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Landlords 'pocket rent but leave loans unpaid'

  • 29-03-2011 9:03am
    #1
    snubbleste
    Banned (with Prison Access) Posts: 31,117 ✭✭✭✭


    Landlords 'pocket rent but leave loans unpaid'
    Buy-to-let investors struggling to meet mortgage repayments are pocketing rent and refusing to pay banks with the income.
    Yesterday a senior judge highlighted the practice of investors and homeowners renting their houses and keeping the income instead of using it to pay arrears and mortgage repayments.
    "It is extraordinary how many people seem to think they can take the rent and not pay," said High Court Justice Elizabeth Dunne.

    Should I be demanding a tax clearance certificate from my next landlord to ensure his creditworthiness? I would'nt want the bank knocking on the door seeking repossession of the home I'm renting and potentially disrupting my tenancy.


Comments

  • #2
    Zamboni
    Registered Users, Registered Users 2 Posts: 4,306 ✭✭✭Zamboni


    snubbleste wrote: »
    Should I be demanding a tax clearance certificate from my next landlord to ensure his creditworthiness? I would'nt want the bank knocking on the door seeking repossession of the home I'm renting and potentially disrupting my tenancy.

    A TCC would have no details of a LL's creditworthiness.
    It is issued by the Revenue with the purpose being that the state can ensure that any/companies or individuals it is in business with have their tax affairs in order.


  • #3
    true
    Banned (with Prison Access) Posts: 1,325 ✭✭✭true


    I do not think a bank would turf out a tenant that quick.


  • #4
    snubbleste
    Banned (with Prison Access) Posts: 31,117 ✭✭✭✭snubbleste


    My point really is is that some landlords demand a letter of reference from an employer or proof of regular earnings such as a bank statement before letting a place.
    Surely it should work the other way as well? I want proof that you are solvent..


  • #5
    Zamboni
    Registered Users, Registered Users 2 Posts: 4,306 ✭✭✭Zamboni


    snubbleste wrote: »
    My point really is is that some landlords demand a letter of reference from an employer or proof of regular earnings such as a bank statement before letting a place.
    Surely it should work the other way as well? I want proof that you are solvent..

    Its a fair point.
    One thing a lot of people never even ask for (which seems obvious) is for proof that the person you are renting from is actually the proprietor of the property.
    In most cases I doubt you'd even get a civilised reply.


  • #6
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    It is a fair point- however to be honest with you- its the bank's job to establish and monitor the creditworthiness of their clients- not you.


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  • #7
    paul71
    Registered Users, Registered Users 2 Posts: 3,325 ✭✭✭paul71


    smccarrick wrote: »
    It is a fair point- however to be honest with you- its the bank's job to establish and monitor the creditworthiness of their clients- not you.


    Agreed, however you are entitled to establish a landlords credit worthiness in terms of your rental deposit, especially as standard rental desposits in Ireland are not regarded as first and last months rent as is common in some other countries but a security deposit against damages which you must wait for a refund for after the end of the lease.


  • #8
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    paul71 wrote: »
    Agreed, however you are entitled to establish a landlords credit worthiness in terms of your rental deposit, especially as standard rental desposits in Ireland are not regarded as first and last months rent as is common in some other countries but a security deposit against damages which you must wait for a refund for after the end of the lease.

    Its also common practise in other countries for a deposit to be 3-6 months rent (its very rare for it to be as low as 1 month's rent). Fully furnished apartments/houses are also rare elsewhere- and this tends to be where the lions share of any damage occurs.

    The advent of the PRTB (or a sister agency) acting as a repository for deposits should hopefully instill a little confidence in the process. It really will be up to Landlords and tenants to keep good inventories and photograph any lettings in great detail at the beginning and end of any tenancy.

    Currently, under legislation- the deposit can only be used towards a specific purpose- the restitution of any damage over and above normal wear and tear in a property. Some landlords will make agreements on the side with their tenants allowing them to use the deposit in lieu of a final month's rent- however this is a private arrangement between them. The proposal to double mandatory deposits to 2 months and allow a portion of it towards the final month- is simply unworkable in an Irish context in my opinion (which is probably why it was dropped at committee stage).


  • #9
    BostonB
    Closed Accounts Posts: 18,056 ✭✭✭✭BostonB


    smccarrick wrote: »
    ...The advent of the PRTB (or a sister agency) acting as a repository for deposits should hopefully instill a little confidence in the process. ...

    Just to be clear, this doesn't exist. You talking about if this got set up yes?


  • #10
    BostonB
    Closed Accounts Posts: 18,056 ✭✭✭✭BostonB


    snubbleste wrote: »
    Should I be demanding a tax clearance certificate from my next landlord to ensure his creditworthiness? I would'nt want the bank knocking on the door seeking repossession of the home I'm renting and potentially disrupting my tenancy.

    No because, AFAIK the bank becomes the LL and can't terminate your tenancy for that reason.


  • #11
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    BostonB wrote: »
    Just to be clear, this doesn't exist. You talking about if this got set up yes?

    Its one of the proposals in the programme for government- so there is a reasonable expectation that it should become a reality.


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  • #12
    Kosseegan
    Banned (with Prison Access) Posts: 987 ✭✭✭Kosseegan


    smccarrick wrote: »
    Its one of the proposals in the programme for government- so there is a reasonable expectation that it should become a reality.


    There are many proposals in the programme for government. Many will never become a reality. Proposals that will add a layer of bureaucracy to an everyday transaction are much less likely to proceed. A huge percentage of the PRTB workload is related to deposit retention disputes. I have heard of disputes over €200 costing €5000 to determine.
    The current situation is untenable. I notice already that Pre '63 houses in Ranelagh are coming on the market in greater numbers than ever before. They will all be converted to family houses. Rental accomodation will become increasingly scarce as a result of NAMA sell offs and investors exiting the market. Any more of this deposit nonsense and single people will have to go back to living in bed ,breakfast and evening dinner accomodation.


  • #13
    TestTransmission
    Registered Users, Registered Users 2 Posts: 19,106 ✭✭✭✭TestTransmission


    true wrote: »
    I do not think a bank would turf out a tenant that quick.

    It nearly happened me,the place I was renting last year ,the landlord never bothered to pay his loan.I had the sheriff turn up and I was served 2 weeks notice,the bank didn't care about me renting the property,I was irrevelant.

    Fortunately at the 11th hour,the landlord and the bank came to a agreement.


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