Landlords choosing to rent by the room rather than entire property

Am I correct in an impression that more landlords have switched to renting out individual rooms to tenants, with use of common areas, instead of renting to a group which are jointly and severally liable for the whole house?

And that while this might involve more work for the landlord its because its easier to deal with things if a tenancy goes pearshaped such as a tenant refusing to pay rent or wrecking the place?

I can well understand people taking steps to avoid the inefficient court system that passes for justice in this country.

johnnyskeleton

I wouldnt have thought so. But a rented room with access to a common area sounds like a licence rather than a lease. So unless you want your landlord arriving in at creepy o'clock and risk short noticr eviction, I'd insist on a full lease.

riclad

I,m not a legal expert ,
I think you are a tenant unless you are living in a house and the landlord lives there too .
eg you are covered by the rent a room scheme .
And you can be told to leave in a week ,without going to court .
Any tenant is entitled to a rent book ,which has a record of deposit paid,
rent paid ,etc and which has a section which outline,s your basic rights as a tenant and has phone no,s for threshold etc
People who rent a house or an apartment should ask for a lease ,.
a lease is usually 1 or 2 years long at least .
its well known someone can stop paying rent on a house and just wait for a year or more rent free,and wait for the case to go to the court .
And the landlord is left to pay the legal fee,s for the eviction process .

Mrs OBumble

I'm no lawyer, but I actually reckon this model is illegal: you need to have sole access to a kitchen and bathroom, not shared.

I know it's widely used, and that it's not the reason why the law was changed: a bedroom + shared everything else is vastly different from a bedsit and shared bathroom. But the way the law's been written ....

I can understand why LL's might switch to it: less likely for the whole rent to stop being paid at once. But as a tenant I would never entertain a situation where I couldn't choose my housemates.

As a tenant this is the only way I've rented in houseshares to date. Renting a single room with shared access to common areas. Personally it's the best way to houseshare imo as you have far more flexibility and much less responsibility. Anyone I've lived in operated on a months notice regardless of how long you lived there, just find a replacement for you. While if someone else moves out and someone isn't found or if someone stops paying rent you aren't liable. This method is very common from my experience, I've lived in a number operating this way and I've seen many friends in similar set-ups. Whether it's becoming more popular I'm not sure I think it's always been fairly common.

If I was renting a house out I'd be inclined to go down this route also. You have much less risk of being out of pocket for rent as if one person stops paying you still have the others, you have much more of a tenant turn over and therefore much less chance of people wanting to stay long term and thus digging their heels in etc if asked to move out. These setups tend to run themselves too with people moving out getting a person to replace them so they can actually be less work for the LL rather than more (after the house is initially filled).

It can also be argued (and was ruled in one PRTB case) that you are actually a licensee in these situations, this may be something that gets clarified in future but if so then it gives a LL far more power of entry and eviction powers than in a traditional tenancy and with the carry on from a lot of tenants nowadays it's welcome power for a LL.

Graham

Mrs OBumble wrote: »

I'm no lawyer, but I actually reckon this model is illegal:

I'd be interested in seeing the law that makes it illegal.

Cuddlesworth

johnnyskeleton wrote: »

I wouldnt have thought so. But a rented room with access to a common area sounds like a licence rather than a lease. So unless you want your landlord arriving in at creepy o'clock and risk short noticr eviction, I'd insist on a full lease.

I would have said different, but after reading online it would appear you are right.

What is a licensee?
A licensee is a person who occupies accommodation under license. Licensees can arise in all sorts of accommodation but most commonly in the following four areas;

"persons occupying accommodation in which the owner is not resident under a formal license arrangement with the owner where the occupants are not entitled to its exclusive use and the owner has continuing access to the accommodation and/or can move around or change the occupants"

newacc2015

Mrs OBumble wrote: »

I'm no lawyer, but I actually reckon this model is illegal: you need to have sole access to a kitchen and bathroom, not shared.

I know it's widely used, and that it's not the reason why the law was changed: a bedroom + shared everything else is vastly different from a bedsit and shared bathroom. But the way the law's been written ....

I can understand why LL's might switch to it: less likely for the whole rent to stop being paid at once. But as a tenant I would never entertain a situation where I couldn't choose my housemates.

It's not. The PRTB had a case where the Landlord was letting out the rooms individually and illegally evicted the tenant. No where in the ruling did they say the letting was illegal. They say the tenant had full tenancy laws and was not a licensee. Someone on boards knows the case number and you read the PRTB justification on why they had full tenancy rights. The PRTB ruled a few years before hand, that a house share was a licensee agreement and not full tenancy rights.

