Question about Lease & Re-Negotiating Exisiting Rent

ixoy

Currently living in a property that had a 1-year lease that expired May 2008. Then, as far as I'm aware, I moved onto a Part 4 Tenancy which pretty much gives me the same rights as if I had had a continued lease, without the hassle of having had to sign a piece of paper - I can't think of any advantage of having looked to secure a lease.

Now I'm looking to re-negotiate our rent here as we're paying far more than the current rental prices in the area. My question: Would I have to commit myself to a full year's lease at this new rent (if asked) or can I continue to avail of a Part 4 Tenancy at a new lower rate (assuming I'm granted a reduced rent)?

Ms Firefly

Ixoy,
I would imagine if the landlord agrees to new rent he/she will want the security of getting a signed contract. Certainly worth it if you can negoitate a lower rent and by all accounts he/she will not let good tenants go even if it means a drop of 200 - 300 euro a month.

Xiney

You area allowed a rent review once every 12 months, whether you are under part 4 or not.

You do not need to sign a new contract. In fact, don't do this. If your situation changes you'll want to be able to move out with minimum notice without being on the hook for the rest of whatever contract you signed.

shoegirl

I'm in a similar situation. My original lease expired in May 2008. Last week my landlady slipped a new lease under the door, backdated to May 2008!! :rolleyes:

As far as I know I think part 4 tenancies have to be confirmed in writing, not sure. Will wait it out and see what happens as I may want to leave at the end of the lease anyway.

dandelion

My understanding is that if you lease a property for one year at the end of the year you are entitled to a new lease for any period between 6 months and 4 years, but the landlord is entitled to know what length you want it for and he is within his rights to get you to sign a lease. If he elects not to give you a new lease the terms of the old lease are still valid with the exception of the date and rent amount. If you refuse to sign a lease and won't indicate how long you intend to stay he is entitled to serve notice to quit.

kazzer

In a similar position myself, hoping someone can shed some more light. 6th month lease is up and I’m now looking for rent reduction. Should I be expected to sign a new lease for the new rent amount, or should I press for Part 4 Tenancy with the new reduced rent amount? Cheers.

bugler

There are advantages for tenants in fixed term leases. It basically means that you can't be turfed out for any reason during the fixed term. There are grounds under which a LL can serve notice for a tenant to leave a dwelling if they are under Part 4. These grounds include wanting to sell, wanting the dwelling for a relative, intending to carry out substantial renovation etc.

If you sign the lease you can rest easy you can avoid being given notice to quit. Whether you think this is worth the hassle or not is up to you. At the moment, I'm quite happy to have a fixed term lease in place. I don't want my LL to decide in the morning he wants the house for his daughter and I'm out with 5 weeks notice.

You can't be compelled to sign a new lease when covered by Part 4, but the LL may want you to. The tricky and or messy part arises when you refuse and they're not happy with this and think they're entitled to force you to. I'm also unsure of who or when market rent is decided upon. So if you decide after your lease is up that you want to stay on under Part 4 but want a reduction to the current market rent, well, it's a minefield.

In short Ixoy, I believe you are entitled to a reduction to market level rent without having to sign a lease, but good luck convincing your LL that. I also wouldn't particularly want to have to rely on the PRTB to settle it, as they're notoriously slow. You're probably better off trying to thrash it out with the LL, maybe you can sign a lease but work a break clause into it?

Xiney

Simple though bugler - if you don't want to sign a new lease for the lower rent, just tell the LL "Consider this my notice, I'll be out in X days" (where X is the minimum notice you have to give)

That'll probably get you the rent reduction you want, especially if you've been a good tenant.

As for turfing you out because they want to sell - actually although the Part 4 tenancy doesn't cover this, you're covered in some other act for it: the landlord must sell with the provision that the tenancy remains.

Victor

kazzer wrote: »

Should I be expected to sign a new lease for the new rent amount

You might be. However, you can simply opt to stay on a month by month basis (subject to the sliding scale of notice required).

