Tenant moving to HAP

AmberGold

I've had a long term tenant, no trouble and prompt payers.

They want to move to HAP, I've no issues with this as I'm fully tax compliant, up to speed with RTB etc.

Given they were on Rent Allowance and had periods of unemployment I was charging them way below market rate, like €700 pm below. Houses same as mine in the estate renting for 2K Pm and I've been letting it at €1,300 for the last three years.

Although I make a significant loss on the property I had forgotten about the low rent but as I'm about to be put through the ringer with LC inspections, property modifications etc its put it back in the spotlight.

Whats the situation with rent increases and HAP, appreciate its only 4% pa but I'm conscious I have to start creeping it up soon.

Dav010

HAP is an agreement between your tenant and the LA, not between the LA and you, so you are entitled to increase rent within the RPZ regulations the same as any other tenant. You cannot discriminate against a HAP tenant, but neither are they entitled to preferential treatment above that of a private tenant.

Remember, HAP is paid in arrears rather than in advance, so make sure your tenant continues to pay in advance up to the date you receive your first payment from the LA, as per the tenancy agreement.

the_syco

AmberGold wrote: »

I was charging them way below market rate, like €700 pm below. Houses same as mine in the estate renting for 2K Pm and I've been letting it at €1,300 for the last three years.

If in a RPZ, increase to to max percent. At a guess, you can probably increase it to €1417.00
€1300 x ( 1 + 0.04 * 27/12) = €1417.00

If not in the RPZ, increase to whatever you want, before it does become part of the RPZ.

Although the 4% makes sense for the most part, it has done two things; it punishes people who were nice, like yourself, and has caused a lot of landlords to raise their rent by 4% per year even if they never raised during tenancies before.

Baby01032012

I don’t know where you got 12/27 when op said he’s been renting at 1300 for past 3 years.

And not in rpz which op said he clearly is he still has to provide 3 comparative properties as proof of market rate

AmberGold

Yes RPZ, thanks all. Yearly increases so it is.

MacDanger

OP, use the calculator here, it's pretty self-explanatory:

https://www.rtb.ie/calculator/rpz

Roughly based on the info you've given, it looks like you could raise it to 1469:

Summary of results:
Tenancy Type:
Existing

Date tenancy commenced:
22/04/2018

Date previous rent set:
22/04/2018

Date new rent to take effect:
22/07/2021

Previous rent amount:
€1300

Maximum rent permitted:
€1469.00

* Please note the amount above is the maximum increase permitted; Landlords can apply a lesser amount.

Calculation:
R x (1 + 0.04 x t/m)

€1300 x ( 1 + 0.04 * 39/12) = €1469.00

the_syco

AmberGold wrote: »

Yes RPZ, thanks all. Yearly increases so it is.

Use the RPZ Rent Calculator as above, and bump it up as high as you can.

murphaph

Yeah increase to the max because the LA will make you do all sorts of crazy "improvements" once they've inspected the property for HAP and keep increasing it every year at the max amount to get closer to the market rate. The LA won't be able to argue as long as you are below the market rate by so much.

utmbuilder

What if after the inspection you have to do renovations to get it up to spec.

New tenancy with upgrades should get full amount of hap surely.


Kitchen counter, doors, new toilets, receipts from a hotel while the work is being carried out.

Anyone else weigh in on this?

The_Conductor

Renovations prior to a letting (or during a letting) on other than a like for like basis, are not tax deductible.
No way on earth will you get hotel accommodation while work is being done.
Sounds like you want a new kitchen- and possibly a bathroom- if so, its on you- its not tax deductible.
Any upgrades with a new tenancy- are not tax deductible.

3DataModem

This is no use to you now, but I have seen evidence of some landlords jacking up the rent before the RPZ deadline a few years ago and agreeing off-the-record with the tenant that they could pay a lower amount and build up arrears that would never be paid off.

The case I am personally aware of (I know the tenant) the landlord and tenant did it retrospectively just before the tenant moved out, creating a paper trail of arrears notices etc. He hinted the landlord made it worth his while, and they had a long relationship. This allowed the landlord to charge full whack to the new tenant.