were in the wrong- and I'd argue that the main issue here was the LL argued the wrong case- aka he/she tried to get it dismissed on a point of law- rather than attacking the system head-on to show it was totally ridiculous............

40k though? My god.

Wabbit Ears

So realistically the landlord here will just have to sell up and the tenants have to find new accommodation and will experience the reality of finding new rental accommodation which will simply being them reaping what they sowed.

godtabh

The_Conductor wrote: »

Was there any explanation of how they came up with the 40k fine?
Seems completely and utterly over the top- and without any justification.
Also- was it clarified what the story with the landlord is- are they one of the 1-2 unit landlords (who make up 63% of the entire market)- or a large scale landlord?

The 40k- just sticks in the gullet- even if they were making a finding against the landlord- they could have given him/her a reasonable fine- 40k just seems so ridiculous- its the sort of fine that they're trying to bankrupt them- or worse........

40k fine- for a private individual- even if they were in the wrong- and I'd argue that the main issue here was the LL argued the wrong case- aka he/she tried to get it dismissed on a point of law- rather than attacking the system head-on to show it was totally ridiculous............

40k though? My god.

It was just a snippet from her.

All the awards where different so I would think that they were 3 individual properties reading between the lines so wouldn't be sure if it was an indvidual or REIT involved.

If it was an individual it probably equates to a years rent per unit. Don't forget legal costs also

godtabh

Wabbit Ears wrote: »

So realistically the landlord here will just have to sell up and the tenants have to find new accommodation and will experience the reality of finding new rental accommodation which will simply being them reaping what they sowed.

What if he is in negative equity? Bankruptcy is more likely.

surrender monkey

godtabh wrote: »

What if he is in negative equity? Bankruptcy is more likely.

Sure this is Ireland! Everyone knows it's virtually impossible to get someone to pay up money they owe you! Getting the judgement is the easy part... actually getting the money is a whole different ball game all together.

davindub

The_Conductor wrote: »

Concur 100% with you.
Morally- it was, 100%, the right call- but legally- and the choice of words the FLAC person being interviewed chose highlights this- it is questionable........

This particular landlord is probably going to cut his losses and pay up- but the case has raised far more questions, than it has answered (including how/why the WRC had jurisdiction- rather than the RTB).

It was a breach of the equal status acts rather than RTB legislation, hence the WRC was used.

The_Conductor

godtabh wrote: »

What if he is in negative equity? Bankruptcy is more likely.

Its a small country.
The landlord in question is in Galway, they're not a REIT- they're a small scale landlord- and there is also a property management company involved- who didn't feature in the case. 40k is going to hurt them- but not bankrupt them, and I reckon that none of their properties are in negative equity.

Edit-

And there goes- the tenants haven't been quiet on social media either..........
Its fairly easy to conclusively identify one of them- the other two are probables...........

Its a small country guys- you really need to learn to keep quiet.........

The_Conductor

davindub wrote: »

It was a breach of the equal status acts rather than RTB legislation, hence the WRC was used.

Honestly- I think its a very dangerous and a very slippery slope.
I do not believe we should have multiple bodies adjudicating on tenancies- irrespective of whether, or not, its the core tenancy law that is the legislation infringed on. By all means have a WRC representative at the RTB for cases that feature equality issues- however, to adjudicate wholly in a different venue- is a bad bad idea.

If the RTB is not up to adjudicating these cases- they need to be strengthened- in which case they might hurry up with these and other cases- the common refrain from both tenants and landlords- features the glacial pace at which they move...............

I think this is a very bad idea- and is opening a Pandoras box- from which neither tenants nor landlords will emerge unscathed.

Mrs Shuttleworth

Eric Cartman wrote: »

I working with a few landlords who are converting every decent apartment they have in dublin into short let with airbnb, and their reasoning is all down to HAP, evictions taking too long and silly PRTB requests .

My tenant is moving out end September. I can only legally rent to €1053 whereas all other newly advertised units in complex are €1400. It's a toss up between AirBnB, revamp or rent a room. I'm not going to be the only chump in the village.

Edit: I'm leaning towards AirBnB / short corporate let.

Mrs Shuttleworth

The_Conductor wrote: »

Was there any explanation of how they came up with the 40k fine?
Seems completely and utterly over the top- and without any justification.
Also- was it clarified what the story with the landlord is- are they one of the 1-2 unit landlords (who make up 63% of the entire market)- or a large scale landlord?

The 40k- just sticks in the gullet- even if they were making a finding against the landlord- they could have given him/her a reasonable fine- 40k just seems so ridiculous- its the sort of fine that they're trying to bankrupt them- or worse........

40k fine- for a private individual- even if they were in the wrong- and I'd argue that the main issue here was the LL argued the wrong case- aka he/she tried to get it dismissed on a point of law- rather than attacking the system head-on to show it was totally ridiculous............

40k though? My god.

It seems that a landlord has to have a Tax Clearance Certificate to let under HAP. If he doesn't have the funds to discharge all liabilities or is in an arrangement with Revenue would he still be liable in damages to a tenant under today's ruling?

These "tenants" should be named. Today's ruling will have wide ranging ramifications in the form of spoof HAP applications to claim awards.

usernamegoes

Seems like the LL was a corporate LL by the way the adjudication is worded "When this complaint first came before me on 16th December 2016, the Respondent was not legally represented and two members of Management attended on its behalf. "

Really Interested

My understanding is each of the 3 tenants had been tenants for a while. Each entitled to HAP, landlord refused to engage. So tenants still paid LL but not able to get money from state. If LL engaged then the payment direct to LL in the amounts the tenants had to pay so tenants at a loss because of action of LL.

The WRC had power to hear the matter the only real question was the new ground retrospective. The new ground is to discriminate based on entitlement to state payments.

Seemed a silly thing for LL to do to be honest. Now he has collected rent he could have collected from the state but now must pay back to tenants.