Residential tenancies bill 2016 proposals and discussion

beauf

In that case there is no shortage of rental properties. Landlords should be free to charge what they like and with the competition of all these landlords it will force rents down.

So no problem at all....

Villa05

Are these measures positive for REITs I know 1 or 2 raised concerns about runaway inflation in the rental market

Seanachai

Are the government trying to send a message out to ordinary workers to get a plane or a boat out of here or set up a favela somewhere in Fingal county? Because that's what it feels like, apartments and houses for those with good salaries with a few token social housing units so they can say that they care.

murphaph

I was always broadly in favour of rent control for sitting tenants but I always added the caveat that when a tenancy ends, the new rate should be up to the LL.

This permanently sets a value on an investment property so neighbouring identical properties are worth different amounts by an accident of timing. This can't be constitutional IMO.

Lots of nice landlords would have accepted under market rent (I think these are probably in the majority actually) but cannot accept a permanent devaluation of their property.

I skimmed over the proposal. I didn't see what happens when a property is removed from the rental market for x years and the re-let. It seems the break would be irrelevant.

Edit: after 2 years it's like a first time letting.

draiochtanois

This post has been deleted.

Sad Professor

Villa05 wrote: »

Are these measures positive for REITs I know 1 or 2 raised concerns about runaway inflation in the rental market

I'd be inclined to think the figure was negotiated with them, hence why Coveney couldn't budge on it. Unstable rental markets are not in their interest even if they were helping drive up rents.

Sad Professor

murphaph wrote: »

I was always broadly in favour of rent control for sitting tenants but I always added the caveat that when a tenancy ends, the new rate should be up to the LL.

This permanently sets a value on an investment property so neighbouring identical properties are worth different amounts by an accident of timing. This can't be constitutional IMO.

Lots of nice landlords would have accepted under market rent (I think these are probably in the majority actually) but cannot accept a permanent devaluation of their property.

I skimmed over the proposal. I didn't see what happens when a property is removed from the rental market for x years and the re-let. It seems the break would be irrelevant.

Edit: after 2 years it's like a first time letting.

It seems unenforceable to me and just something they stuck in until they can bring in proper security of tenure. If landlords take advantage of its unenforceablity and start evicting tenants they will just encourage calls to close loop holes making it easier for govt to do so.

The_Conductor

draiochtanois wrote: »

This post has been deleted.

If the rent on all residential property is taxed at 12.5% of gross rental income- and there are no tax shelters, no charities, no allowable costs etc- just a straight 12.5% of gross rental income is taxed (perhaps even do it at source)- then its entirely plausible that the tax take from the rental sector may in actual fact increase (this would of course mean the REITs etc- would have to abandon their 'charity' statuses, and all the avoidance and evasion measures would have to be dismantled immediately.

12.5% gross- as a flatline deduction- with no allowable costs- seems like a hell of a way to go- but it could be a complete gamechanger for both tenants and landlords.

Fian

Baby01032012 wrote: »

An even bigger blow for landlords came yesterday - it's not really 4% per annum. It's 4% after a 2 year freeze. Not only were they retrospectively applying the 4% but a landlord can not apply 4% per annum for the last 2 years that he wasn't allowed to give a rent increase.

Source? I heard something on the news this morning about a "drafting error" - is the amendment to be amended in order to apply 4% to the first increase rather than 4% per annum?

draiochtanois

This post has been deleted.

Fian

New version of amendment proposed by the minister:

“Amendment of section 19 (setting of rent above market rent prohibited) of Act of 2004
32. Section 19 of the Principal Act is amended by inserting the following subsections after
subsection (2):
“(3) The setting of the rent under the tenancy of a dwelling that is carried
out on or after the relevant date shall be subject to subsections (4) to
(7).
(4) Subject to subsection (5), in setting, at any particular time, the rent
under a tenancy of a dwelling in a rent pressure zone, an amount of
rent shall not be provided for that is greater than the amount
determined by the formula—
R x (1 + 0.04 x t/m)
where—
m is—
(a) 24, where section 24C(1)(a) applies, or
(b) 12, in any other case,

This means that :

For the first review it will be 2% per annum (over 24 months) rather than 4% per annum. It will be a 4% rather than an 8% rise.

