Increase in rent - is it fair?

keano2012

Hey,

Our landlord in trying to increase the rent by 50euro PM. Her reason is inflation has increased by 25 PM and the property taxes by 25 PM. Seems a little steep to me? It is a one bed apt in the city centre. All advise is welcomed because I really need some

Thanks,
Keano

djimi

The landlord is entitled to review the rental price once every 12 month period, and can raise the price provided it remains in line with market rental rate for the area (basically provided it does raise the rent to more expensive than similar properties in the area).

You as a tenant always have the right to refuse the rental increase and can terminate the tenancy on that basis. Depending on the area and the rental market the landlord will then be in a position where they have to assess how much they stand to lose from an empty property vs how much they stand to gain (one month without rent will almost certainly cost them more than they stand to gain from a years worth of the increase). If the property will rent quickly for the increased rate then they will most likely let you go.

3DataModem

keano2012 wrote: »

Hey,

Our landlord in trying to increase the rent by 50euro PM. Her reason is inflation has increased by 25 PM and the property taxes by 25 PM. Seems a little steep to me? It is a one bed apt in the city centre. All advise is welcomed because I really need some

Thanks,
Keano

It depends. If he'll get the rent from a new tenant quickly, then you may need to either pay up or move.

keano2012

thanks for the advice. Is 25 euro for inflation seem a bit steep tho?

djimi

So long as the increase is in line with the market rental Im not aware that they have to give you a reason at all behind the increase. Youre probably not wrong in thinking that its a bit steep of an increase, but its up the landlord to decide if they want to risk losing you as a tenant and possibly having a vacant period on the property for the sake of a somewhat steep increase in rent.

Draco

keano2012 wrote: »

thanks for the advice. Is 25 euro for inflation seem a bit steep tho?

I would say so - inflation last year averaged at 1.76%. Are there any other apartments for rent in your block? If they're going for less than yours it's a bit of leverage to use on the landlord.

matrim

keano2012 wrote: »

thanks for the advice. Is 25 euro for inflation seem a bit steep tho?

By inflation he probably means property tax

keano2012

matrim wrote: »

By inflation he probably means property tax

nope inflation is one reason (25 euro) and property tax is another (25 euro). She was saying that the property tax is 45euro pm but she is leaving me off because 70euro pm is too high to pass on to me! (i dont think the property tax is that high).

I would like to go back with something about inflation excuse being rubbish but i need some facts first!
no other apts in the block are for rent so nothing to compare!

Ritchi

keano2012 wrote: »

nope inflation is one reason (25 euro) and property tax is another (25 euro). She was saying that the property tax is 45euro pm but she is leaving me off because 70euro pm is too high to pass on to me! (i dont think the property tax is that high).

I would like to go back with something about inflation excuse being rubbish but i need some facts first!
no other apts in the block are for rent so nothing to compare!

If it were to be 70 pm for property tax, it would mean the property is worth 450-500k. Or given that you only have to pay half this year, it would be in the region of 1m.

I'm guessing where you're renting isn't worth either of these amounts.

L1011

More like 45 a year for a 1 bed next year

keano2012

Ritchi wrote: »

If it were to be 70 pm for property tax, it would mean the property is worth 450-500k. Or given that you only have to pay half this year, it would be in the region of 1m.

I'm guessing where you're renting isn't worth either of these amounts.

1 bed apartment in grand canal dock. defo not worth that price...i reckon 300k max!

matrim

keano2012 wrote: »

nope inflation is one reason (25 euro) and property tax is another (25 euro). She was saying that the property tax is 45euro pm but she is leaving me off because 70euro pm is too high to pass on to me! (i dont think the property tax is that high).

I would like to go back with something about inflation excuse being rubbish but i need some facts first!
no other apts in the block are for rent so nothing to compare!

Well, it's possible he's not being 100% honest in what he's telling you. Or in his inflation calculation he could include increase in management fees, insurance increase etc.

ted1

Tell her you will move and having the place empty for a month will negate the extra rent, having it empty for two months or longer will make a loss. Getting bad tenants will be even worse.

D3PO

hes entitled to review the rent annually. If your not happy move out. He doesnt have to give you a reason. His reasons are bull but thats beside the point.

mitosis

Truth is the LL doesn't have to give you any reason for an increase. Some costs are way above inflation - heating for example.

€50.00 per month sounds like a big increase, but it depends on what you are currently paying. If your rent is €1000.00 per month it's a small increase.

Ritchi

keano2012 wrote: »

1 bed apartment in grand canal dock. defo not worth that price...i reckon 300k max!

Which would be about 40 quid a month, which is close enough to the 50 he asked for.

No idea how much you're paying, but it's up to you whether you pay it, rent is going up in areas like yours. Have a look about and see if there are other similar places for cheaper and move if you find somewhere. If not, pay the 50, or even chance offering 25 to see if they go for that.

the_syco

Easiest way to get a tenant out; raise the rent. Perhaps he wants you gone?

keano2012

the_syco wrote: »

Easiest way to get a tenant out; raise the rent. Perhaps he wants you gone?

haha maybe she does!! i dont think so tho...she is not in ireland and this is pretty much the first time i have heard from her! she gets her rent on time and we never have issues!

