RPZ: Substantial Change to a Property

Colonel Claptrap

My neighbour rented out his property to a family who have now been given a council house.
They were on the same low rent for 8 years. My neighbour was happy the place was rented, had moved abroad and was happy to receive the rent regularly from RAS. He didn't seek any rent increases.

Before they left, they thrashed the house. There has been considerable damage done to walls, Windows, floors, blinds, stairs and furniture. Some of the furniture has either been stolen or damaged and never replaced. The kitchen was never cleaned and is thick with grease. I doubt a professional cleaning company can salvage it.

The council are asking my neighbour to rent to another family but he is refusing to go down that route again. He wants to rent it privately but there is a considerable amount of work needed to get it up to standard. 10 grand at least.

He is worried that he is hamstrung by the RPZ rules and cannot increase the rent more than 4% past the 2009 rent rate of the old tenant. The property could easily fetch an additional €600 in the private rental market. In fairness to him, he's not greedy. He's just looking for a few bob to cover the 10k repair bill.

My question is: what constitutes a "substantial change" to the property, according to the RTB guidelines on RPZ? It says there must be a considerable change to the dwelling resulting in an increased market value. As it stands, the house is uninhabitable. It's certainly not fit for rental.

His friends are tradesmen who could do the work as a favour so I'm guessing 10k is a conservative estimate.

Would this constitute a substantial change?

The poor chap is awake at night with worry.
Thanks.

jamesthepeach

Colonel Claptrap wrote: »

My neighbour rented out his property to a family who have now been given a council house.
They were on the same low rent for 8 years. My neighbour was happy the place was rented, had moved abroad and was happy to receive the rent regularly from RAS. He didn't seek any rent increases.

Before they left, they thrashed the house. There has been considerable damage done to walls, Windows, floors, blinds, stairs and furniture. Some of the furniture has either been stolen or damaged and never replaced. The kitchen was never cleaned and is thick with grease. I doubt a professional cleaning company can salvage it.

The council are asking my neighbour to rent to another family but he is refusing to go down that route again. He wants to rent it privately but there is a considerable amount of work needed to get it up to standard. 10 grand at least.

He is worried that he is hamstrung by the RPZ rules and cannot increase the rent more than 4% past the 2009 rent rate of the old tenant. The property could easily fetch an additional €600 in the private rental market. In fairness to him, he's not greedy. He's just looking for a few bob to cover the 10k repair bill.

My question is: what constitutes a "substantial change" to the property, according to the RTB guidelines on RPZ? It says there must be a considerable change to the dwelling resulting in an increased market value. As it stands, the house is uninhabitable. It's certainly not fit for rental.

His friends are tradesmen who could do the work as a favour so I'm guessing 10k is a conservative estimate.

Would this constitute a substantial change?

The poor chap is awake at night with worry.
Thanks.

Well if it's not rentable now in the state it's in then that work is to change the rental value of the property. I think he should be ok.

Maybe also ask the council if they want to buy the house. Get a valuation done and sell it to them for that. Or maybe just put it on the market anyway.

Best off getting out of this whole rental market anyway. Renting is a no win situation nowadays.

I was just talking to a mate last night who rented his house out last November. It was in tip top condition when he rented it.

The tenant asked for a new mattress so he brought the new mattress up the other day.

Told me he nearly cried at the state of the house
He showed me the before and after pictures and it's disgusting. Walls have big holes in them. Doors have holes in them or hanging off. Kitchen cabinets in bits. The list goes on. Clearly a family who like to wreck things.

He doesn't know what to do.

I told him just leave it. And give them nothing else, and the minute they move out just sell up and move on. He should never have got into renting anyway in the first place and that was game compared to what else could go wrong.

The_Conductor

jamesthepeach wrote: »

Well if it's rentable now in the state it's in then that work is to change the rental value of the property. I think he should be ok..

That's just the problem- it patently isn't rentable- and will require at very minimum 10k of remedial work just to meet minimal rental standards- nothing special.

The OP needs to figure what 'significant renovation' they can do- to qualify for the exemption from the 4% increase- and then do up the property to a nice standard- to justify whatever the market rate is (I'd argue that simply returning the property to its pre-destroyed state is insufficient- make it into something special that people will be proud to live in- but safeguard your investment- the whole lark of one month's rent as a deposit- is a complete and utter piss-take- when a tenant can do 10-20k worth of damage to a house for no reason whatsoever.

jamesthepeach wrote: »

Maybe also ask the council if they want to buy the house. Get a valuation done and sell it to them for that. Or maybe just put it on the market anyway.

Best off getting out of this whole rental market anyway. Renting is a no win situation nowadays..

The council might be interested- if the OP can bring it up to spec- which entails expenditure of between 10-20k from the get-go. The OP needs to learn how to get a better class of tenant- who isn't going to destroy the property- not how to off-load it to the local authority- who are by no means a 'get-out-of-jail-free' card for landlords (or prospective sellers of property).

Local authorities have no interest in buying a thrashed property- they have a significant stock of those already- they want something they can let- not something to add to their to-do list.

jamesthepeach wrote: »

I was just talking to a mate last night who rented his house out last November. It was in tip top condition when he rented it.

The tenant asked for a new mattress so he brought the new mattress up the other day.