Rolex_

Looks like an amendment being included too to exclude from the rent increase cap rent reviews already underway before the legislation takes effect? May be relevant for some LLs who have not reviewed rents for a lot longer than the 2 yrs allowed under the old rules.

(6) Where immediately before the relevant date a notice under section
22(2)—
(a) has been served on the tenant, or
(b) the rent review concerned has commenced,
then subsections (3) and (4) shall not apply to the new rent, referred to
in section 22(2), stated in that notice in accordance with that section.

Fian

Also worth observing that if you have not reviewed rent for 3/4 years you will be stuck at 2% per annum over that period - it will be important for anyone who has not reviewed rent in some time to be aware of that.

If you are in that position you would want to issue a review before the legislation is enacted.

Jayesdiem

What are the rules for properties which were due a rent review but were vacated and now are on the rental market waiting to be filled. Surely (SURELY!!) the landlord will be allowed to set the new rent at market rate for an incoming tenant? Otherwise the LL at No. 1 Dublin Street could be allowed to charge say, €1000 per month while the LL at No. 2 Dublin Street might be able to charge much more than that as a coincidence of time?

Fian

Jayesdiem wrote: »

What are the rules for properties which were due a rent review but were vacated and now are on the rental market waiting to be filled. Surely (SURELY!!) the landlord will be allowed to set the new rent at market rate for an incoming tenant? Otherwise the LL at No. 1 Dublin Street could be allowed to charge say. €1000 per month while the LL at No. 2 Dublin Street might be able to charge much more than that as a coincidence of time?

If the property was rented in the 24 months prior to the bill coming into operation the restrictions will apply based off the rent that was last applied.

If I were in that situation I would make certain to rent it to somebody at a market rent before the bill came into force, and notify the tenancy to the RTB.

murphaph

Fian wrote: »

Also worth observing that if you have not reviewed rent for 3/4 years you will be stuck at 2% per annum over that period - it will be important for anyone who has not reviewed rent in some time to be aware of that.

If you are in that position you would want to issue a review before the legislation is enacted.

Anyone lucky enough to be able to review rent should do so immediately. Many easy going landlords however will now be punished for giving their tenants a break and will be forced to give a significant discount on market rate to all future tenants even after their current ones leave. It's a disgrace.

Jayesdiem

Fian wrote: »

Jayesdiem wrote: »

What are the rules for properties which were due a rent review but were vacated and now are on the rental market waiting to be filled. Surely (SURELY!!) the landlord will be allowed to set the new rent at market rate for an incoming tenant? Otherwise the LL at No. 1 Dublin Street could be allowed to charge say. €1000 per month while the LL at No. 2 Dublin Street might be able to charge much more than that as a coincidence of time?

If the property was rented in the 24 months prior to the bill coming into operation the restrictions will apply based off the rent that was last applied.

If I were in that situation I would make certain to rent it to somebody at a market rent before the bill came into force, and notify the tenancy to the RTB.

No chance, The bill will be in place within days, maybe sooner.

The_Conductor

murphaph wrote: »

Anyone lucky enough to be able to review rent should do so immediately. Many easy going landlords however will now be punished for giving their tenants a break and will be forced to give a significant discount on market rate to all future tenants even after their current ones leave. It's a disgrace.

What happened is a lot of people did a review immediately before the 2 year rule came in (which was also supposed to be a temporary measure- I should state)- in most cases electing to offer tenants a discount to the open market rates- however, an increase nonetheless- as they were going to be locked in for 24 months- are now further locked in to a maximum 2% per annum increase (also allegedly a temporary measure).

We are having temporary measure, compounding temporary measure- which if they were stated to be anything other than 'temporary' in nature- would be struck down as unconstitutional- as they are a massive dilution of property rights guaranteed under the constitution.