LLs have switched to it, as it is more profitable. You can rent rooms individually for more money than a house on its own. Also tenants tend to be more respectful to the house/apartment, as they dont really know each other.

I wouldnt mind a house share with a random person. I would prefer fallout with a group of random people, than friends. I know plenty of best friends, who fell out with their friends due to living together.

4ensic15

newacc2015 wrote: »

It's not. The PRTB had a case where the Landlord was letting out the rooms individually and illegally evicted the tenant. No where in the ruling did they say the letting was illegal. They say the tenant had full tenancy laws and was not a licensee. Someone on boards knows the case number and you read the PRTB justification on why they had full tenancy rights. The PRTB ruled a few years before hand, that a house share was a licensee agreement and not full tenancy rights.

LLs have switched to it, as it is more profitable. You can rent rooms individually for more money than a house on its own. Also tenants tend to be more respectful to the house/apartment, as they dont really know each other.

I wouldnt mind a house share with a random person. I would prefer fallout with a group of random people, than friends. I know plenty of best friends, who fell out with their friends due to living together.

This thread deals to some extent with the situation here.
http://www.boards.ie/vbulletin/showthread.php?p=80995461
The reality is that there is no definitive answer as some relevant points were not put to the Tribunal in the second decision.
The only common point is that both decisions were against the landlord.

newacc2015

newacc2015 wrote: »

LLs have switched to it, as it is more profitable.

Perhaps, though I was focusing more on the fact that its much easier to gain posession from a 'tenant' who doesnt pay rent or wrecks the place if they are treated as a licensee.
I've heard some horrible stories of people who cant gain access to their own property because a tenant knows that the courts will be so expensive and slow that they will be able to continue to live there rent free for another year or more...

newacc2015 wrote: »

Also tenants tend to be more respectful to the house/apartment, as they dont really know each other.

Interesting bit of psychology, I think you might be right too.

cnocbui

Mrs OBumble wrote: »

I'm no lawyer, but I actually reckon this model is illegal: you need to have sole access to a kitchen and bathroom, not shared.

I know it's widely used, and that it's not the reason why the law was changed: a bedroom + shared everything else is vastly different from a bedsit and shared bathroom. But the way the law's been written ....

I can understand why LL's might switch to it: less likely for the whole rent to stop being paid at once. But as a tenant I would never entertain a situation where I couldn't choose my housemates.

Since this is almost exactly the model on which a lot of student accommodation is run on - owned and operated by the colleges themselves - I'll take a punt and say you are wrong.

Mrs OBumble

Graham wrote: »

I'd be interested in seeing the law that makes it illegal.

http://www.irishstatutebook.ie/eli/2008/si/534/made/en/pdf

It doesn't actually contain a definition of a "house".

But it does say that

“tenant” means the person for the time being entitled to the occupation of a house under a tenancy,

And that each house has to have a number of things, including kitchen and toilet for the exclusive use of the "house".

Given that in the rent-a-room scenario, the tenant only has occupation of one room, you could argue that room is the boundary of their "house".


It a moot point of course - the tribunal (one would hope) is not going to be stupid enough to take this point of view given the current housing situation. But I reckon that someone will argue it successfully, sooner or later, if it suits their purposes.

Graham

Mrs OBumble wrote: »

http://www.irishstatutebook.ie/eli/2008/si/534/made/en/pdf

It doesn't actually contain a definition of a "house".

But it does say that

And that each house has to have a number of things, including kitchen and toilet for the exclusive use of the "house".

Given that in the rent-a-room scenario, the tenant only has occupation of one room, you could argue that room is the boundary of their "house".


It a moot point of course - the tribunal (one would hope) is not going to be stupid enough to take this point of view given the current housing situation. But I reckon that someone will argue it successfully, sooner or later, if it suits their purposes.

I think you're taking several un-related items and knitting them into something they're not.

gctest50

Mrs OBumble wrote: »

http://www.irishstatutebook.ie/eli/2008/si/534/made/en/pdf

It doesn't actually contain a definition of a "house".

But it does say that

And that each house has to have a number of things, including kitchen and toilet for the exclusive use of the "house".

Given that in the rent-a-room scenario, the tenant only has occupation of one room, you could argue that room is the boundary of their "house".
.........