If the landlord pushes for another 6 months, push back for a lower rent again, but not too hard or you might have to go through with your threat of moving.. Arm yourself with current rents. One weak point is that you have only been there 6 months, strictly speaking rent reviews are after a year.

antoinolachtnai

It is news to me that a Part 4 tenancy has to be confirmed in writing in any way. But maybe I am wrong.

The_Conductor

Xiney wrote: »

As for turfing you out because they want to sell - actually although the Part 4 tenancy doesn't cover this, you're covered in some other act for it: the landlord must sell with the provision that the tenancy remains.

This is only with commercial lettings- not residential. In a residential letting the intention to sell the property is a justifiable reason for serving notice, under the 2006 Residential Tenancies Act.

ixoy

OP here. I got a reduction of 12% a couple of months ago, which was in line with rent reductions at the time. As I was still unclear about the lease issue I signed a new 12-month lease, something I'm not entirely happy about in retrospect as rents have fallen further since (as with Daft's report yesterday).

Nonetheless I'm stuck with it now - it's somewhat frustrating to keep hearing the "good news" about falling ECB rates but not getting the benefit of it due to lease agreements. Obviously re-negotiating rents on a monthly basis in line with ECB changes can't work (hence rent negotiation on a 12-month period) but I reckon I should have had more of a brass neck on this one. Lesson learnt is to be more willing to play hardball.

The_Conductor

ixoy wrote: »

Obviously re-negotiating rents on a monthly basis in line with ECB changes can't work (hence rent negotiation on a 12-month period) but I reckon I should have had more of a brass neck on this one. Lesson learnt is to be more willing to play hardball.

I keep coming across comments akin to this one both on this forum and elsewhere. I had a colleague in work bitching at me yesterday about about how ICS want to charge him 22k to get out of a 5 year fixed rate, and go onto a fully variable rate (he fixed about 18 months ago at 4.8%).

Why do people in general have it in their minds that financial institutions borrow money at ECB rates for relending to mortgage applicants? They don't. They borrow money on international markets at fixed rates- depending on the length of time they wish to borrow for. It has only a slight relationship, rather than a direct correlation, with ECB overnight rates.

A fall in ECB rates is great news for those with tracker products- but it makes absolutely no business sense for a financial institution to mirror the fall for other customers. It has only happened in an Irish context, because the government have the financial institutions over a barrel- no other reason.

A fall in ECB base rates- should have no bearing whatsoever on borrowing costs for property investors, none. In fact- the costs associated with a property investor should have only marginal bearing on what it costs to rent property- supply and demand should be the determining factors. It makes far more sense to have a tenant in a property at less than your outgoings- than to not have a tenant there at all. We are currently in that position- vast supplies of rental properties- and rents that have not factored this increased supply into the equation.

Interesting times.....

antoinolachtnai

ixoy wrote: »

Nonetheless I'm stuck with it now - it's somewhat frustrating to keep hearing the "good news" about falling ECB rates but not getting the benefit of it due to lease agreements. Obviously re-negotiating rents on a monthly basis in line with ECB changes can't work (hence rent negotiation on a 12-month period) but I reckon I should have had more of a brass neck on this one. Lesson learnt is to be more willing to play hardball.

Hardball is not always the game it is made out to be.

If you have a good place and a reasonable landlord, it doesn't necessarily pay to go after every last penny.

You don't have a full view on the costs of being a landlord. It's not just a matter of ECB rates. For instance, tax went up for landlords (particularly newer landlords who are more leveraged) in the budget, as a result of the reduction in mortgage interest relief and the 200 euro levy on every house. Added to that, BER certs are required. Some landlords have fixed interest rates, so that's another cost to carry. Many landlords' rental operations are loss-making.

But it is the rental market that determines rents, not the ECB. In some areas, rents have plummeted. In others (where there is good demand), they have dropped, but then found a floor. That's my experience anyway.

ixoy

Fair point about the market dictating prices. I think the frustration comes from the point about being locked in for a year - prices have fallen for similiar appartments by about 50e a month than what I'm currently paying and I'd like to avail of it (and yes, I'm sure landlords would have liked to avail of increased prices in "the good times").