Its not being widely reported- but the Minister is on dodgy legal ground with this legislation- it is possible that the AG's office may yet advise that it is indefensible from a constitutional perspective.

pilly

Jayesdiem wrote: »

No chance, The bill will be in place within days, maybe sooner.

Don't think so, they were talking about late February on the news earlier.

GGTrek

Fian wrote: »

Jayesdiem wrote: »

What are the rules for properties which were due a rent review but were vacated and now are on the rental market waiting to be filled. Surely (SURELY!!) the landlord will be allowed to set the new rent at market rate for an incoming tenant? Otherwise the LL at No. 1 Dublin Street could be allowed to charge say. €1000 per month while the LL at No. 2 Dublin Street might be able to charge much more than that as a coincidence of time?

If the property was rented in the 24 months prior to the bill coming into operation the restrictions will apply based off the rent that was last applied.

Forget it, this is practically impossible to enforce unless you request that every tenancy agreement needs to be uploaded to the RTB, but the law does not require that there is a tenancy agreement. It is typical populist garbage from Irish politicians.

In addition even if they required in a further amendment that a tenancy agreement has to be in place, once property is vacant landlord can easily request that new tenant pays service charges or LPT charges or property charges of the agent the landlord has hired to managed the property, ... This is a joke, only good news I have seen today is that the IPOA is thinking of a legal challenge to get rid of the joke.

GGTrek

pilly wrote: »

Jayesdiem wrote: »

No chance, The bill will be in place within days, maybe sooner.

Don't think so, they were talking about late February on the news earlier.

No they want it before Christmas to give a beautiful populist present to the media.

Sad Professor

The_Conductor wrote: »

Its not being widely reported- but the Minister is on dodgy legal ground with this legislation- it is possible that the AG's office may yet advise that it is indefensible from a constitutional perspective.

Coveney said he received advice from the AG on the latest draft.

I don't think the constitution is a problem. Article 43 states that private property rights are subject to social justice and the common good.

GGTrek

The_Conductor wrote: »

murphaph wrote: »

Anyone lucky enough to be able to review rent should do so immediately. Many easy going landlords however will now be punished for giving their tenants a break and will be forced to give a significant discount on market rate to all future tenants even after their current ones leave. It's a disgrace.

What happened is a lot of people did a review immediately before the 2 year rule came in (which was also supposed to be a temporary measure- I should state)- in most cases electing to offer tenants a discount to the open market rates- however, an increase nonetheless- as they were going to be locked in for 24 months- are now further locked in to a maximum 2% per annum increase (also allegedly a temporary measure).

We are having temporary measure, compounding temporary measure- which if they were stated to be anything other than 'temporary' in nature- would be struck down as unconstitutional- as they are a massive dilution of property rights guaranteed under the constitution.

Its not being widely reported- but the Minister is on dodgy legal ground with this legislation- it is possible that the AG's office may yet advise that it is indefensible from a constitutional perspective.

On the Indo it was written that IPOA was planning a legal challenge. Probably the grounds will be constitutionality. If you combine the repeal of section 42 (nobody seems to be interested in this but this is permanent and an even more massive change than the rent controls in terms of property rights) together with rent controls and limitations on sale you have a constitutionally letal combination for the case of the government in terms of property rights infringements. Only issue is that legal challenges of this type take a long time to come to fruition since they start at the High Court and go all the way to the Supreme Court. Finding a test case will be very easy, finding funding for the challenge will be even easier.

GGTrek

Sad Professor wrote: »

The_Conductor wrote: »

Its not being widely reported- but the Minister is on dodgy legal ground with this legislation- it is possible that the AG's office may yet advise that it is indefensible from a constitutional perspective.

Coveney said he received advice from the AG on the latest draft.

I don't think the constitution is a problem. Article 43 states that private property rights are subject to social justice and the common good.

I put a few links in a previous post on the Supreme Court of Ireland interpretation about article 43, some parts are hard reads, but worth reading to understand why the current proposals will probably be deemed not constitutional. The Attorney General is a government muppet nominated by Enda Kenny himself!

pilly

GGTrek wrote: »

No they want it before Christmas to give a beautiful populist present to the media.