Vaguely related to it all, you need planning permission to break a house into flats 1963 Planning Act ( maybe - not good at the legalesy )

athtrasna

Thread title updated. OP as per the charter please use meaningful thread titles thanks

Mod

4ensic15

gctest50 wrote: »

Vaguely related to it all, you need planning permission to break a house into flats 1963 Planning Act ( maybe - not good at the legalesy )

It is the Planning Act 1964. It banned the creation of new bedsits. New conversions of old buildings must meet current regulations regarding size, disabled access etc. The issue is what constitutes a dwelling. If a bedroom is a dwelling as some in the PRTB think, then it should have a bathroom and kitchen within it. To install such would be a breach of the Planning Acts. It would mean effectively that it would be illegal to rent bedrooms individually and a landlord would have no choice but to rent the entire house as one unit. The other option would be to view it as a hostel arrangement (as is done with a lot of student accommodation) with the occupants having the same rights as a hotel guest.
It will ultimately take a court decision (or indeed, several) to resolve this. many renters prefer not to be caught up in a contract for rent with others on a joint and several liability basis and many landlords find it more convenient to rent rooms individually as there is less risk of default, they retain rights of access to common areas and there are fewer major voids when the entire property is unoccupied.

yqtwqxqm

My brother has two houses that where he rents out only the room in both of them.
He lives on neither house, but sleeps in them the odd night when he is either near one of them working or when he is too drunk to drive home.
In both of them he has converted the attic and keeps it locked as his room. He rents the other rooms individually.
He has spoken to revenue and the PRTB and both are happy with the situation that he is not using the rent a room scheme and that all of the people renting are licencees.

Pkiernan

Mrs OBumble wrote: »

I'm no lawyer...

Only part of your post that is correct

yqtwqxqm

yqtwqxqm wrote: »

My brother has two houses that where he rents out only the room in both of them.
He lives on neither house, but sleeps in them the odd night when he is either near one of them working or when he is too drunk to drive home.
In both of them he has converted the attic and keeps it locked as his room. He rents the other rooms individually.
He has spoken to revenue and the PRTB and both are happy with the situation that he is not using the rent a room scheme and that all of the people renting are licencees.

I was actually going suggest something like this as a good way to rent out a house or houses. i.e. Retain a bedroom and treat it like rent a room (but of course tax will be due in this instance). You just rent out the other rooms and tell the people they are "living with the owner" but you aren't around much, just pop in every once in a while. This will give you great control over who stays in the house, no messing with PRTB, can get rid of people instantly, can inspect the place without giving notice etc.

Only two issue are firstly getting enough rent as if you rented the full house while retaining a room (not a huge problem if you have a box room that wouldn't rent for much, retain that and spread the cost of the on the other rooms in the house) and secondly you don't want to be sharing bills so you would need to make it clear from the start that you are very rarely there and won't be sharing the bills with the people living there full time.

4ensic15

Curtis Early Trap wrote: »

e etc.

Only two issue are firstly getting enough rent as if you rented the full house while retaining a room (not a huge problem if you have a box room that wouldn't rent for much, retain that and spread the cost of the on the other rooms in the house) and secondly you don't want to be sharing bills so you would need to make it clear from the start that you are very rarely there and won't be sharing the bills with the people living there full time.

A person is either living there or they are not. No on is going to accept someone as living there when it suits them and not living there when it does.

4ensic15

4ensic15 wrote: »

A person is either living there or they are not. No on is going to accept someone as living there when it suits them and not living there when it does.

The post above mine appears to suggest this system in operation, I'd be interested to see if bills are being shared with the LL my guess is that they are not. Tenants are told I have a room I might sleep here an odd time but ye are responsible for the bills.

4ensic15

Curtis Early Trap wrote: »

The post above mine appears to suggest this system in operation, I'd be interested to see if bills are being shared with the LL my guess is that they are not. Tenants are told I have a room I might sleep here an odd time but ye are responsible for the bills.

There is no doubt that some people try these things on but it is unlikely that the PRTB would recognise such a landlord as living in the dwelling and so outside the scope of the RTA. A landlord trying to claim to live in the dwelling would have to keep the bills in his own name. Trying to extract the full amount from the residents would be problematic.

Graham

4ensic15 wrote: »

it is unlikely that the PRTB would recognise such a landlord as living in the dwelling and so outside the scope of the RTA.

