Trouble with tenant

AusVisa123

SusanC10 wrote: »

Look OP, I understand that you were under pressure but you seem to have made big life decisions without looking into the legal/tax/other consequences of doing so.

Please don't put your head in the sand on this. Take the steps to correct things now.

I intend to thank you

Ray Palmer

AusVisa123 wrote: »

Look it wasnt the tax issue I was avoiding, It was the fact that it's my primary residence, I felt if I declare it as being buy to let my mortgage would change and I didnt want to get into all of that. It's not big money were talking.

Right maybe I've went about this the wrong way. I bought my house the year before the big crash. At one stage it was under half the value of what I paid for it. I continued paying my mortgage even though I could have thrown the keys back but accept I owe the money. I fell into some arrears throughout the year but have it fully rectified now. I never got a deal either or a write off which some people have. My mortgage outstanding to this day is still about 20% above market value. So please dont slate me without knowledge of what I've been through. I'm trying to do the right thing I may have went about it wrongly.

The banks are screwing us, The governments. But that's another story. I'm just trying to get by. Maybe the best thing for me was to throw keys back. Then that's putting a hell of a lot back on the taxpayer anyway. Without talking houses I would be very surprised if everyone of you with the negative comments is 100% tax compliant in every area. I didnt realise not registering my tenancy was this bad. But as I said I will look into and sort it and do it right.

You are basically saying you were willing to lie so as not to effect your mortgage. You haven't paid tax and revenue do care even if you think it is small money.
You effect the rental prices of others.You just didn't care about anybody but yourself

You couldn't have just thrown the keys back

California Dreamer

Great to see so many mightier than thou people here.

Guy made a mistake, looks for advice. Gets shot down!

Fian

OP:

you need to register this tenancy with RTB.

You need to make a tax declaration for the income. What year did you start renting it out? the pay adn file deadline for 2017 passed two weeks ago, but you should file and pay the late filing fee. If you rented it out ebfore that pay adn file for those years too. In that case you will probably also need an accountant.

Download the standard forms from the RTB one stop shop and give them proper notice of a rent increase through those forms. There is little point in sending your dad to talk to them after they have threatened a solicitor's letter.

If you are outside an RPZ you would probably be sensible to raise the rent to market rent, in case an RPZ is imopsed on your area. If it is the sale price (to investor purchasers) will be directly impacted by teh rent cap - below market value rents = below market value price, unless you are selling to someone who wants to live in the house themselves.

AusVisa123

Ray Palmer wrote: »

You are basically saying you were willing to lie so as not to effect your mortgage. You haven't paid tax and revenue do care even if you think it is small money.
You effect the rental prices of others.You just didn't care about anybody but yourself

You couldn't have just thrown the keys back

I'm sorry but your wrong with the last part, Yes I could have. I was with a PIP and had meetings with mortgage company. Never got a deal with bank but that part was on the table. I decided against it , Dont ask why cause I'm hitting my own head against the wall. I think all will fair out ok in the end, but I dont know if it's worth all the stress it has put me through, through the years owing so much money at such a young age. But I made that decision. I'm not trying to blame someone else. I have went about renting my house for the 2 years and next year until I move home the wrong way I understand that now.

I will look into accountant etc to get everything above board moving forward. I appreciate the advice I'm getting.

dennyk

Are you still residing in Australia? If so, the tenant is required to deduct 20% from their rent payment and remit it to Revenue on your behalf. Have they been doing this? Is the current €600 rent before or after that deduction?

You may still be able to fix things at this point, but it is going to cost you some money:

- Register the tenancy with the RTB and pay your late registration fee

- File your taxes and get current with Revenue, paying any late filing fees and interest on back taxes accordingly. And don't forget to get yourself squared away with the tax authorities in Australia regarding this rental income as well; you hopefully won't owe anything there thanks to tax treaties and such, but you may still need to file and report it regardless...