Told me he nearly cried at the state of the house
He showed me the before and after pictures and it's disgusting. Walls have big holes in them. Doors have holes in them or hanging off. Kitchen cabinets in bits. The list goes on. Clearly a family who like to wreck things.

He doesn't know what to do.

I told him just leave it. And give them nothing else, and the minute they move out just sell up and move on. He should never have got into renting anyway in the first place and that was game compared to what else could go wrong.

Your mate needs to get the tenant out ASAP- before the property is further damaged- spend whatever it takes to take remedial action- and then ensure- through an enhanced deposit or whatever other measure- that the next tenant takes care of the property.

What the hell is the story with holes in the walls? You make it sound like the tenant was wandering around the property randomly with a lump hammer- knocking holes in the walls?

There has to be consequences for tenants who destroy property- at present- that simply is not the case. The RTB adjudications and tribunals- are a joke- even if you do win- its wholly unenforceable- the tenant gets off scott free.

We need an independent agency for holding deposits- and we need to hike deposits to levels that are cognisant of the risk involved in letting the property. A standard 3-6 month deposit is the norm on the continent- and is what is being offered by companies here now- whether the private tenants like it or not- this is the norm- and this is what they are going to have to compete with. On the Brightside for tenants- the higher the deposit- the lower the monthly rent- its pretty standard to lower the rent on units- cognisant of the lesser risk- with a higher deposit).

Colonel Claptrap

He mentioned selling the property, if it is out of negative equity. The last tenant has left a bad taste in his mouth.

Who deems the renovation significant enough? Is there an inspection required by the RTB, or do they simply need a valuation before and after the work to demonstrate the change in market value? Does he notify the new the tenant that he is exempt of the RPZ rules? What about receipts for work done, materials etc? Is there a procedure he should follow before starting work?

It all seems a bit ambiguous.
Thanks

The_Conductor

Its currently vacant- I would suggest to cover himself- he should take extensive before and after photos- and get written quotations from tradespeople to bring it up to spec. There is no inspection- and the legislation is ambigious as to what a substantial change is- to be honest- while none of the work involved is earth shattering- the sheer amount of work- might be deemed a substantial change to the property. It is not in a fit state to let it- at present.

If I were in your friend's position- I'd spend the money to restore it- but not buy any furniture- dump the current stuff, paint it neutrally- and put it on the market. Esp. if he is abroad- even the tax situation- where a tenant is expected to withhold 20% of the rent in withholding tax and forward it to Revenue- is a nightmare.

Fix it up- dump the furniture, paint it neutrally- and sell it.

Michael D Not Higgins

The_Conductor wrote: »

Its currently vacant- I would suggest to cover himself- he should take extensive before and after photos- and get written quotations from tradespeople to bring it up to spec. There is no inspection- and the legislation is ambigious as to what a substantial change is- to be honest- while none of the work involved is earth shattering- the sheer amount of work- might be deemed a substantial change to the property. It is not in a fit state to let it- at present.

I would say the RTB, if challenged, would say the substantial change would be between when the property was let and rent was set, and the next time. Just because a lot of damage was fixed in the interim doesn't make it a substantial renovation if it's taken back to the same standard as it was when it was last rented.

OP, if the rent was last set in 2009, for a new tenancy your neighbour is entitled to at least a 32% increase, as per the RTB calculator.

The_Conductor

Michael D Not Higgins wrote: »

I would say the RTB, if challenged, would say the substantial change would be between when the property was let and rent was set, and the next time. Just because a lot of damage was fixed in the interim doesn't make it a substantial renovation if it's taken back to the same standard as it was when it was last rented.

OP, if the rent was last set in 2009, for a new tenancy your neighbour is entitled to at least a 32% increase, as per the RTB calculator.

I'm not entirely sure whether the RTB would even go down the road of disputing it- given the sheer amount of work necessary to restore it to habitable standards. This is partially why documenting the whole process is so critical- just in case it is disputed.

The OP has the benefit that its not actually specified in the Act what a substantial change to the property is- there have been numerous mutterings about it being a change that requires planning permission (it doesn't), structural work (in the OP's case- its not out of the bounds of possibility that it might) etc. A simple refurbishment at the elapse of a tenancy- is not covered- however, a refurbishment is simply a freshening up of a unit- its not the whole notion of having to fix walls and everything else that the OP has listed.

If the OPs mates are quoting him a minimum of 10k to restore the unit- I'd suggest the OP get a few written quotes from reputable builders- listing the works and giving all-inclusive prices to undertake a complete restoration (whatever it entails)- and thereafter- I'd put it down as a substantial change- and if it were disputed- I'd have it documented three ways to kingdom come- and be prepared to defend it to the hilt.

I'd also suggest the landlord lob a case in against the former tenant- not in any expectation of getting the money out of them- but as a mechanism to support the notion that a substantial amount of work was needed after their tenancy............ The RTB will (eventually) find in the landlords favour- and eventually- a year or however long later- offer to chase the determination on the landlords behalf- its up to the landlord whether or not they want to go down that road- I'd suggest they have nothing to loose- let the RTB do the running on it.

The RTB is supposed to protect both tenants and landlords from rogues- and by god, this tenant was a rogue.