I wouldn't be so sure:

What is a Licensee?
A licensee is a person who occupies accommodation under license. Licensees can arise in all sorts of accommodation but most commonly in the following four areas;

1. persons staying in hotels, guesthouses, hostels, etc.,
2. persons sharing a house/apartment with its owner e.g. under the ‘rent a room’ scheme or ‘in digs’,
3. persons occupying accommodation in which the owner is not resident under a formal license arrangement with the owner where the occupants are not entitled to its exclusive use and the owner has continuing access to the accommodation and/or can move around or change the occupants, and
4. persons staying in rented accommodation at the invitation of the tenant.

The provisions of the Residential Tenancies Act 2004 do not apply to the first three categories. Although most of the Act does not apply to the fourth category also, some provisions are relevant where the licensee is residing with the tenant and this leaflet is aimed at persons in that category.

Source: http://prtb.ie/media-research/publications/licensees-in-private-rented-accommodation

4ensic15

4ensic15 wrote: »

There is no doubt that some people try these things on but it is unlikely that the PRTB would recognise such a landlord as living in the dwelling and so outside the scope of the RTA. A landlord trying to claim to live in the dwelling would have to keep the bills in his own name. Trying to extract the full amount from the residents would be problematic.

I think you are slightly confusing claiming rent a room with being a licensee. To claim tax free rent a room the LL had to live in the house and it be his primary residence. This is not a stipulation whether a person is licensee or not. He could have a house say in Dublin that he keeps a room in and stays there the odd time he is in Dublin. He would still have a room and have access too it thus making the people staying there licensees as far as I'm aware there is no stipulation on how many houses you can live in as you could spend time there and there in different parts of the country but not live in the houses full time.

As for the bills, in my houseshare the bills are all in the LLs name, we just open them and pay them the same could be done in the scenario we are discussing. If people aren't happy with it they can move out or not move in in the first place just be upfront with potential people when they are viewing, you will find people happy to go along with it. A lot of people would also be happy to say live in a 3 bedroomed house but really with only one other person (as the owner is rarely there) even if it costs more.

um7y1h83ge06nx

I do this with a house I own. My OH and I have kept the single room. There are 3 other rooms so we split the bills (elec, gas and bins) 4 ways.

Obviously we take care of the tax side of things as it is not our principal place of residence, we haven't actually stayed there any night since July.

Obviously this puts the the advantages on our side but I think the problem is that landlords have so little rights with tenancy agreement. If there was a better balance between landlord and tenants rights this might not be happening as much as it is.

Back when this was my home and before the now fiancee moved in I was renting out the rooms under the rent a room scheme so I'm used to this arrangement.

4ensic15

Curtis Early Trap wrote: »

I think you are slightly confusing claiming rent a room with being a licensee. To claim tax free rent a room the LL had to live in the house and it be his primary residence. This is not a stipulation whether a person is licensee or not. He could have a house say in Dublin that he keeps a room in and stays there the odd time he is in Dublin. He would still have a room and have access too it thus making the people staying there licensees as far as I'm aware there is no stipulation on how many houses you can live in as you could spend time there and there in different parts of the country but not live in the houses full time.

As for the bills, in my houseshare the bills are all in the LLs name, we just open them and pay them the same could be done in the scenario we are discussing. If people aren't happy with it they can move out or not move in in the first place just be upfront with potential people when they are viewing, you will find people happy to go along with it. A lot of people would also be happy to say live in a 3 bedroomed house but really with only one other person (as the owner is rarely there) even if it costs more.

My point is that the PRTB would likely examine each scenario carefully. They may well say a situation where a landlord does not really live at all is an attempt to circumvent the act and find there is a lease. One of the indicia of living in a house is contributing to the outgoings. It has nothing to do with the rent a room scheme.
People may be happy with all kinds of situations but when the become unhappy they go to the PRTB and that is when it can become unpredictable.

4ensic15

4ensic15 wrote: »

My point is that the PRTB would likely examine each scenario carefully. They may well say a situation where a landlord does not really live at all is an attempt to circumvent the act and find there is a lease. One of the indicia of living in a house is contributing to the outgoings. It has nothing to do with the rent a room scheme.
People may be happy with all kinds of situations but when the become unhappy they go to the PRTB and that is when it can become unpredictable.

The PRTB acknowledge this very setup in their own rules so I dont see them having issue with it.

