is it hard to get out of a lease?

murphaph

delllat wrote: »

i would suggest to the op to work with the landlord if possible but honestly if you decided right now to stop paying rent and continue trading there theres very little he can do about it in the short term

Stopping paying rent will be a 'concrete' breach of lease and the landlord will have 'little trouble' getting an order for possession. Little trouble means a year and a bit to get the OP out and a significant loss of income but he'll secure his judgement for the debt at the same time, for what it's worth.

If you can't maintain your business it's not the landlord's fault and at least just walk away and free the unit so the landlord has a chance of his business not folding because of yours. This attitude of "trade on in the landlord's property but stop paying him" is nothing short of theft. I'm not saying that is what you're suggesting dellat (I hope it's not).

Darragh29

murphaph wrote: »

If you were a landlord you'd seek personal guarantees too.

I wouldn't ever be a landlord because I don't believe that property is a commodity as you have suggested. Property is to my mind a natural resource that people should not harvest up like there is going to be a famine. I have one property that I live in, that is the only property that I need to be able to exist on earth so I only have one property. I could if I wanted, buy the property next door, and another one down the road, etc, but I believe in only consuming what I need to get by and leaving what I don't actually need, for other people to use. I'm not tight or stingy, just acquiring assets just for the sake of acquiring them, it just doesn't do anything for me, to me, that is the most pathethic thing any person can do.

I don't want to get dragged off topic here as the thread isn't about my well known views on the forum with regard to property speculators.

OP, my best advice is do not entertain anyone who is looking for a personal guarantee. Look at what has happened in the last few months, I know a guy who had a signage business and he recently had to pull down the shutters. He started around 2 years ago all guns blazing, things were going well for him, then a few months ago, the problems with the economy fed through to his business and his sales just died. He went from running a nice brisk profitable business, to running a business that had no sales, literally over the space of a weekend.

This is exclusively down to what is going on in the economy now, a complete lack of consumer confidence has led to people just not spending money.

Now, if you were in his shoes, would you want to be in a situation whereby you are now personally responsible for the fact that because you signed a ten year lease agreement that you are only a year and a half into, that because the business has failed, through absolutely no fault of your own, that you are now personally resonsible for rent payments on that property that you have decided to vacate on a voluntary basis, (hand back the keys to the landlord), for the next 8.5 years???

Do you think that this guy should be expected to carry the economic woes of this country on his back for the next 10 years??? When it doesn't work out OP, people lose money, this is what happens in business. Unfortunately most landlords know nothing about running a business, they are property speculators who the banks threw money at for the last few years and we all know where that has gotten us now.

justwantajob!

i'm not sure if this is any use, but Jones Lang LaSalle manage Stephens Green. They're not the nicest bunch and so might be inclined to enforce the personal guarantee.

I know it's expenditure but the best thing to do would be get legal advice, spending that money now is better than being dragged through the courts

murphaph

Darragh29 wrote: »

I wouldn't ever be a landlord because I don't believe that property is a commodity as you have suggested. Property is to my mind a natural resource

Land is a natural resource, developed land (commonly caled property) is a commodity Darragh. If everyone behaved as you wish, the world would be comprised of single storey dwellings and small retail outlets (which the owner would live above) and not much else. Who would develop shopping centres? Nobody would have enough land amassed to build a bloody shopping centre on if we followed your self-sufficient model because they wouldn't be allowed to buy it! A retailer doesn't need 150 retail units but he wants to be amongst 150 retailers! Who provides the other 149 if nobody is prepared to 'speculate' on the land and build that development? It's not the idylic solution you desire. Developers are needed in a modern economy and they exist EVERYWHERE (except maybe North Korea).

Darragh29

murphaph wrote: »

Land is a natural resource, developed land (commonly caled property) is a commodity Darragh. If everyone behaved as you wish, the world would be comprised of single storey dwellings and small retail outlets (which the owner would live above) and not much else. Who would develop shopping centres? Nobody would have enough land amassed to build a bloody shopping centre on if we followed your self-sufficient model because they wouldn't be allowed to buy it! A retailer doesn't need 150 retail units but he wants to be amongst 150 retailers! Who provides the other 149 if nobody is prepared to 'speculate' on the land and build that development? It's not the idylic solution you desire. Developers are needed in a modern economy and they exist EVERYWHERE (except maybe North Korea).

If everyone behaved as I believe, we would have an economy with modest, stable and consistent long term growth, where there is a more even balance between what is available and what is sought, and basically a state of equilibrium between market forces by virtue of people behaving in a restrained and broadly considered manner.