As to the landlord being a good landlord - never met them, only spoken a couple of times on the phone. For all they know I could have destroyed the place (I haven't).

The_Conductor

ixoy wrote: »

Fair point about the market dictating prices. I think the frustration comes from the point about being locked in for a year - prices have fallen for similiar appartments by about 50e a month than what I'm currently paying and I'd like to avail of it (and yes, I'm sure landlords would have liked to avail of increased prices in "the good times").

As to the landlord being a good landlord - never met them, only spoken a couple of times on the phone. For all they know I could have destroyed the place (I haven't).

You are 'entitled' to an annual rent review. This is an entitlement. You can request a review sooner than this- and if you backed it up by inviting the landlord over for a cup of tea- and to show him/her how well you were keeping their property- I can't see why they wouldn't agree. Print out pertinent examples of the rent for similar properties in the area- on which to base your request.

Most landlords are only too happy to offer a reasonable deduction to someone they are satisfied are taking good care of their property.

antoinolachtnai

Mind you, he might ask to lock in for a further year in return.

He should try to avoid the situation where you keep coming back again and again and again.

He sounds like a good landlord to me.

Esmeralda34

Hi

My partner and I have been living in a one bed apartment for the past 3.5 years.

I've recently asked my landlord to review our rent with a view to reducing it by almost 20% (I chanced starting high!), he came back with an offer of 6%, I asked that we compromise at 10%, and he has come back with 7%...

In addition I approached him last Christmas about having the living room and bathroom repainted (it hasn't been painted since we moved in) and asking if we could get new sofas. The sofas weren't in the best nick on moving in and have since become very threadbare due to inevitable wear and tear. He didn't seem to have a problem with this at the time. I asked that we wait for the weather to improve and left it lie.

I raised this with him also when asking about the rent review. Initially he ignored my request and when I asked that he address this his response was that he would have to come around and view the paintwork and sofa himself, that he did not think the apartment should be due a paint job.

I would have thought it standard that apartments should get a paintjob after 2 years or so? We're here almost four years and have been excellent tenants. Am I being unreasonable...?

The_Conductor

You're not being unreasonable no.
It is normal to repaint an apartment every 4-5 years (not 2) though.

To be perfectly honest- you haven't given us any information on which we can advise re: rent. Where is it- and what are the conditions of the apartment?

3 years ago was almost the peak of the market- if you are only being offered 6-7% reduction on the rent you were at 3 years ago- I'd be hopping onto DAFT to confirm what the going rate is for the area- and if its significantly lower- which I'd be very surprised if it isn't- bringing examples from DAFT to the attention of the landlord and stating that you will move unless he/she is willing to negotiate in a reasonable manner with you.

Rents have fallen significantly in the past 3 years- unless you got a remarkable deal to begin with- I'd be looking for a hell of a lot more than 7% discount.......

Esmeralda34

Hi Smccarick

We're renting in Ranelagh over a retail premises and yes, paying the same rent since July 2005. It's a one bed apartment (not too pokey, in fairness), with living room cum kitchen in an old building...

antoinolachtnai

It just depends, if the rent is really decent to begin with, it might be an ok reduction. He hasn't been jacking it up in the intervening years, so maybe its not too bad. In my experience, rents went up in the Ranelagh area by around 15 or 20 percent between 2004 and 2007, so if this leaves you back at a 2004 price, you might have an ok deal overall.

Some landlords just couldn't be bothered fussing with painting and all the rest of it while there are tenants in. It's the old-style. Remember, it's not just the cost for him, it's also the awkwardness of arranging all the work while you are still in situ.

You just have to figure out whether you are happy with that, and how you are actually going to get the necessary renovations done.

You might be better to tell him that you'll get a new sofa (value 600 euros say) if he'll make it the 10 percent and give you a lease for two years. That might suit him, you just have to figure out what his 'style' is and work around that.

Of course, if you can't work with his style, you might just have to move somewhere else.