Rental Allowance Scheme (RAS) pros/cons

DamoKen

Hi, I'm going to be moving abroad for the next few years with my company so I'll be renting out my house while I'm gone. I've been looking at the fairly recent council scheme, the RAS (http://www.dublincity.ie/living_in_the_city/your_home/housing_services/Rental_Accommodation_Scheme/) with a lot of interest and was wondering if anyone here thats a landlord has availed of it?
The pro(s) seem very attractive in that the council guarantees to pay an agreed upon rental sum directly to the landlord whether or not they have a tenant in place. Also there appears to be a screening process whereby unsuitable tenants will not be considered. By unsuitable I think this would mean a history of problems with neighbours, damage to property, criminal record etc, not 100% sure on this though so don't quote me!
So, for peace of mind as far as the mortgage being paid on time this would seem ideal, the minimum contract period is 5 years which at the moment suits me, however I've been assured if circumstances were to change for myself this could be reviewed. Also if I wished to sell there would be nothing to prevent me doing so as long as the standard notification was given to the tenant which is fair enough.

Thoughts, advice from anyone who is currently doing this, considered it but decided against it, knows anyone who is using it from either a tenant or landlord position would be really appreciated.

Thanks

antoinolachtnai

I can't speak for the benefits. The drawbacks are:

- the county council is not a party to the tenancy. The county council gets an agreement which gives it a lot of rights (to place tenants at its own discretion) but very few responsibilities

- you don't get to pick the tenants

- if the tenants you didn't pick trash the place, it is up to you to repair the house

- a lot of the LA's are said to believe that there are only 11 months in the renting year. (don't know if this is true for Dublin). Realistically, they should be paying a premium considering the conditions they are proposing.

If you ask me, if the local authorities want access to housing, they should either build or buy the property, or else take rent and repair leases, the same as everybody else.

If this is genuinely the only way you can tenant your property, then maybe this is for you.

DamoKen

cheers for the reply antoinolachtnai, some good points raised. About the tenant trashing the place, would it not be more or less the same as with a standard tenant? I mean the council have agreed to pay up to 1 months rent for repairs, the equivalent to the deposit that is used to cover damage caused under a normal rental agreement. What would be the difference here?
What exactly is a rent and repair lease? I haven't rented myself in the last 5 years or so but from what I recall a 1 month deposit was required in case damage was caused, is this the equivalent to it?

As far as picking tenants, I know I would prefer to pick myself, but as I'll be out of country (NZ), this would be impossible. The alternative to the council picking them would be a management company doing so, and to be honest I have very little faith in these companies, having rented through them myself and seeing the way they manage properties rented by friends etc.
Their only concern is to get a tenant, what the tenant is like or does in the house seems to be of secondary importance.

Whereas at least with the council picking tenants there is a screening process. I know this process somewhat as I have a friend who lives in an apartment complex in Dublin city which was one of the flagship projects for a council scheme. So far that has worked really well, he has yet to experience a bad neighbour (tenant) and he's been there 3 years now.

I think in the end the guaranteed payment of rent to cover the mortgage is a primary concern, closely followed by the welfare of the property. However with the second concern I think you would always be taking a risk to a certain extent when renting, and if like me will be out of the country for a few years, can have very little input into what type of tenants you end up getting.

antoinolachtnai

There is no 'screening process' for the council. The council must deal with pretty much all comers who meet the criteria. They all have to go somewhere.

You have no input whatsoever into the selection of the tenant, particularly as you will be away. As a result, you run the risk of becoming 'the landlord of last resort', i.e., the council will dump their worst tenants on you.

This sounds like a pessimistic approach, but this is definitely a real possibility. The guy you deal with initially in the council may be excellent, but the guy who follows him may be incompetent, and you will have no protection against his incompetence. In fact, if a tenant trashes your apartment and leaves, you will be expected to repair the property within a month for another tenant, or face the possibility of being sued for breach of contract.

Unfortunately, the risk of damage is higher with RA tenants than with a tenant on an income. This does not mean that there is anything wrong with RA tenants. RA tenants come in all flavours. It's just that there is a higher risk when the tenant, who has little or no means has no stake in the situation (no deposit and no risk of being pursued through the PRTB), and when you are so far away from the situation.

Flagship projects tell you nothing. Of course the council is going to put the best tenants into them (and the vast majority of RA/LA tenants are excellent tenants).

A rent and repair lease is what you get in a commercial situation. For example, if I were to rent a shop or a hotel from a landlord, I would be expected to look after the building. That's because they will have little or no effective control over the building during the lease.

