Does putting in a new kitchen count as "substantial refurbishment"?

rawn

Asking for a co-worker, his LL wants to raise the rent by more than 50% in January, she said she's putting in a new kitchen and i think painting the house? The house is in a RPZ.

lcwill

Government has said they are going to come out with a definition of "substantial refurbishment" soon.

The Minister gave a little preview of the definition the other day: "- “Substantial refurbishment” should involve major renovation works, such as rewiring, extensions, increasing the number of bedrooms or substantially reducing energy usage through insulation or new windows and doors, which clearly improve the quality of the accommodation being offered, to the extent that would merit an increased rent. It’s not envisaged that this would include merely cosmetic improvement works like re-painting of a property or new carpets/flooring."

http://www.housing.gov.ie/housing/private-rented-housing/minister-eoghan-murphys-address-publication-rtb-q2-2017-rent-index-report-and-further-rental-sector-measures

Michael D Not Higgins

Painting the house wouldn't count, the kitchen might though.

TooObvious

The sooner the definition for "substantial refurbishment" arrives the better. As it stands in this case IMHO a new kitchen does not imply substantial refurbishment, primarily because the tenant is entitled to certain facilities by law, and the renewal of these facilities does not provide him/her with any additional benefit.

__..__

Add a few things that might not be substantial on their own together and you get substantial too.
A friend just had all the carpet replaced by wood and tiles. Tiled the bathroom walls. Replaced a load of furniture and ripped out the old tired kitchen and put in a new one.
He would hit me if I tried to tell him that wasn't "substantial". To be fair though it looks like a whole new property now.

Mrs Shuttleworth

It is unconscionable that the landlord be subject to the RPZ cap where a tenant voluntarily leaves on good terms and the landlord then not allowed to raise the rent to the market rate of houses in the immediate vicinity.

If the landlord upgrades the property between the tenancies even in merely a decorative way he should be allowed increase the rent for the incoming tenant.

The proposed "substantial refurbishment" definition is too onerous and also discriminates against apartment owners who cannot extend a property and are also bound by services provided by the management company in the common areas.

I'd like to see the Government legally challenged on this one.

Edit: I may actually get a Counsel's opinion.

Wabbit Ears

Politly refuse and say that the refurbishments would not be considered substantial and state that you will reconsider this stance if the upcoming clarifications on what substantial is does indeed cover a new kitchen.

Michael D Not Higgins

Wabbit Ears wrote: »

Politly refuse and say that the refurbishments would not be considered substantial and state that you will reconsider this stance if the upcoming clarifications on what substantial is does indeed cover a new kitchen.

If we go by the suggested text as quoted above, it's still a woolly definition which will result in the same arguments. At what point does a refurbishment become a major one?

Replacing the entire kitchen is not "merely cosmetic" as what the minister indicated as not qualifying but is it major? We can't tell from the definition given.

April 73

Mrs Shuttleworth wrote: »

It is unconscionable that the landlord be subject to the RPZ cap where a tenant voluntarily leaves on good terms and the landlord then not allowed to raise the rent to the market rate of houses in the immediate vicinity.

If the landlord upgrades the property between the tenancies even in merely a decorative way he should be allowed increase the rent for the incoming tenant.

The proposed "substantial refurbishment" definition is too onerous and also discriminates against apartment owners who cannot extend a property and are also bound by services provided by the management company in the common areas.

I'd like to see the Government legally challenged on this one.

Edit: I may actually get a Counsel's opinion.

Right now there is no financial incentive to repaint, replace worn furniture or carpets or do any revamp between tenancies. This will eventually lead to bare minimum standards being maintained.

Why would a LL plough thousands in to revamp a property when the rent is capped anyway? Whatever about rent caps applying to existing tenancies - it shouldn't carry over where tenants have simply moved on & the LL is reletting.

Lumen

lcwill wrote: »

Government has said they are going to come out with a definition of "substantial refurbishment" soon.

The Act makes no mention of "substantial refurbishment".

The wording is: "a substantial change in the nature of the accommodation provided under the tenancy"

Source: http://www.irishstatutebook.ie/eli/2016/act/17/enacted/en/print

Here is a dictionary definition of "nature"

"the basic or inherent features, character, or qualities of something."

So you have to argue both that the standard of kitchen is part of the "nature of the accommodation", and that the upgrade of that kitchen is a "substantial change". Seems unlikely.

Lumen

April 73 wrote: »

Right now there is no financial incentive to repaint, replace worn furniture or carpets or do any revamp between tenancies. This will eventually lead to bare minimum standards being maintained.

I would guess that the framers of the legislation would be absolutely OK with this side-effect. The purpose is to avoid people being pushed into homelessness, not to ensure the quality of carpets.

__..__

Lumen wrote: »

I would guess that the framers of the legislation would be absolutely OK with this side-effect. The purpose is to avoid people being pushed into homelessness, not to ensure the quality of carpets.

No it's not. It's to commandeer private property for letting at the lowest rate the government are happy to pay.