Chris_5339762

Not to cause a panic, but if she is outside of Ireland, are you withholding tax from the amount you send to her monthly? Thats your responsibility as a tenant. Stupid law, but thats the rule.

Citizenpain

Chris_5339762 wrote: »

Not to cause a panic, but if she is outside of Ireland, are you withholding tax from the amount you send to her monthly? Thats your responsibility as a tenant. Stupid law, but thats the rule.

very silly rule

OP - here's the info
http://www.revenue.ie/en/tax/it/leaflets/it70.html#section21

No issue if you are paying to someone in ireland on their behalf though

keano2012

Citizenpain wrote: »

very silly rule

OP - here's the info
http://www.revenue.ie/en/tax/it/leaflets/it70.html#section21

No issue if you are paying to someone in ireland on their behalf though

yep her account is in ireland so has no impact..........i hope!

djimi

It doesnt matter where her account it; its where she is that counts. If she lives outside the state and you are not dealing with a letting agent then you need to be withholding that 20%, regardless of whether or not you pay your rent into an Irish bank account.

irlirishkev

OP, never mind the reasons she's given for increasing the rent. Don't try arguing over those, it won't make any difference.
What might make a difference is telling her you can't afford X amount, but you can afford Y amount, and see how that goes down. As others have said, the last thing any LL wants is a vacant property for any length of time.

Aside from the above; 1 bed apt in Grand Canal Dock, so you're probably paying over 850.. 50 doesn't seem that steep to me.

keano2012

thanks for the advice everyone! anyone have any tips on how I should word my email back to negotiate it down to 25 euro PM? I am new to all this negotiating thing!

Elvis_Presley

What type of lease have you got? If your still in a fixed term, then she can't do anything. If you're part 4 then, she can raise the rent once a year in line with market rates. Inflation and property tax have nothing to do with it. Find out what similar properties in your area are going for. If the increase is in line with that, pay or leave. Otherwise refuse. I'm sure you can appeal the rent increase with the PRTB. Talk to Threshold to find out what exactly your rights are.

Doom

property tax does not come into force till July 2013

gaius c

D3PO wrote: »

hes entitled to review the rent annually. If your not happy move out. He doesnt have to give you a reason. His reasons are bull but thats beside the point.

Tenant is entitled to appeal a rent increase to the PRTB. It takes 6-9 months to hear the appeal and they stay paying the old rent.

Say goodbye to a reference though.

The_Conductor

Doom wrote: »

property tax does not come into force till July 2013

However for rental property a landlord will have to pay a full years NPPR charge, and a half year years assessed property tax- the NPPR still has to be paid in full, and its for all intents and purposes a property tax.

OP- the reasons the landlord is giving for the increase are circumspect to say the least- however its entirely possible that Management Charges and other costs- outside of the general rate of inflation, have indeed shot up.

Swampy

There's also the tax on investment properties that she might want to cover and also to protect herself down the line for water tax.

2rkehij30qtza5

Mortgage rates have gone up so if she has a mortgage she could be paying more now than she was when you first moved in.
She might have paid the property charge too. Owning property has become significantly more expensive recently.
Best bet is to just talk to her/email her and say what you are willing to pay. If you are not comfortable with €50 extra then just say it to her. See what she comes back with.

The_Conductor

Consensus is that she is not talking about the general inflation rate- more her cost of ownership and her return-on-investment, which is steadily creeping down.

Another new cost for the landlord- PRSI on gross rental receipts......... How thats fair is beyond me- no indication of whether letting the property is profitable or not- a straightline deduction on the rental income........

If the government keep increasing taxes- they are going to have unintended consequences. Perhaps landlords in areas of higher rental availability may be unable to pass on the increases- but Dublin and the major urban areas do not have massive over supply of rental accommodation..........

RATM

OP I'd haggle on that €50. Also the fact she is abroad means it is likely more difficult for her to re-rent it if you move on. She could get a letting agent to rent it for her but they're going to charge a fee, which comes off the landlords profits.

You could tell her that there is plenty of inflation for a tenant in Ireland- food prices, health insurance, petrol, ESB/Gas, etc but there is no sign of any Irish bosses offering any pay rises soon to compensate for it.

We're all under the cosh of inflation, not just landlords.

Del2005

keano2012 wrote: »

thanks for the advice everyone! anyone have any tips on how I should word my email back to negotiate it down to 25 euro PM? I am new to all this negotiating thing!

Dear Ms Landlady,

I can only afford to pay €25 for the rent increase, if this isn't acceptable I'll be moving out.

Regards
Keano.

That's assuming that you are willing to move out and there are other properties available in your price range, have a look at the rental sites for prices in the area you want to live.

keano2012

Del2005 wrote: »

Dear Ms Landlady,

I can only afford to pay €25 for the rent increase, if this isn't acceptable I'll be moving out.

Regards
Keano.

That's assuming that you are willing to move out and there are other properties available in your price range, have a look at the rental sites for prices in the area you want to live.

it worked! didnt exactly use your turn of phrase but got the rent increase reduced!!

Thanks everyone for your input and comments....really helped me