- If you still live abroad, notify your tenant that they must start deducting 20% of their rent payment and remitting it to Revenue to cover your taxes.. This means they will directly pay you 80% of their actual rent amount (e.g. €480 instead of €600 under their current rent). You will be able to claim a credit for the amount they remit to Revenue on your behalf when you go to pay your own taxes. In the end you may either still owe some money or you may be due a small refund, depending on your actual tax situation; I'd suggest consulting with an accountant or other tax professional for advice if you don't know the rules around what expenses, etc. you can claim to offset your rental income.

- If you still wish to increase the rent, send your tenant a valid rent review notice, making sure to include all of the required information (including examples of comparable properties to demonstrate market rate). Make sure everything is in order in case they decide to challenge the validity of the notice.

- Go to https://onestopshop.rtb.ie/ and read up on *everything* regarding the rules and regulations and proper procedures so that you don't make any further mistakes. Pay very close attention to the rules regarding Part 4 tenancies and how you can (and can't) legally terminate them, especially if you are planning to move back to Ireland and want to move back into your home again. Have an alternative option for accommodations in mind and be prepared to go through a long legal process should the tenant decide to challenge your termination or overhold; they've probably sussed out by now that you aren't really familiar with this whole landlord thing and it's possible they may see an opportunity to take advantage of that.

Claw Hammer

Graham wrote: »

1) register the tenancy with the RTB, even with the late fee/penalty it's not much.
2) issue your tenant with a formal notice of rent increase with the appropriate notice period.
3) find an accountant to consult with.

When the rent increase comes into effect, you can follow the arrears process if the tenant fails to pay the increased rent.

Tip: Don't confuse the thread or yourself by throwing in rants about the government or the banks. They are entirely irrelevant to your current situation.

The o/p has already made a failed attempt to increase the rent. He may now be stopped from increasing the rent until another 12 months has passed.

sillysmiles

dennyk wrote: »

- If you still live abroad, notify your tenant that they must start deducting 20% of their rent payment and remitting it to Revenue to cover your taxes.. This means they will directly pay you 80% of their actual rent amount (e.g. €480 instead of €600 under their current rent). You will be able to claim a credit for the amount they remit to Revenue on your behalf when you go to pay your own taxes. In the end you may either still owe some money or you may be due a small refund, depending on your actual tax situation; I'd suggest consulting with an accountant or other tax professional for advice if you don't know the rules around what expenses, etc. you can claim to offset your rental income.

What happens to the OP if, as his post suggests, the tenants are not averse to being selective it what they tell that tax office, and they continue to pay the 480 into his account, and when he gets home, the 20% hasn't been submitted to reviewed and he has been shafted both ways?

amcalester

sillysmiles wrote: »

What happens to the OP if, as his post suggests, the tenants are not averse to being selective it what they tell that tax office, and they continue to pay the 480 into his account, and when he gets home, the 20% hasn't been submitted to reviewed and he has been shafted both ways?

Revenue will chase the tenant for the money whether it was deducted from the rent or not.

TheChizler

sillysmiles wrote: »

What happens to the OP if, as his post suggests, the tenants are not averse to being selective it what they tell that tax office, and they continue to pay the 480 into his account, and when he gets home, the 20% hasn't been submitted to reviewed and he has been shafted both ways?

The tenant should be responsible for it in that case. The tenant is legally the responsible one if it's not paid to Revenue, Revenue have waived it in the past when the tenant didn't do the deduction out of ignorance. If they told the OP they were deducting 20% for Revenue they couldn't claim ignorance.

tvjunki

When you register with rtb either get either a letting agent or your dad as agent so the tenant will not hold the 20%.
Cancel t r s if you get it and if you gave then give back to revenue.

Put everything in writing. Texts are not accepted as notification of rent increase.
Start again with letter saying the rent is going to increase.
Give the correct notice of rent increase with 90days notice in rtb templates. Make sure you put 3properties similar to yours on the form. Keep copies on your pic. Get your dad or agent to reg delivery without signature of the letter.

The tenants cannot just be told to leave. Being threatened with threshold solicitors can happen. Fix this situation now.

Big thing do not give lease as they will have more rights.