FishOnABike

I wouldn't thnk so. The tenant had a fitted kitchen before and has a fitted kitchen after, there's no substantial change in the nature of the accommodation. People have new flooring, tiling, fitted kitchens, bathroom suites, central heating, etc. installed in houses while they continue to live in them all the time.

Under the wording in the act "a substantial change in the nature of the accommodation provided under the tenancy occurs" I'd consider anything short of structural work or work requiring planing permission not to be clear cut enough as to whether it would support a rent increase above the RPZ limits.

The area between what work you could do in your own house without moving out and structural work or work requiring planing permission is various shades of grey and don't think legislation or guidelines will ever be able to provide black and white answers. The extemes at either end shouldn't be contentious but I can see a continuing role for the RTB in adjucating on the cases in the middle to give a determination on what constitutes a substantial change in the nature of the accommodation.

Michael D Not Higgins

FishOnABike wrote: »

I wouldn't thnk so. The tenant had a fitted kitchen before and has a fitted kitchen after, there's no substantial change in the nature of the accommodation. People have new flooring, tiling, fitted kitchens, bathroom suites, central heating, etc. installed in houses while they continue to live in them all the time.

Under the wording in the act "a substantial change in the nature of the accommodation provided under the tenancy occurs" I'd consider anything short of structural work or work requiring planing permission not to be clear cut enough as to whether it would support a rent increase above the RPZ limits.

The area between what work you could do in your own house without moving out and structural work or work requiring planing permission is various shades of grey and don't think legislation or guidelines will ever be able to provide black and white answers. The extemes at either end shouldn't be contentious but I can see a continuing role for the RTB in adjucating on the cases in the middle to give a determination on what constitutes a substantial change in the nature of the accommodation.

The mooted definition above includes rewiring as substantial refurbishment. The house has wiring before and wiring after so there shouldn't be a substantial change but the government say there is.

Without a specific point where a certain amount of work actually becomes substantial what we have is the heap paradox.

FishOnABike

Michael D Not Higgins wrote: »

The mooted definition above includes rewiring as substantial refurbishment. The house has wiring before and wiring after so there shouldn't be a substantial change but the government say there is.

Without a specific point where a certain amount of work actually becomes substantial what we have is the heap paradox.

I'd be inclined to agree, rewiring (unless it is surface mounted in channels) usually requires chasing walls, lifting floorboards, replastering and repainting all while the house is without electricity for a significant time - not something you could probably do without moving out for a while.

It will be left up to the RTB to determine how many grains of sand constitute a heap. I would think it will also be smart enough to adjudicate on the deliberate use of unnecessary works as a tactical workaround to the RPZ legislation.

Michael D Not Higgins

FishOnABike wrote: »

It will be left up to the RTB to determine how many grains of sand constitute a heap.

And therein lies the problem. The proposed definition doesn't define the heap. It just says it has to be a heap and here's some examples of heaps. I very much doubt a more robust definition will appear.

Going back to the OP, this is very much a boundary case which straddles the line but isn't one side or the other. It could come down to what's actually going into the new kitchen. Perhaps if some re-wiring needs to be done it counts. Perhaps if a whole new set of energy efficient appliances are fitted that counts. Perhaps it's just ripping out the cupboards and putting new ones in and that doesn't count.

This new definition doesn't appear to solve the boundary cases.

I don't see why improvements like this should not allow an increase in rent. They are increasing the value of the property and increasing what its worth to rent so common sense would mean that a rent increase should be allowed.

awec

Maya Defeated Meadow wrote: »

I don't see why improvements like this should not allow an increase in rent. They are increasing the value of the property and increasing what its worth to rent so common sense would mean that a rent increase should be allowed.

Maybe, maybe not. We don't know.

If the landlord is ripping out a cheapo kitchen and putting a new cheapo kitchen in it's hardly an improvement.

If he's ripping out a 20 year old kitchen and putting in a new modern one with granite worktops and all the modern conveniences then yea, that's obviously a pretty substantial improvement.

awec

awec wrote: »

Maybe, maybe not. We don't know.

If the landlord is ripping out a cheapo kitchen and putting a new cheapo kitchen in it's hardly an improvement.

If he's ripping out a 20 year old kitchen and putting in a new modern one with granite worktops and all the modern conveniences then yea, that's obviously a pretty substantial improvement.

If you have two houses side by side one with an old chepo kitchen and one with a new cheapo kitchen I'd be confident the one with the new kitchen would sell for more and rent for more.

Michael D Not Higgins

Maya Defeated Meadow wrote: »

I don't see why improvements like this should not allow an increase in rent. They are increasing the value of the property and increasing what its worth to rent so common sense would mean that a rent increase should be allowed.

Theoretically, any improvement increases the value of the property. That doesn't mean it's necessarily a "substantial change in the nature of the accommodation" which is what's required to reset the rent to market rent.

FishOnABike

Maya Defeated Meadow wrote: »

I don't see why improvements like this should not allow an increase in rent. They are increasing the value of the property and increasing what its worth to rent so common sense would mean that a rent increase should be allowed.

awec wrote: »

Maybe, maybe not. We don't know.