If everyone behaved as you propose, we'd be living in a land where the price of property spiralled exponentially, year upon year, because investing in property requires no skill or determination and in a credit rich environment, people with no business skill or ability, will gravite towards easy credit. Easy credit has been the order of the day in this jurisdiction in recent years, hence why we have a whole load of property speculators who are unable to even pay the interest on their principal borrowings now, and the government are bailing out with open ended guarantees and a couple of billion in cash.

You have tried to muddy the conversational waters here by suggesting that I am of the view that people should not be allowed develop land. I stated no such belief. The parasite property speculators that I refer to are the people hoovering up residential and commercial property who think there is a queue of folks like myself waiting to rent those properties!!! Guess what, there is no queue!

Early last year (14 months ago at least), I met three separate 07/08 BMW driving, men in suits who had advertised commercial properties for rent in south Dublin.

They sought the usual "FRI lease, personal guarantee required, bank letter required, blah blah blah"... I visited the three properties associated with each of the three men I met last year, AND I VISITED THE PREMISES AGAIN, TWICE within the last week. Guess what??? They are all empty!!! I rang the agents for all 3 properties, who advised me that they have an interested client who they are "working with" with a view to signing an agreement.

Now forgive me for speculating, but I got out of my car and looked at the locks securing these 3 premises and none of them looked like they had been opened in the last year, with grass growing around the shutters and the whole estate that they are located in, looking like something from the wild west, with tumbleweed blowing down the thoughrefare, and vacant premises left right and centre, not even a security man in sight...

If you think you're going to try to rent a property to me, on the basis of artificially inflated 2007 rents, and on the basis of absolute bullsh*t, then grand, but it will be vacant because I won't do business with you, and neither will anyone else at the moment. It's long due past time for people renting property and those who represent them, to take cognisance of the fact that things have not just changed for now, but have changed for ever.

murphaph

Your arguments are very confused Darragh. You are in favour of property development but against amassing the property to develop. Property won't develop itself-some entity must secure the land to develop and this will often require properties to be 'hoovered up'. Just for the record-one of my properties is leveraged and only modestly. I am not a credit fueled landlord of the Celtic Tiger but you correctly highlight that EASY CREDIT has enabled many people to buy property (I bet a lot of them wish they'd never bothered now) so who provided the easy credit? The landlords?

You suggest that the price of property should not escalate and should reach "equilibrium" (with what?). It isn't escalating now-it's de-escalating! In general however prices of all commodities rise over time. It's called inflation. If you can find a way to keep all costs stable for all time, property will be no different so long as population growth stabilises too.

I probably know exactly why those units are empty with no urgency to let....the landlord probably owns the units outright and has no mortgage on them-we're not all leveraged to the last and desperate to let. There are other reasons (possible developer involvement) for properties sitting idle. If there are no takers, there are no takers.

I have a queue for one of mine though.....location location location is even more important in a recession I am discovering!

Quick question....if your business is in a position to expand and you need a premises but you can't get a mortgage for one, what do you do?

Lplated

MrPillowTalk wrote: »

I wasnt offering legal advice only my own personal experience, I have quite a lot of commercial property, on some of it I have personal guarantees and some of it I don't. The main reason for the guarantee is to make a tenant think twice before renaging on the lease terms. If someone walked on a lease and after conducting searches they had assetts sure I would try and recover the debt, however if they had no personal wealth why would I go about spending extortionate ammounts on legal fees (high court costs circa 15k per day before I get the solicitors bill) to secure a judgement that might at some point in the future become exerciseable, it makes no sense.

People walk on leases all the time, the upshot is the landlord gets stung thats just the nature of the business unfortunately, legally pursuing potless people on personal guarantees is foolish. Even in cases where you secure judgement on say someones private residence its very hard to ever execute as the bank allways have priority charge.

The specific bit that imo is both dangerous and wrong is that in your original post you specifically said "Tbh if the business really is a non runner and you liquidate then it is unlikely the landlord will act on the personal guarantee unless you have large personal wealth as truth be told it is hard to get a court to bring a judgement against someone personally that arises from genuine commercial mishap."

My difficulty is more with the second part of the sentence than the first - it is not hard at all to get a court to bring a judgment (as you put it) - once the rent is owed the court will give judgment.

I appreciate that you, as a landlord may or may not pursue debts, but that is not necessarily the case for other landlords, and besides, with respect, your presentation of the legal position is wholly wrong.

