changing rent amount on lease for SW - common?

Emerald Lass

Hello all,

not sure if any one on here can help me out. I am renting my house out while i am working abroad. I have provisionally let the house - holding deposit paid. However, the tenant is in receipt of SW rent allowance. I have no problem with this for the right tenant. She has good references and everything seems to check out. But now there is an issue.....

the rent is €1100 pcm, but she has asked that I put €1200 on the lease. This way SW will give her 90% of €1200 so she only has to come up with €20 instead of €110. Now my initial reaction is, no way. Not my problem. But then a friend pointed out that the less money she needs to find the less chance the rent will be short in any given month. From a selfish business point of view I see where they are coming from, but from a personal/moral point of view I am very uncomfortable with it. I am also afraid of getting caught, as I am the sort of person that would happen to.

I'm fairly certain it would be illegal and considered fraud? or perhaps there is a way around it - give her a 'lease' with the higher amount, and then with her consent cancel that lease and issue a new one with the correct amount. That way it is her resposibility to inform SW not mine? I certainly do not want a lease with the higher amount to stay in place, as should there be any issue with PRTB then I would probably be liable.

I am actually a bit miffed that I was asked, and the attitude was 'well whats the problem, everyone does it. its in your best interests too'. Up til that point I was quite happy with this choice of tenant. Now I am having doubts. I get the impression that if I say no then they will no longer want the house, and I will have to arrange viewings etc all over again, which would be particularly annoying as I have turned people away in favour of her.

Has anyone else had experience of being asked to do this? what was the reaction if you said no? If anyone has done it and doesn't want to say on forum can you PM me? Just want to get some opinions/experiences where people did it or refused to do it.

thanks in advance for any opinions/advice.

SanNJay

I wouldn't go ahead with it but thats my opinion.

it could cause more hassle than its worth.

Sandra

seahorse

I'm annoyed to read this to be honest OP. She sounds like the sort of cheeky grasping wagon who gives all single mothers a bad name. I was a single mother on benefits myself once upon a time and I'd never have even thought of asking a landlord to do something like this; you'd have been lucky enough to get a landlord to accept EHB in the first place, cause most wouldnt, believe me.

I have heard of single mothers asking the landlord to let on the rent was LESS than the actual amount, because the EHB would not give them rent allowance on an apt over 1000 if they'd one child, so they'd ask the landlord to pretend a 1200 apt was actually 1000 and they'd struggle their arses off to come up with the 50 extra for the landlord themselves each week, but what you're talking about is a totally different ballgame, obviously.

If I were you I'd tell her you wouldnt be interested in putting yourself in a compromised legal position by defrauding the state and she was welcome to go looking for another landlord who would.

Stories like this annoy me so much you wouldnt believe! Plenty of fodder here to reinforce the perception of meal-ticket mothers :mad:

The_Conductor

Emerald Lass- you are aware that someone is just as likely to point out to the tenant that they are legally obliged to withhold 20% of the gross rent and forward it to the Revenue Commissioners? (You are obliged to do an annual tax return and register the tenancy with the PRTB, irrespective of whether you are resident or not).

Personally- I'd not put a different amount on the form for the tenant- you have to register the tenancy and the rent chargeable anyhow- so its a simple waiting game for the paperwork to catch up. Its only a matter of time before the Revenue Commissioners, the DSFA and the PRTB link up their databases (they are already delibertly using commonalities, even if there is no immediate plan to do so).

S.

Victor

You would be facilitating fraud. Fraud gets prison time.

Did you say previously that you work abroad as an estate agent? Estate agents with fraud convictions don't get sympathy and don't get work.

Reconciling your rental income with the amount that Social Welfare say they paid you will be an issue.

As you are living abroad, you need to talk to the Revenue - otherwise the tenant will be required to withhold a portion (20%) of the rent.

And finally, do you really want a tenant who first action is to propose fraud? Would you really trust that person with your property?

Emerald Lass

thanks for all the replies.

As far as the 'fraud' goes - yes this was my main concern which I mentioned in the original post. I also have serious personal objections to it. I am also quite concerned that I have recently found out that it appears to be common practice! That was the reason for originally posting - I am finding that most SW tenants will ask this, and so far most of my enquiries have been from SW recipients.

When I told another LL that I was saying no, he thought I was mad! he said that I should get off my high horse, its business, if a 'little white lie' (his words) means that I get my rent on time and in full every month then I need to stop being so honest!