If the landlord is ripping out a cheapo kitchen and putting a new cheapo kitchen in it's hardly an improvement.

If he's ripping out a 20 year old kitchen and putting in a new modern one with granite worktops and all the modern conveniences then yea, that's obviously a pretty substantial improvement.

It may increase the value of the property and it may be a pretty substantial improvement over the what it is replacing but the relevant question is whether it is a substantial change in the nature of the accommodation provided - hint if I was selling a house, unless it was a wreck of a fixer upper I wouldn't be replacing kitchen units and expecting to break even or better on their replacement cost.

Lumen

Maya Defeated Meadow wrote: »

I don't see why improvements like this should not allow an increase in rent. They are increasing the value of the property and increasing what its worth to rent so common sense would mean that a rent increase should be allowed.

The issue isn't "increasing the rent", it's "resetting the rent".

So if you're charging €1000/mo for an RPZ apartment whose market rent is €2000, and you do the kitchen and its market rate is now €2200 (+€200/+10% on market rent), then you get to charge either €1000/mo or €2200/mo, depending on interpretation of the rules, but not €1200/mo (+€200) or €1100/mo (+10%), either of which would allow you to recover the cost of the kitchen eventually.

DubCount

Unfortunately, "making a substantial change in the nature of a property" is a fuzzy concept. As a general rule, fuzzy concepts make bad laws. Even when we get some case law to help with interpretation, there is always going to be a struggle to figure out where the line between a change and a substantial change lies.

For OP, I think the tenants have 2 choices
1) Accept the change as substantial, accept the higher rent, and move on
2) Bring a case to the RTB arguing the change is not substantial, hope to win, and risk the landlord selling up or moving back into the property themselves etc. if they do win

_Dara_

awec wrote: »

Maybe, maybe not. We don't know.

If the landlord is ripping out a cheapo kitchen and putting a new cheapo kitchen in it's hardly an improvement.

If he's ripping out a 20 year old kitchen and putting in a new modern one with granite worktops and all the modern conveniences then yea, that's obviously a pretty substantial improvement.

And because the landlord is considering doing this in order to charge more rent, I doubt it'll be anything other than a cheapo kitchen otherwise it could take years to reap financial benefit from doing so. A high quality kitchen needs a lot more extra rent to pay it off. And in that time, market rents might decrease. So yeah, more than likely it'll be the cheapest new kitchen possible. And, as you say, that's not really an improvement. It might even be lower quality than what was there before.

_Dara_

Maya Defeated Meadow wrote: »

If you have two houses side by side one with an old chepo kitchen and one with a new cheapo kitchen I'd be confident the one with the new kitchen would sell for more and rent for more.

What if a good, solid, old kitchen is replaced with a cheap, new one? I'd see that as a downgrade personally.

GhostyMcGhost

__..__ wrote: »

Add a few things that might not be substantial on their own together and you get substantial too.
A friend just had all the carpet replaced by wood and tiles. Tiled the bathroom walls. Replaced a load of furniture and ripped out the old tired kitchen and put in a new one.
He would hit me if I tried to tell him that wasn't "substantial". To be fair though it looks like a whole new property now.

Type of renovation should be linked to % increase

A new window should not equate to 50% increase

3 bed up to 4 bed ? Yeah definitely! A new kitchen of it counts should allow say 10/20%

Otherwise a window and a squirt of foam and you can up rent by what you like which is a bit of a loophole

Could link it by house value after works? If it’s worth an extra 10% then rent can go up 10%

99nsr125

Well no kitchen was good enough for Redacted to claim he couldn't be resident and skip out evading tax

__..__

GhostyMcGhost wrote: »

Type of renovation should be linked to % increase

A new window should not equate to 50% increase

3 bed up to 4 bed ? Yeah definitely! A new kitchen of it counts should allow say 10/20%

Otherwise a window and a squirt of foam and you can up rent by what you like which is a bit of a loophole

Could link it by house value after works? If it’s worth an extra 10% then rent can go up 10%

Nobody is talking about going over fair market rate last I looked.

rossmores

if its a sink?ah  pls close this ****e down

alias no.9

_Dara_ wrote: »

What if a good, solid, old kitchen is replaced with a cheap, new one? I'd see that as a downgrade personally.

Does a substantial change in the nature of the accommodation necessarily imply an improvement?

If an apartment currently let with a parking space included, to offer it to a new tenant without the use of the parking space is a very significant change to the nature of the accommodation, but not for the better unless you take a hard-line environmental stance.

You could even advance the argument that the change in nature is substantial and breaks the rent cap, however in recognition of the fact that it is a downgrade, offer it at a discount to the market rate for a similar property with parking albeit at a rate higher than the rent cap would otherwise have allowed.

It's a big steaming pile of horse$hit but what else would you expect from a horses ar$e piece of legislation.

By far the easiest and best solution to all this is scrap these idiotic rent pressure zones and allow LLs to set the rent at an amount that the market will accept.