In any event, i'm sure the op is wise enough to get legal advice before doing anything.

murphaph

It's not technically hard to get a judgement for a civil bill Lplated, but once it's over ~€6350.00 it falls under the jurisdiction of the Circuit Court. It's not like going to the small claims court-it costs money and you really need a solicitor and barrister in there. So you'll get your judgement against a potless person alright but it will cost you your not insignifcant legal fees to get that piece of paper that says johnny defaulter legally owes you x monies and possibly owes you the legal fees you owe your legal team. Great. You're now down x monies plus the legal fees, but you have your piece of paper. That's the reality-some large landlords with very deep pockets and/or their own legal teams may opt to get judgements every time, most small landlords or family operations will just lose the money and move on.

MrPillowTalk

Lplated wrote: »

The specific bit that imo is both dangerous and wrong is that in your original post you specifically said "Tbh if the business really is a non runner and you liquidate then it is unlikely the landlord will act on the personal guarantee unless you have large personal wealth as truth be told it is hard to get a court to bring a judgement against someone personally that arises from genuine commercial mishap."

My difficulty is more with the second part of the sentence than the first - it is not hard at all to get a court to bring a judgment (as you put it) - once the rent is owed the court will give judgment.

I appreciate that you, as a landlord may or may not pursue debts, but that is not necessarily the case for other landlords, and besides, with respect, your presentation of the legal position is wholly wrong.

In any event, i'm sure the op is wise enough to get legal advice before doing anything.

Please explain how it is wholly wrong.

With regards to judgements yes they can be achieved however they are only worth anything if the party has assets. Generally landlords wont pursue an avenue that will only end up costing them money.

Lplated

MrPillowTalk wrote: »

Please explain how it is wholly wrong.

No problem, i obviously haven't already:cool: NOTE - the bit i'm saying is 'wholly wrong' is your presentation of the legal position; whether or not a landlord would pursue the matter is a different, situation dependent thing. Anyway ...

In your earlier post on the thread you said - "truth be told it is hard to get a court to bring a judgement against someone personally that arises from genuine commercial mishap".

It is very easy to get a court to give judgment - a lease is a simple contract, of which non-payment of rent is a breach of contract. The creditor/landlord simply issues a writ for summary judgment. The debtor/tenant may, if he has grounds, enter a defence to that motion for summary judgment.

In order to enter a defence, you must obviously have grounds for a defence of which 'genuine [or otherwise] commercial mishap' is not one.

Even where you can come up with a defence, the court may still find that the defence does not meet the claim and give judgment anyway (after a hearing).

1Not sure if that explains it clearly?

Should also say that the legal cost of getting a judgment is much lesser (relatively speaking) than a usual court case - mainly because the Rules of Court provide for this 'summary' procedure, and it is only in a rare number of cases where A) the debtor enters a defence AND the court determines that the defence is 'stateable' (meaning it might have some prospect of defence); that the matter would proceed to hearing at all.

Darragh29

See all this OP??? This is what you could be exposing yourself to if you give a personal guarantee!

DubTony

murphaph wrote:

once it's over ~€6350.00 it falls under the jurisdiction of the Circuit Court. It's not like going to the small claims court-it costs money and you really need a solicitor and barrister in there. So you'll get your judgement against a potless person alright but it will cost you your not insignifcant legal fees to get that piece of paper that says johnny defaulter legally owes you x monies

Lplated wrote:

Should also say that the legal cost of getting a judgment is much lesser (relatively speaking) than a usual court case - mainly because the Rules of Court provide for this 'summary' procedure, and it is only in a rare number of cases where A) the debtor enters a defence AND the court determines that the defence is 'stateable' (meaning it might have some prospect of defence); that the matter would proceed to hearing at all.

So what are we looking at here lads? If a defaulting tenant breaks the lease or stops paying rent, what's it going to cost a landlord if the potless person (I like that) doesn't defend himself in court or for that matter, if he does? Assuming of course that's it above the €6350 murphaph mentioned.

delllat

DubTony wrote: »

So what are we looking at here lads? If a defaulting tenant breaks the lease or stops paying rent, what's it going to cost a landlord if the potless person (I like that) doesn't defend himself in court or for that matter, if he does? Assuming of course that's it above the €6350 murphaph mentioned.

legal proceedings are never enjoyable,theyre costly in every sense of the word-stress worrying about it,time and energy that would be better spent on other things,taking into account how many meetings and phone calls and court dates and solicitors fees,the list drags on and on

not every landlord will want to do all this for a piece of paper saying that some potless pauper owes him money..........that doesnt exist now and may never exist!