Claw Hammer

tvjunki wrote: »

When you register with rtb either get either a letting agent or your dad as agent so the tenant will not hold the 20%.
Cancel t r s if you get it and if you gave then give back to revenue.

Put everything in writing. Texts are not accepted as notification of rent increase.
Start again with letter saying the rent is going to increase.
Give the correct notice of rent increase with 90days notice in rtb templates. Make sure you put 3properties similar to yours on the form. Keep copies on your pic. Get your dad or agent to reg delivery without signature of the letter.

The tenants cannot just be told to leave. Being threatened with threshold solicitors can happen. Fix this situation now.

Big thing do not give lease as they will have more rights.

A failed attempt to increase rent means that another attempt can't be made for the interval.

Graham

Claw Hammer wrote: »

A failed attempt to increase rent means that another attempt can't be made for the interval.

Have you a source for that Claw Hammer, as always the devil is in the detail and it would be useful to get familiar with the detail.

Axwell

Claw Hammer wrote: »

A failed attempt to increase rent means that another attempt can't be made for the interval.

A rent increase attempt by text message is invalid.

Graham

Axwell wrote: »

A rent increase attempt by text message is invalid.

I was thinking along the same lines. Invalid would suggest it may as well have not happened rather than it failed.

phildin

For what it's worth, I don't believe the banks go proactively looking at registrations of tenancies so you should be able to get everything registered with the PRTB and revenue without impacting on your mortgage rate.

Whether you are obliged to tell the bank that it's no longer your primary residence is another question, that's something that will be in the T&Cs of your mortgage agreement. If the bank did find out, they could decide to switch you to a buy to let rate but anecdotally, I haven't heard of this scenario.

My suggestion is to register with the PRTB (as everyone else has suggested), hire a solicitor to send a proper notice of arrears and separately, a notice of rent increase whenever it's legal/appropriate to do so. The same solicitor should be able to advise you on the best way to engage with revenue. Since you'll be a making a voluntary disclosure, you can expect them to be more accommodating than they would with someone who's caught committing fraud but you'll still need a solicitor to make sure you don't put a foot wrong in this process. It might be costly but it will be well worth it in the end to have this mess tidied up correctly.

Graham

phildin wrote: »

send a proper notice of arrears and separately, a notice of rent increase whenever it's legal/appropriate to do so.

I'm reading it that the tenant is only in arrears by the amount of the invalid rent increase, i.e. they're not actually in arrears.

Claw Hammer

Graham wrote: »

I was thinking along the same lines. Invalid would suggest it may as well have not happened rather than it failed.

The RTB hae held that an invalid rent increase is a failed attempt and resets the clock.
https://www.rtb.ie/documents/TR0216-001600/TR0216-001600-DR1215-22832%20Report.pdf

TheChizler

Claw Hammer wrote: »

The RTB hae held that an invalid rent increase is a failed attempt and resets the clock.
https://www.rtb.ie/documents/TR0216-001600/TR0216-001600-DR1215-22832%20Report.pdf

Could this be seen as part of the same review though?

AndrewJRenko

Does your house insurance know that you have tenants in the property?

Graham

Claw Hammer wrote: »

The RTB hae held that an invalid rent increase is a failed attempt and resets the clock.
https://www.rtb.ie/documents/TR0216-001600/TR0216-001600-DR1215-22832%20Report.pdf

That case appears to hinge on the fact "There can be no doubt
but that the landlord sought to review the rent in 2015", I'm not sure that the same can be said of the OP and 3 test messages.

That said, I am not a lawyer. The OP should get their own qualified legal advice.

Who knows how an RTB tribunal would view things, even those suitably qualified have a hard time predicting and the RTB do have a reputation for being fairly pro-tenant in these matters.

phildin

Graham wrote: »

I'm reading it that the tenant is only in arrears by the amount of the invalid rent increase, i.e. they're not actually in arrears.