They can present away, it won't be in that quick. Or else RTE news are telling lies so.

GGTrek

pilly wrote: »

GGTrek wrote: »

No they want it before Christmas to give a beautiful populist present to the media.

They can present away, it won't be in that quick. Or else RTE news are telling lies so.

Look at the very first link in the first post of this thread, they are at the final stage at the Dáil. They are also ramming through a massive housing bill combined with the RTA changes. All done in a hurry for such massive changes, no proper public debate, no proper public consultation, look at the fact that they are not even sure what the wording of the law effects will be (amendments of amendments), looks like a banana republic legislature

murphaph

GGTrek wrote: »

On the Indo it was written that IPOA was planning a legal challenge. Probably the grounds will be constitutionality. If you combine the repeal of section 42 (nobody seems to be interested in this but this is permanent and an even more massive change than the rent controls in terms of property rights) together with rent controls and limitations on sale you have a constitutionally letal combination for the case of the government in terms of property rights infringements. Only issue is that legal challenges of this type take a long time to come to fruition since they start at the High Court and go all the way to the Supreme Court. Finding a test case will be very easy, finding funding for the challenge will be even easier.

If they crowd fund it it'll be done in an hour. Where do I click?!

Donal55

GGTrek wrote: »

I put a few links in a previous post on the Supreme Court of Ireland interpretation about article 43, some parts are hard reads, but worth reading to understand why the current proposals will probably be deemed not constitutional. The Attorney General is a government muppet nominated by Enda Kenny himself!

They're stomping all over people's property rights in Castlegar, Galway to make way for a bypass. Constitution my arse.

Kapips88

I was talking to a friend at work today about this.
He got married a couple of years ago and himself and his wife bought a new house in Galway.
They decided to rent his apartment in Dublin and use it as a holiday home in a few years.
Their intention was to rent it for a couple of years and then leave it empty as a holiday apartment for when they come up to Dublin.

So he rented it out in March 2015 at well below market rate for a good tenant.
Since then temporary new rules came in that limit him to raising the rent once every two years and also he cannot have his apartment back for 4 years unless he wants to move into it which he doesnt, only as a holiday home, or if he wants to sell it, which he doesnt.
Those rules were bad enough, but he thought - ok I can handle 4 years and take it back then. But he wanted out of this rental lark after the govt basically hijacked his apartment.
He also had a boiler that had to be replaced which cost a small fortune, but he cant put the rent up anywhere near market value to recoup some of the costs.

So now, when he was thinking he wants his apartment back and will have it in another 2 and a bit years, or could put the rent up a bit to cover his losses in March, they hit him again.

Now he cant have his apartment back for another 4.5 years from now and he cant put the rent near market value.

He just wants his apartment back now and he cant have it. He doesnt want to rent it anymore.
But two rule changes, the first of which he never even had a chance to get to the end of, have cost him control of his property.
The tenant has such a good deal on the rent they will probably never leave. He didnt want to sell it, but now he thinks he will have to. At a loss.

This is very unfair on him.
Surely it is illegal.
Basically his property has been taken from him by the government with two law changes.
One locking him in and the other locking him in for even longer just as he was about to get out of the lock from the first one.
The next law change will ensure he can never ever have his apartment back, never mind 6 years.

Another colleague has a similar but slightly different story which i'll post about later too.

murphaph

I'll have to now withdraw my rented house from RAS in June when the 5 year contract expires. Let this government house its people itself if it's just going to kick me. I would foresee a rush of LLs doing the same as it's one way to end a tenancy as the tenants on RAS are extremely unlikely to be able to fund the rent themselves and under current rules are not eligible for rent supplement.

Sorry for my tenants but eff this.

On the issue of RAS...most if not all RAS contracts state that rent reviews are to take place every 2 years and the local market rate shall be used in determining the new rate. That's a legal agreement between LL and council. It would be outrageous if councils start citing the new laws as grounds for weaseling out of their side of the agreement.