So really in this case it may be unfair but often the landlord will take a loss and move on

murphaph

Hi Tony,
I'm down €7k (at last count) so far in legal costs alone against just one single overholding tenant (ie, his lease actually expired end 09/07 and he's still there trading away paying no rent to me nor rates to the council). You can only guess how many thousands in rent that is as well. Meanwhile owing to the nature of the property, I have to have full public liability in place on it as well.

Darragh29

murphaph wrote: »

Hi Tony,
I'm down €7k (at last count) so far in legal costs alone against just one single overholding tenant (ie, his lease actually expired end 09/07 and he's still there trading away paying no rent to me nor rates to the council). You can only guess how many thousands in rent that is as well. Meanwhile owing to the nature of the property, I have to have full public liability in place on it as well.

That's business my friend. In my business, if I find I'm losing money, I can immediately react to that and make whatever changes I might want to, in order to change the strategy. I can decide on a new strategy on Sunday night and that strategy can be put into action the following Monday morning.

In your business, if you sign a 5, 10, 15 or 20 year lease, then the success of your business is wedded to the success of your tenants business for the duration of your lease agreement. This is the business model that you have taken on and I wouldn't like to be in a situation whereby I would find myself losing substantial money, but in order to deal with that issue, I'd have to commit substantially more money in legal fees and I'd have to commit other resources such as my own time and effort into the matter.

I think the smart money in the last few years was going into indiginious innovative small businesses. I didn't fall for the property game because I knew full well that what was going on in this country simply was not sustainable. I don't feel a bit sorry for anyone who has issues now with investment properties. You make your bed and you lie in it.

murphaph

Darragh29 wrote: »

That's business my friend.

I know-I already said it was a business like any other. It has different pitfalls. I wasn't looking for sympathy. Tony asked a straight question about how significant the legal fees can be. I gave him a straight answer.

Darragh29 wrote: »

In my business, if I find I'm losing money, I can immediately react to that and make whatever changes I might want to, in order to change the strategy. I can decide on a new strategy on Sunday night and that strategy can be put into action the following Monday morning.

Good for you. Not sure what it has to do with getting out of a lease though.

Darragh29 wrote: »

In your business, if you sign a 5, 10, 15 or 20 year lease, then the success of your business is wedded to the success of your tenants business for the duration of your lease agreement.

Totally incorrect. It may be linked to the general business environment (like most businesses are!) but not to a specific tenant for the entire duration of the lease. A 25 year leaseholder whose businees runs aground early on will not drag me down for the remaining duration of the lease Daragh. I don't know where you're getting tour 'facts' from but it will take a year or two to get him out with an ejectment order (if he doesn't do the honourable thing and walk if he genuinely can't afford the rent), not 25 years! It will cost me monies to get im out but not for 25 years :rolleyes:

Darragh29 wrote: »

This is the business model that you have taken on and I wouldn't like to be in a situation whereby I would find myself losing substantial money, but in order to deal with that issue, I'd have to commit substantially more money in legal fees and I'd have to commit other resources such as my own time and effort into the matter.

Yes it's clearly a major downside you now seem to suddenly accept that the landlord faces! A while ago you were lambasting landlords for seeking personal guarantees on leases yet now you accept that landlords face significant risks that they have no control over. You want the best of both worlds for your business...the ability to react quickly and to be able to walk away from your landlord who has taken on significant risk in his business. Well, the landlord (having seen many many rogue tenants like mine) will now always seek a personal guarantee, even in recessionary times. Many have been burned by rogue tenants to such a degree they would rather leave premises empty than sign a lease without a personal guarantee.

Darragh29 wrote: »

I think the smart money in the last few years was going into indiginious innovative small businesses. I didn't fall for the property game because I knew full well that what was going on in this country simply was not sustainable. I don't feel a bit sorry for anyone who has issues now with investment properties. You make your bed and you lie in it.

...unless you're a rogue tenant with a limited company and no personal guarantee (what you advocate). I didn't "fall" for the property market. Our family has built up its property over many years of hard work in some very bad times (1980's in particular when my father, lord rest him, bought property against ALL the 'advice' of his accountant and solicitor. It was not seen as a 'sure thing' at all. It was seen as highly risky by 'the professionals' but my father was right and they were wrong). Our commercial property was and continues to be a long term investment that we have no mortgages on and we are continuing to develop it even now because we have confidence that it will be in demand at some point in the future. My father ran a succesful retail business until his death and originally he was a tenant, but he knew he was being a sap handing money over to a landlord when he was able to buy his own and that's where it all started. Recessions are great times to buy property and bad times to sell it.