Sorry, I missed that. @OP: probably best to forget about any notion of arrears then.

whippet

Don’t forget that any TRS you’ve been claiming while renting out the house will need to be repaid .. revenue don’t miss tricks like that ( I found out the hard way)

tvjunki

Claw Hammer wrote: »

The RTB hae held that an invalid rent increase is a failed attempt and resets the clock.
https://www.rtb.ie/documents/TR0216-001600/TR0216-001600-DR1215-22832%20Report.pdf

If you make a mistake then the 12 or 24months rule does not apply. There is an omissions or mistake accounted for in residential tenancies act.
op sent a text and not in the right format so cannot be accounted as a review. The report showed the landlord submitted a rent review to the tenant and the again a few months later. The first was queried with rtb and the other was sent while a case was being sent a few months later.
Saying he has to wait another 12 or 24 months for rent review does not seem right.

AusVisa123

I got a lot of very useful information here, I appreciate people taking there time writing with detail and links as to best approach this. I will read up on it all later and take the necessary steps.

No I am not receiving TrS so I dont have to worry about any back payment outstanding in that regard.

Thank you
Brendan

utmbuilder

You have not one everything by the book but its fixable without sendin yourself to the poor house.

If your paying tax abroad no tax may be owed by you.

One thing you must do and this is more important than sending your dad around, get renters insurance , so your covered if the place is damaged.

Other than that treat the relatipnship like they are the boss, try make up with them the system is really really really against the landlord.

If your dad calls in make sure he understands property rights are practically gone and not to make the situation worse.

Your only in serious serious trouble if you have been claiming the dole yourself while away. Which im sure is not the case, try keep them happy at what ever a month they wobt move out it simply is not happening like that at the moment

Grumpypants

A bad start, but like many others you never set out to be a landlord and have found out the hard way how much goes into it.

But it's not beyond fixing. Get registered with the PRTB and pay the back tax. Prob best to get an accountant at this stage to help. With the amount you can write off and the low rent income on a high mortgage the bill won't be that high.

Just make sure your dad doesn't go storming round there and make things worse.

Also if you know they are committing benefit fraud then you should report them. We can't all sit around blaming governments and bankers and at the same time turn a blind eye to those committing fraud.

Claw Hammer

TheChizler wrote: »

Could this be seen as part of the same review though?

No, The time has passed when that review would have come into effect and the o/p has already demanded arrears.

Claw Hammer

tvjunki wrote: »

If you make a mistake then the 12 or 24months rule does not apply. There is an omissions or mistake accounted for in residential tenancies act.
op sent a text and not in the right format so cannot be accounted as a review. The report showed the landlord submitted a rent review to the tenant and the again a few months later. The first was queried with rtb and the other was sent while a case was being sent a few months later.
Saying he has to wait another 12 or 24 months for rent review does not seem right.

The o/p demanded arrears so he considered it a review. he can't now change his story. The RTB is notoriously pro-tenant so the o/p is goosed. What is your source for the proposition that "If you make a mistake then the 12 or 24months rule does not apply. There is an omissions or mistake accounted for in residential tenancies act."

marieholmfan

OP I would strongly advise that you or your agent meet with the tenant in a friendly way as you are in breach of the terms of your mortgage.
The banks don't trawl the RTB site looking for tenancies.

Graham wrote: »

1) register the tenancy with the RTB, even with the late fee/penalty it's not much.
2) issue your tenant with a formal notice of rent increase with the appropriate notice period.
3) find an accountant to consult with.

When the rent increase comes into effect, you can follow the arrears process if the tenant fails to pay the increased rent.

Tip: Don't confuse the thread or yourself by throwing in rants about the government or the banks. They are entirely irrelevant to your current situation.

Grumpypants wrote: »

Also if you know they are committing benefit fraud then you should report them. We can't all sit around blaming governments and bankers and at the same time turn a blind eye to those committing fraud.

Given that the OP is not tax compliant and is in breach of the terms of his mortgage this is not good advice.

TheChizler wrote: »

The tenant should be responsible for it in that case. The tenant is legally the responsible one if it's not paid to Revenue, Revenue have waived it in the past when the tenant didn't do the deduction out of ignorance. If they told the OP they were deducting 20% for Revenue they couldn't claim ignorance.

The tenant is responsible. That's Revenue's position.