As for tax implications - that is all sorted. When I say I 'live' abroad, that merely means that I spend so much of my time away that it no longer makes sense for me to leave the house sitting there - I may as well be renting it, and stay in the family home when I do visit home. (In summer I am abroad primarily, but in winter I am mostly in Ireland). However, I am still legally a resident of the state, and whilst my business is based in Turkey, we have an Irish office where we pay tax, fees, rates etc. i have my accountant dealing with it all for me and have been advised where I stand by the revenue. So everything else I do is above board and honest, so its not my usual behaviour to aid and abet fraud!

I was really asking if people out there know if it is common. As I originally said I had practically made my mind up, but I was curious to know if it is common practice? have other LL's been asked this?

I have since told her that while I appreciate that she may have trouble getting the balance of the rent, really that is not my business. How she finds her rent is not my business. I have told her I am happy to facilitate her in any legal way by filling in forms for SW, but that I can only tell the truth on them. If she feels she will have a problem making up the balance of the rent then she needs to let me know and I will rent elsewhere. I told her this last night, and she is to contat me today and say yes or no. If it is no I will be quite pi$$ed off cos I hav turned away numerous other people in favour of her. She should have been honest about what she wanted from the get go and I could have saved myself some wasted time.

On a personal front, I am like Seahorse and find it annoying that someone is lucky enough to get 90% from SW even though they have a part time job, and get plenty of other benefits (like medical card etc) and still this is not enough! I was off work sick for 6 months a while back (before I was self employed), and really struggled, and in spite of being told I could apply for this that and the other, I got nothing, and had to struggle to pay my mortgage with no help. if someone had even given me 10% towards it I would have snapped their hand off and wouldn't have been cheeky enough to ask for more!

but that is the way of life in Ireland - our SW system is a joke! but that is a debate for another day! lol

astrofool

At least you can see why some landlords don't accept rent allowance...

The_Conductor

I think you're making the right call- well done for standing by the principle of honesty. It is ridiculous that people expect rules to be bent like this. As you said- reform of social welfare entitlements is for another day- it is something that does need to be debated in a rational manner though........

Emerald Lass

well told her the score - i.e I'll happily fill out any forms, give any info to SW but I won't lie to them. I even pointed out that by saying I get an additional €1200 per year than I am actually receiving this means that there is potentially an additional €1200 I havce to pay tax on when I never got the money! If revenue checked with PRTB they would wonder why I pay tax on €1100 instead of €1200. I know that the chance of this happening is minimal, but it would be just my luck!

The responsei got was well you are entitled to get x amount rent each year before tax! I couldn't believe that this person knew what tax I should pay etc! Got quite arsey about it actually - was of the attitude, "well, there are ways out of the tax, that up to you". not happy with fiddling the SW, also wants me to lie to the taxman to cover her fraud!

so now looking for a new tenant! again! At the moment, I only seem to get SW enquiries, and true to form most of them have asked if I will change the lease amount! those who don't ask, usually don't have one mth dep and one mth rent in advance. Its really disappointing as the rent is less than similar houses in the area - at least €100 - €200 cheaper than most. I am just getting enough to cover rent and expenses, and I am happy with that, not greedy about it at all. Even at that I had someone offer me €900 per month - for a 3 bed semi-d in immaculate condition! cheeky sods!

Looks like I'll be covering the next few months mortgage myself. but in the current rental market, I can understand why someone would be tempted to agree to such an offer, and its a shame.

Emerald Lass

BTW, in thinking about all this, a question did occur to me.

Consider the following scenario:

You make a lease with a tenant, and then something happens that they are no longer able to meet the rent payments listed on the lease. They are a good tenant and you don't want to loose them, so you agree to a rent reduction - say €50 or whatever. What happens in this situation regarding registering the tenancy - is it a simple amendment to the lease, or do you need to draw up a new one? Do you have to inform the PRTB and if you do, do you have to re-register the tenancy, even though it is the same tenant?

I just wonder, because a few people told me that I should give her a lease to bring to SW, and then when thats sorted, issue a new lease with a smaller amount. then its her responsibility to tell SW that the rent has been lowered. IMO that is still taking part int eh fraud, so regardless, I won't be doing it.

But it did make me wonder about the issue of changing the lease? In the current market it is conceivable that in the future I may need to lower the rent (and make a loss) rather than have an empty property (which would be an even bigger loss! As my gran used to say, half of someting is better than the whole of nothing!). A LL friend told me that he recently lost a tenant because he wouldn't lower the rent by €100 p/m. They ended the tenancy and he went looking for a new tenant. 2 mths on he still had no one and had to lower the rent anyway - he now wishes he had done it for the original tenant as he was a better tenant than the current one.

So what would happen if you agreed to lower the rent for a current tenant?
new lease? new PRTB registration? or just make an amendment to current lease, both sign it and tell no one?

Just something I have been wondering about since the whole changing the rent on the lease issue occurred! i just want to know for my own curiosity really!