Our man in Havana

murphaph wrote: »

Hi Tony,
I'm down €7k (at last count) so far in legal costs alone against just one single overholding tenant (ie, his lease actually expired end 09/07 and he's still there trading away paying no rent to me nor rates to the council). You can only guess how many thousands in rent that is as well. Meanwhile owing to the nature of the property, I have to have full public liability in place on it as well.

Can you not get possession?

Can you go in when he is not there and seize the property back?

Darragh29

murphaph wrote: »

Totally incorrect. It may be linked to the general business environment (like most businesses are!) but not to a specific tenant for the entire duration of the lease. A 25 year leaseholder whose businees runs aground early on will not drag me down for the remaining duration of the lease Daragh. I don't know where you're getting tour 'facts' from but it will take a year or two to get him out with an ejectment order (if he doesn't do the honourable thing and walk if he genuinely can't afford the rent), not 25 years! It will cost me monies to get im out but not for 25 years :rolleyes:

If you sign a lease with a tenant, regardless of whether you have a personal guarantee or not, you are tied to that tenant for the term of the lease. If the tenant defaults and you have to go to court to get him/her out, you are in the manure business. I take your point in that you are not necessarily tied to that tenant for 25 years, but between legal fees, loss of rent, and hassle, 1 to 2 years of litigation, you're out of pocket big time and a personal guarantee will not necessarily give you any relief whatsoever! It would take you probably another 5-10 years to claw back those losses from another client, who could end up taking you down the same road!

A tenant could drag a breach of a lease on for years. The point I'm making is that this is only being accepted now by property investors, that all of a sudden, there is a whole other side to their investment that their bank manager conveniently neglected to tell them!

murphaph wrote: »

Yes it's clearly a major downside you now seem to suddenly accept that the landlord faces! A while ago you were lambasting landlords for seeking personal guarantees on leases yet now you accept that landlords face significant risks that they have no control over. You want the best of both worlds for your business...the ability to react quickly and to be able to walk away from your landlord who has taken on significant risk in his business. Well, the landlord (having seen many many rogue tenants like mine) will now always seek a personal guarantee, even in recessionary times. Many have been burned by rogue tenants to such a degree they would rather leave premises empty than sign a lease without a personal guarantee.

They have every control over the significant risks. Don't become a property speculator and you will have no exposure to this significant risk.

It's a downside that would stop me having anything to do with property investment. Leaving a property empty = losing money. Having a personal guarantee from a tenant that is experiencing trading difficulties and has cashflow problems, both business and personal = in the manure business.

Having to pay legal fee's to have said tenant ejected by way of a court order, plus the associated loss of rent = in the manure business.

It might be sufferable in your own unique situation as from your post above, I undestand that you inherited property and you said that the properties involved are no longer mortgaged. If you have to take a hit of 10-20K on a tenant and you have a personal guarantee that isn't worth the paper it is written on by virtue of the financial status of the tenant, then it is going to take you a long time to claw back that 10-20K...

Anyone who bought investment properties, commercial or domestic in the last 5 years is in for a very rude awaking I would think... Again, I think if folks who want to invest, invest in themselves and an innovative idea, as opposed to what their bank manager might think is a "no-brainer" gamble on the property market, then I think we would all be a lot better off. We'd certainly have a more stable trading environment in Ireland now, and we'd have more affordable property, both commercial and domestic.

DubTony

murphaph wrote: »

Hi Tony,
I'm down €7k (at last count) so far in legal costs alone against just one single overholding tenant (ie, his lease actually expired end 09/07 and he's still there trading away paying no rent to me nor rates to the council). You can only guess how many thousands in rent that is as well. Meanwhile owing to the nature of the property, I have to have full public liability in place on it as well.

Ok, this is obviously one of the pitfalls of the property game, but I don't understand. Being someone who would regard himself as a good tenant, how on earth does a guy stay in a property he no longer has any right to be in? Can't you just throw him out? And by that I mean get a few fellahs to hoof the guy onto the street?