Effectively, the council is planning on subletting your property, and I think they should take on the risk of doing that. If not, they should pay a premium. The health boards used to sometimes take property on this basis.

Everything you say about management agents makes sense to me. But what can you do? At least you won't end up as landlord of last resort in the whole housing market, and at least you can fire the agent. All I can suggest is to hunt around for a decent agent. This will cost you over 10 percent + VAT for sure.

The key to successful rentals is finding great tenants and getting them to stay, thereby minimising maintenance and rental voids, so you can keep the rent reasonable. No magic way to do that, I'm afraid.

The Novacastrian

We have a house rented out for the past 10 years. it is alot of trouble and hassle. we've had romanian gypsies wreck the place, russian mafia hold tenants at knife point and Irish wasters not pay rent and thrash the place. House is in a nice area btw.

everytime someone moves out you lose at least 2-3 months rent due to repairing the place and looking for new tenants.

So this year we decided that we lose so much money that we may as welll have guaranteed rent for 4 years (not 5 as above) and take our losses from that. Council have been paying us now for a few months with no tenants in.

it is a good way to go but it will need managing from someone here in Ireland.

antoinolachtnai

Great to hear it is working out for you goslie. Hopefully nothing as crazy as your experiences will happen to the OP, no matter what way they go.

DamoKen

cheers for the replies guys, given me some food for thought, as well as a few more questions for the council before I decide whether or not to rent to them. I'll definitely have to ask about this screening process I was told about by the guy in the council, he actually made a big deal about it so I'm a bit confused when you say antoinolachtnai that there is none.
He wouldn't just bullsh*t me outright would he?

What type of scheme did you go on goslie? What you described with previous tenants not paying rent etc is what would scare the hell out of me. Ok there is always the risk that tenants on the RAS will thrash the place, but there is also the possiblity that tenants coming through normal channels i.e management company, will do the same. Plus the added risk of not paying the rent. At least with the RAS I'd have some degree of security, that is the mortgage paid.

As to having someone in Ireland manage the place, yeah I know, I've a few friends plus family who have said they will act as points of contact as well as carry out periodic inspections.

I'll definitely enquire further into that potential problem you highlighted antoinolachtnai, that is tenants thrashing the place and then me being contractually obligated to repair the damage out of my own pocket within a month.

Again cheers for the replies, gives me a better idea of potential problems so with any luck I can get responsibilities agreed on in advance.

antoinolachtnai

I'm sure the person you are dealing with is speaking in good faith, and he certainly doesn't intend for you to have problem tenants. The problem is that he might not always be the person dealing with your property.

I am sure that the person you are dealing with will attempt to screen the tenants he puts in your accommodation. The problem is that in general, the LA is not in a position to screen the people it provides services to.

The thing about having to repair the damage within a month is an extreme case, I doubt if the council would go that far, but legally speaking, there appears to be nothing to stop them doing this.

To be fair, I am pointing out the worst points of this system. On the other hand, the LA's are very anxious to make this system work.

gata

i've just been to cork city council to apply as a tenant for a house in the RAS scheme and they informed me that they would be doing a garda background check, so that seems to be a fairly efficient screening method.

karennokia

Hi,does anyone know whether tenants of the ras scheme only get considered if they are in receipt of social welfare?Havent heard one story or anything so was just wondering as I was considering it for myself and my family,thanks for any help given.

Cadoche

karennokia wrote: »

Hi,does anyone know whether tenants of the ras scheme only get considered if they are in receipt of social welfare?Havent heard one story or anything so was just wondering as I was considering it for myself and my family,thanks for any help given.

RAS properties are allocated by Local Council's Allocations Section to families who have a long term housing need and who cannot provide housing from their own resources and who meet the necessary requirements. i.e. they are in receipt of Rent Supplement from the HSE for a period in excess of 18 months and are on Council's Approved Housing List.


The RAS tenant will avail of the opportunity to live in top quality accommodation in a private estate with the State contributing towards the rent. The security of tenure and protections offered by the Private Residential Tenancies Board (PRTB) make living in RAS accommodation a realistic and attractive medium to long term housing choice. The tenants are assessed for rent under the Differential Rent Scheme and pay their weekly rent to the Council in accordance with their income.