What is a Licensee?
A licensee is a person who occupies accommodation under license. Licensees can arise in all sorts of accommodation but most commonly in the following four areas;

1. persons staying in hotels, guesthouses, hostels, etc.,
2. persons sharing a house/apartment with its owner e.g. under the ‘rent a room’ scheme or ‘in digs’,
3. persons occupying accommodation in which the owner is not resident under a formal license arrangement with the owner where the occupants are not entitled to its exclusive use and the owner has continuing access to the accommodation and/or can move around or change the occupants, and
4. persons staying in rented accommodation at the invitation of the tenant.

4ensic15

Graham wrote: »

What are you basing that on given the PRTBs position appears to be

A licensee is a person who occupies accommodation under license. E.g. persons occupying accommodation in which the owner is not resident under a formal license arrangement with the owner where the occupants are not entitled to its exclusive use and the owner has continuing access to the accommodation and/or can move around or change the occupants.

The PRTB look at each situation. They may well find that if rooms are being let at different prices a person cannot be expected to move around at random. They may well hold each bedroom consists of a letting and is a lease. Just because a document says license on it does not mean it is not a lease and vice versa. The PRTB will look at the reality, not what the landlord claims. Remember the PRTB is tenant biased.

Graham

4ensic15 wrote: »

The PRTB look at each situation. They may well find that if rooms are being let at different prices a person cannot be expected to move around at random.

I see nothing that suggests a license is contingent on the random moving of rooms.

4ensic15 wrote: »

They may well hold each bedroom consists of a letting and is a lease.

Their own website suggests the contrary, do you have anything to backup your position?

4ensic15

4ensic15 wrote: »

The PRTB look at each situation. They may well find that if rooms are being let at different prices a person cannot be expected to move around at random. They may well hold each bedroom consists of a letting and is a lease. Just because a document says license on it does not mean it is not a lease and vice versa. The PRTB will look at the reality, not what the landlord claims. Remember the PRTB is tenant biased.

Move around or change occupants is referring to moving people out of the house and other in to replace them more so than moving people between rooms in the property. In any case I don't see price difference of rooms meaning anything.

yqtwqxqm

Curtis Early Trap wrote: »

The post above mine appears to suggest this system in operation, I'd be interested to see if bills are being shared with the LL my guess is that they are not. Tenants are told I have a room I might sleep here an odd time but ye are responsible for the bills.

I asked him for more details today.
Rooms are rented separate to each renter. They are informed that he will be there sometimes and he has his room locked.
He pays for the broadband and water charges and then lets them sort out the rest of the bills between themselves.
Revenue and PRTB have both said everything is fine as long as he is not using the rent a room scheme and is paying his tax.

Galwaystar

In the event of a LL renting out rooms under a license agreement (i.e. exclusive use of a bedroom but non exclusive use of common areas), are such license agreements registered with PRTB or are only leases registered?
What would be the revenue position of the LL seeking to claim the 75% interest on borrowings deduction for tax purposes? Assume of course that they are not claiming the Rent a Room allowance.

The_Conductor

Galwaystar wrote: »

In the event of a LL renting out rooms under a license agreement (i.e. exclusive use of a bedroom but non exclusive use of common areas), are such license agreements registered with PRTB or are only leases registered?
What would be the revenue position of the LL seeking to claim the 75% interest on borrowings deduction for tax purposes? Assume of course that they are not claiming the Rent a Room allowance.

As the inhabitants are licencees, rather than tenants, there is no tenancy to register with the PRTB.
With respect of the 75% mortgage interest- that is a matter between the owner of the property and Revenue. Obviously they would have to declare all the income- and be in a position to justify any deductions were they audited (and there is an increasing liklihood that people in these type scenarios will/are audited- where in years gone by, Revenue may not have questioned it).

So- as long as it stacks up- and the owner of the property gets good tax advice (and Revenue do not give advice- you're going to have to pay for it)- there is no reason you might not run with it.

Personally- I wouldn't touch this type situation with a bargepole- as either landlord or tenant- its far from satisfactory for both parties (obviously for vastly differing reasons).

4ensic15

The_Conductor wrote: »

As the inhabitants are licencees, rather than tenants, there is no tenancy to register with the PRTB.

Some PRTB decisions hold that a bedroom is a dwelling and exclusive use of it means a tenancy. It could be very dangerous to get it wrong. If it was held to be a tenancy all tax relief would be clawed back and there would be arrears of registration charges. It suits some landlords to rent that way because there are few voids in between lettings and it is much less likely that a bad tenant can dig in.