By the way, fair play to your old man. My dad was making a fortune in the late 70's and early 80's and didn't invest in anything. Like your father he was told not to touch property, so he let my mother look after it instead. :rolleyes:
At the time, 3 floors over basement Georgian houses were trading for figures in the mid 40 thousands. His repackaging business was making so much money he could have bought and paid for 2 a year and still supported the family.

murphaph

We still don't have an order for possession Bond/Tony, so we can't (legally) go in with a few lads and hoof him out, more's the pity. Even though he is overholding for over a year now, he is still legally a tenant until a judge of the circuit court or higher declares the tenancy to be at an end and any steps to seize the property back (which would be easy in practice) would constitute an illegal eviction and he'd sue and win. He knows all this-his solicitor is advising him to sit tight and take advantage of the law and the slow process. There was a legal complication which I can't disclose here which has allowed this particular case to drag on but it wouldn't be an uncommon occurence. Tony-good tenants are worth their weight in gold and any decent landlord knows it. If only good tenants could be matched to good landlords things would be heavenly. Maybe a website in that (maybetenants.com)! lol.

There are some small developments to level the playing field. The civil law Act 2008 now allows a tenant to waive any rights to a business equity in a commercial property. A business equity in a premises automatically exists once a tenant has been in unchallenged occupation of a premises for just 5 years (used to be three). That's why you used to see 2yr9m leases and now you see 4yr9m leases commonly advertised. It gives the landlord 3 months to serve a valid notice to quit if the tenant overholds at the end of the lease.

The new law allows the tenant to waive any business equity at all so landlords can feel comfortable giving (say) 25 year leases while knowing they won't lose control of their property (effectively) forever. This is positive for both parties as 5 year leases are really useless for a tenant who is investing significant capital in his premises and it was stopping many businesses from starting up at all. Unfortunately landlords are used to the law working against them and are understandably seceptical until this new provision is actually tested in court but I will be using it shortly on a property I wouldn't have given a long lease on previously as I have long term plans for that site but it has such good passing trade that a tenant is extremely keen to get in there for app. 20 years. He knows he'll make good money there in that time and I know I'll still be able to develop there eventually.#

Edit: Daragh you clearly would never invest in property because you see a tonne of difficulties with being a landlord. That's fine and is your choice but if you have cash (credit is pretty unavailable), now is the time to be looking at property. These things go in cycles-Tony is spot on, you coud buy property worth millions (even today!) for tens of thousands in 80's Ireland. Recessions are when smart people make money and accumulate wealth. Owning property is a PITA but I'd rather own it than not and ultimately, property will always escalate in value so long as the population keeps increasing. People who own a decent bit of land will rarely be poor, despite the difficulties.

Innovation is great and should be promoted. We can't export property. However, innovation doesn't put food in your belly. We need run of the mill businesses like food markets and they in turn need property to trade from. Leasing a premises provides flexibility to many businesses who need it. New businesses rarely want to tie significant capital up in property (and that amount will only increase as banks require larger and larger deposits to secure mortgage loans)-they need that cash to get them over the hump and get themselves established. Landlords do actually provide a service to these businesses believe it or not. When your business is established it's all well and good to moan about paying rent to the landlord but that's human nature I suppose.

Darragh29

murphaph wrote: »

Edit: Daragh you clearly would never invest in property because you see a tonne of difficulties with being a landlord. That's fine and is your choice but if you have cash (credit is pretty unavailable), now is the time to be looking at property. These things go in cycles-Tony is spot on, you coud buy property worth millions (even today!) for tens of thousands in 80's Ireland. Recessions are when smart people make money and accumulate wealth. Owning property is a PITA but I'd rather own it than not and ultimately, property will always escalate in value so long as the population keeps increasing. People who own a decent bit of land will rarely be poor, despite the difficulties.

Innovation is great and should be promoted. We can't export property. However, innovation doesn't put food in your belly. We need run of the mill businesses like food markets and they in turn need property to trade from. Leasing a premises provides flexibility to many businesses who need it. New businesses rarely want to tie significant capital up in property (and that amount will only increase as banks require larger and larger deposits to secure mortgage loans)-they need that cash to get them over the hump and get themselves established. Landlords do actually provide a service to these businesses believe it or not. When your business is established it's all well and good to moan about paying rent to the landlord but that's human nature I suppose.

I would invest in property, but only if I was going to use it myself, to live in or to trade in. I wouldn't dream of investing in a property with a view to renting it, firstly because of the legal and operational reasons I, (and also youself), have set out above, and also because I genuinely believe that it is an inherently selfish thing to do. In my view, houses are for living in and industrial units are for trading in, and the sooner we all get back to first principles in this country and start using things as they were designed to be used, instead of seeing them as some sort of get rick scheme or a retirement plan that some other lackie will be paying for, the sooner we will be living in an economy with modest and stable growth again.

Look at where we are now as an economy, for mainly one reason, an unnatural percentage of our national equity has been put into property and it has now been lost. Property investors in this country have created a properly bubble, and bubbles burst because that is what bubbles do, and now we will probably spend several generations getting back to stable economic growth.