If you are interested in finding out more about the scheme, please contact your Local Council. Hope this info was helpful.

kimgdoran

Hi, just wanted to revisit this as have found a really nice couple with a child on RAS, they want to take the apartment. I'm wondering if anyone could answer the following:
1. Does Dublin city council offer less than advertised rent in view of the security of payment the scheme offers?
2. Are the guidelines on the screening performed by the LAs documented anywhere - or are they done in an ad-hoc manner (i.e. not at all)
3. If the rental prices soar is there any opportunity to renegotiate within the 4 year period.

Many thanks in advance
KIm

dazzlemoo

Hi I was just reading about the RAS scheme and I just have one question.
If you, as a tenant, move into a property under the scheme, how long is your residency guaranteed for?
For example, are you guaranteed the rental for 5 years? More?
Any help greatly appreciated!

toexpress

RAS has it's drawbacks but if you are sure you can let them have the house for a protracted time then it's quite good. I have never had involvement here I have to admit but in the UK I have let directly to the council on similar agreement and whatever happens to the property they have to give it back to you the way they got it.

Now all of that said in Ireland I don't do the whole rent supplement scheme thing. It's a nightmare and it has gotten a whole hell of a lot worse recently as the department now sends the cheque to the "client" and they are then responsible for paying it onto the Landlord. Social Welfare tenants are a nightmare. If you see another thread that I started here you will understand my point of view. But it's not a chance that I would take.

So you have to make a call on this yourself, but my view is I accept tenants that are professionals and whom I can easily reference

Skerries

I have been renting to the RAS for 5 years now, I'm on my 2nd contract of 4 years
We weren't contacted about a screening process and were just given tenants who are still there and have had no problems with them
We have to manage the place if there are any problems with the house as they don't take care of that
We have to send in Tax clearance certs every year but someone I know in a different county don't so there seems to be different sets of rules around
The rent has come down twice since we signed with them and I'm hoping it will go back up when rents improve again

CricketDude

My friend was on it and last year had to pay €24,000 to get their house fixed up. They got nothing from RAS for the damage.

They people who lived in it left the house to go home. They gave it to friends and told nobody. the RAS guy after about 3 months cottoned on that the original people were not around anymore and decided to have new people move in.
But they couldnt as there were now effectively squatters there. The RAS guy withdrew the monthly rent and said it was the LLs problem.
Eventually when they were evicted the RAS tried to hold him to the contract.

All the damage was done by someone purposely putting a hole in the bottom of the water tank in the attic. The house was flooded even before they were moved out. Whole place was destroyed.

And thats only one of the horror stories I have about friends and the RAS scheme.

dazzlemoo

I am considering going into the RAS Scheme as a tenant and have some questions if anyone could help me with them?
I see from the application form, the council are asking me what areas of the city I want to live in.
So does this mean I have to go and find the property or does the council find me the property?

Also, how long am I guaranteed a place on the scheme? Is there a limited amount of years?
Thanks in advance.

DaveC85

I am currently a tenant under the RAS scheme and it seems to me that everyone here seems to paint these tenants with the same brush, I'm currently in my second house under the scheme and it's 50/50 between landlord and tenant. Yes some tenants might be a nightmare but the same can be applied to landlords. I moved out of my previous house because of the lack of insulation in the house. It was heated with storage heaters which cost us on average 500 every 2 months to keep the house moderately warm but as soon as the heating was switched off the house was cold again so pretty much we had to have the heating on every 24hours.

You speak of us tenants as being beneath the landlords. After requesting the house be insulated the landlord asked us to leave after our year contract was up only to have the heating system re done and an oil system installed and the house insulated. The current house I am living in has a heating system that's continuously air locked which took a notice of termination of contract to get fix and then to find out we were exposed to carbon monoxide for the last 5 months.

Dealing both private renting when the economy was good and with landlords on the RAS scheme I've discovered that yes there is money hungry landlords out there who couldn't give a damn about the welfare of they're tenants provided they get their money at the end f the month but I don't tar them with the same brush. For you landlords who got stung with bad tenants I feel sorry for you but that could also have happened with tenants who don't receive benefits. It's luck of the draw at the end of the day so please don't bundle every tenant in with the bad apples you've dealt with.

quietsailor

DamoKen wrote: »

As to having someone in Ireland manage the place, yeah I know, I've a few friends plus family who have said they will act as points of contact as well as carry out periodic inspections.

If you aren't going to be around to look after the place yourself why not contract with one of your friends or family to do it. They might be glad of the money and you'll know that they will be more inclined to look after the place than a "management agency" :mad: (I really don't like these people but that's not relevant to here)