Also, innovation puts food on many tables in this country. When we eventually do get back on our feet in this country, it will be thanks to the trojan work done by entrepreneurs and innovators, and not paper pushing property speculators who have landed us in this mess.

murphaph

I can see you're quite emotional about all this while the rest of us are more dispassionate but you are simply not being rational. Should a migrant worker (possibly bringing a vital skillset for a entrepreneurial project to proceed) be forced to 1) live in a hotel or B&B for 12 months or 2) buy an apartment or house and then sell it after 12 months? If the option to rent a normal apartment or house is not there, they are your remaining options. Not so good for that migrant worker.

For the record, Germany has app. 40% home ownership and 60% rental. They clearly have many millions more landlords, even per capita, than Ireland yet they didn't experience the 'bubble'. Why is that? You're attempting to oversimplify our problems by blaming ladlords for it all when other countries have far more renting going on and don't have the same problems.

I suspect it is because Germany (etc.) is a truly innovative country which exports goods the rest of the world wants. Ireland is not. It is not the fault of landlords that Ireland Inc. has failed to develop indigenous industry and export markets.

Darragh29

murphaph wrote: »

I can see you're quite emotional about all this while the rest of us are more dispassionate but you are simply not being rational. Should a migrant worker (possibly bringing a vital skillset for a entrepreneurial project to proceed) be forced to 1) live in a hotel or B&B for 12 months or 2) buy an apartment or house and then sell it after 12 months? If the option to rent a normal apartment or house is not there, they are your remaining options. Not so good for that migrant worker.

For the record, Germany has app. 40% home ownership and 60% rental. They clearly have many millions more landlords, even per capita, than Ireland yet they didn't experience the 'bubble'. Why is that? You're attempting to oversimplify our problems by blaming ladlords for it all when other countries have far more renting going on and don't have the same problems.

I suspect it is because Germany (etc.) is a truly innovative country which exports goods the rest of the world wants. Ireland is not. It is not the fault of landlords that Ireland Inc. has failed to develop indigenous industry and export markets.

I'm not emotional about the issue at all. I have an opinion on the matter which is based on a set of values that I believe in. Emotion doesn't come into it I'm afraid. It is the fault of property speculators that the country is in a state, I could have invested money in property and been part of the problem, I thought more of myself, I knew I was capable of much more. I could have been selfish and just bought a property or two and got a few loans and gone looking for some lackies to pay my mortgage for me. My own belief in "doing the right thing", led me somewhere else.

Lplated

DubTony wrote: »

So what are we looking at here lads? If a defaulting tenant breaks the lease or stops paying rent, what's it going to cost a landlord if the potless person (I like that) doesn't defend himself in court or for that matter, if he does? Assuming of course that's it above the €6350 murphaph mentioned.

Your choice isn't actually 'small claims court' versus 'circuit court' - its actually district court versus circuit court - choice of court depends on the rateable valuation of the property and the amount in dispute in the case.

My point about summary judgment proceedings being cheaper was a 'relative' one , that is, relative to the costs of say a hearing of similar length in a court of similar jurisdiction - the reason is that the rules of the court (both district and circuit) provide for certain maximium costs that can be charged in cases where summary judgment for a debt is being looked for.

murphaph

Darragh29 wrote: »

I'm not emotional about the issue at all. I have an opinion on the matter which is based on a set of values that I believe in. Emotion doesn't come into it I'm afraid. It is the fault of property speculators that the country is in a state, I could have invested money in property and been part of the problem, I thought more of myself, I knew I was capable of much more. I could have been selfish and just bought a property or two and got a few loans and gone looking for some lackies to pay my mortgage for me. My own belief in "doing the right thing", led me somewhere else.

But you accept Germany (for example) has much higher rates of landlord/tenant than home/business ownership and that they didn't experience a property bubble? Maybe the problem is that we don't have enough rentable property because of our voracious appetite for home ownership.

If we all rented, there would be much more rentable property available. It is the same in the UK and US Daragh.....home ownership is what breeds property bubbles. They don't happen in countries with a large rental market.

Darragh29

murphaph wrote: »

But you accept Germany (for example) has much higher rates of landlord/tenant than home/business ownership and that they didn't experience a property bubble? Maybe the problem is that we don't have enough rentable property because of our voracious appetite for home ownership.

If we all rented, there would be much more rentable property available. It is the same in the UK and US Daragh.....home ownership is what breeds property bubbles. They don't happen in countries with a large rental market.

So how come for many decades in this state, when people were able to afford their own homes but not investment properties, we didn't have rampant house inflation but all of a sudden in our generation, when people can get access to funds for second, third and fourth plus properties, we have a housing bubble which has burst and an associated economy in collapse???

You are suggesting that everyone should rent. Why should I spend my life working to pay for another persons asset??? Most people in this country just want stable employment, a safe society to live in and a house that they can live in peace in. It isn't that much to ask, we only get to be on this planet for 70-80 years if we are lucky, it isn't actually asking for much to be allowed live in a society where you can have somewhere to call your own and be allowed live in peace there. As for Germany, I can't speak for Germany as I've never lived there and haven't a clue what goes on over there.

murphaph

Darragh29 wrote: »

So how come for many decades in this state, when people were able to afford their own homes but not investment properties, we didn't have rampant house inflation but all of a sudden in our generation, when people can get access to funds for second, third and fourth plus properties, we have a housing bubble which has burst and an associated economy in collapse???

You've answered your own question. Easy credit has been the root cause of our downfall. 20 years ago credit was both difficult to obtain and when you did obtain it, you paid interest rates in double digits. You will find that in reality the property bubble has not been caused by a (very small) minority of people buying to let but by the easy availability of mortgage loans to just about everyone who wanted out of 'the folks house'. In the old days people lived at home much longer or went abroad and rented there. A bank would laugh at a 21 year old asking for a 6 times income 90%+ mortgage with one income on a shoebox. Not in the last decade though. A strong desire for home ownership (regardless of the total cost of ownership) coupled with easy access to credit and low interest rates fueled our housing boom....not a few buy to let landlords Daragh. I guarantee you that wherever you live, most of your neighbours own their own homes. You probably do too.

Darragh29 wrote: »

You are suggesting that everyone should rent.

No I'm not. I'm suggesting if the rental market was more developed, people could rent at more competitive rates.

Darragh29 wrote: »

Why should I spend my life working to pay for another persons asset???

You do know that mortgage interest is 'dead money' paid to a bank for the privilige of lending you money to buy your own home and anyway, until your mortage is redeemed, the bank actually owns the house (hence the term repossession and not possession). Rent is no different than mortgage interest Daragh. It's just a matter of how much rent/interest you pay. Irish people in general are almost oblivious to the fact that mortgage interest is dead money.

Darragh29 wrote: »

Most people in this country just want stable employment, a safe society to live in and a house that they can live in peace in.

Same as in most countries I'd say. People rent flats in Germany for their whole lives in peace and contentment. A German might say that as we are in this planet for such a short time, why commit to buying a property at all when you're dead you can't take it with you.

Darragh29 wrote: »

As for Germany, I can't speak for Germany as I've never lived there and haven't a clue what goes on over there.

I was just using it as and example (one I know well) as they have the same central bank, the same interest rates, a much higher rental sector and no property bubble. You are blaming landlords for all our ills. Germany has millions more landlords and no bubble. There's obviously more to it and it is the same in all anglo saxon countries.....strong home ownership desire breeds property bubbles. The UK/US/Australia etc. etc. etc. have had bubbles despite very small rental markets and very high home ownershp rates.

DubTony

I have to say I'm in agreement with Darragh regarding residential ownership. My brother witnessed the most amazing scene in an apartment block 100 yeards from the Liffey a few years ago (around 1998). He was a first time buyer and had to stand in a line. People in front of him were ordering them like they'd order coffees in Starbucks. "Gimme a first floor, a penthouse and an end unit".
One woman haggled with the estate agent, not on price, but on location within the block.
"I want all five of them together on the third floor"
"I can give you three together there and two more together on the fourth floor, but they're 5K dearer"
When you viewed a showhouse on a Saturday the price was £X. If you didn't book the house and went back on Sunday the price was £X + £5,000. Developers knew that not only were there plenty of willing first time buyers (and it should be noted that this group have been hardest hit by the crash), if they ran away there were hundreds of would-be landlords ready to invest.

It was this absolute madness that pushed prices up and made it un affordable for people to buy houses and apartments. As a result the bubble was created as people scrambled to get on the property ladder.

Home ownership is a part or our psyche. Since the famine it's been passed on from generation to generation that you must own your own house. Obviously the Germans didn't have absentee landlords. :rolleyes:

Anyway lads, we're off topic. This started out as a thread about getting out of a lease.

murphaph

DubTony wrote: »

Anyway lads, we're off topic. This started out as a thread about getting out of a lease.

True. Suffice to say it epends on the landlord and the tenant's personal assets. Different in each and every case.