Residential tenancies bill 2016 proposals and discussion

The_Conductor

blackcard wrote: »

You will always find cases where a landlord loses out but the vast majority of them are doing fine. If they have a problem now, it is because of some landlords gouging.
Why would many landlords throw in the towel when they can increase rents by12% over the next 3 years

Read the regulation- its 4% at each 2 year review- i.e. 2% per annum- not 4% per annum- its 4% per review.

titan18

The_Conductor wrote: »

There will be no more Mr. Nice Guy in future- and if there are commensurate rules brought in to protect landlords against tenants who overstay, don't pay their rent and/or damage property- landlords won't feel the need to give tenants deals to protect themselves from unknown tenants.

There are a cohort of tenants out there- as indeed, there are a cohort of landlords- who know how to play the system to their advantage.

The current legislation is lopsided in the extreme- there has to be commensurate safeguards built-in for landlords- alongside a financial incentive not to exit the market. As it stands- the legislation is simply painting a significant number of landlords into a corner- and they may very well decide to abandon the sector- and either sell properties, or leave them vacant for a period while they decide what they're going to do.

There will be no more Mr. Nice Guy in future- there shouldn't have been in the past- but there also shouldn't have been 25% rent increases............

Of interest- if market rents falls (aka we are ramping up supply side solutions adjacent to this- its predicted we'll construct 18,500 units in 2017- and possibly as many as 25,000 units per annum by 2020)- and supply reaches a stage that it outstrips demand (which is foreseeable)- will rent falls also be limited to 4% per 2 years- and if they are- will tenants kick up a fuss that rents aren't falling fast enough? Keep in mind between 2007 and 2008- national rents fell by 38% (that was the most extreme fall) and continued to fall for some further years. Rents were moderating even before these measures- however, the Minister is prescribing an increase- which come hell or high water- will be applied. Will there be a commensurate stickiness restricting falls to the selfsame 4% every 2 year review?

I'll put all my money on a No to that question. If we also have a period of hyper-inflation, landlords are fcuked too

blackcard

The_Conductor wrote: »

Read the regulation- its 4% at each 2 year review- i.e. 2% per annum- not 4% per annum- its 4% per review.

My bad. I think 4% per annum would be reasonable to all parties.

murphaph

testaccount123 wrote: »

They'll increase by 4% if the demand is there. If it isnt it wont. Its bloodly ridiculous having to listen how landlords feelings have been hurt every time the government moves to change regulations in the housing market. You dont get Vodafone issuing self-pitying statements about how they were being really nice before and now they have extra costs when mobile phone regulations are changed. Its like listening to a bunch of children.

If the German experience of rent control is anything to go by there will never be a reduction in rents going forward. The whole market will now move as one at a steady 4% a year for fear of losing pace with the next guy.

Sad Professor

The_Conductor wrote: »

Read the regulation- its 4% at each 2 year review- i.e. 2% per annum- not 4% per annum- its 4% per review.

Huh? It's 4% per yearly review in the pressure zones. Or 12% over 3 years.

4ensic15

The_Conductor wrote: »

Read the regulation- its 4% at each 2 year review- i.e. 2% per annum- not 4% per annum- its 4% per review.

Isn't the review period reducing to 1 year in the new regime in the controlled areas?

Kapips88

Now all landlords outside the pressure zones will endeavour straight away to get their rent as high as they can as fast as they can for fear that they are the next they are next victims of this blunderbus.

Bif

Have the details of what is been proposed been written down / available to read anywhere yet?

murphaph

Kapips88 wrote: »

Now all landlords outside the pressure zones will endeavour straight away to get their rent as high as they can as fast as they can for fear that they are the next they are next victims of this blunderbus.

Oh yes. I hadn't even considered that but I'd be nervous if I had property in the commuter belts and I'd be pushing right up to the max that could be considered legal before this government makes its next move. It's actually a certainty that this will happen forthwith.

There's x amount of rental money in Dublin and surrounding areas. Limiting the amount of it that can be taken in County Dublin means more is available in surrounding areas. This would have happened anyway but landlord fear will play just as big a role.

handlemaster

So what is it 4% per year after this two year fixed is up

godwin

The one thing I have taken from this discussion is that the majority of landlords think they are good/fair landlords, their apartment/houses are all top spec and they charge fair rent. My 18+ years of being a renter would lead me to believe the opposite is true.

4ensic15

godwin wrote: »

The one thing I have taken from this discussion is that the majority of landlords think they are good/fair landlords, their apartment/houses are all top spec and they charge fair rent. My 18+ years of being a renter would lead me to believe the opposite is true.

Equally most renters believe they are perfect, paying far too much and their home is a kip provided by an indifferent landlord.

mattser

4ensic15 wrote: »

Equally most renters believe they are perfect, paying far too much and their home is a kip provided by an indifferent landlord.

The ones that ring you when their pack of j-cloths have run out.

GGTrek

Bif wrote: »

Have the details of what is been proposed been written down / available to read anywhere yet?

Please read the very first post on this thread, there is a link to the Oireachtas documentation and amendments: it is still valid, if you want to know the newest government blunders, read the documents with the newest date.

The_Conductor

As with everything on the internet- you only hear the best case, and the absolutely worst case- stories. So all the stories you'll hear of landlords feature scrooges who run hovels- and your stories of tenants- non-paying, overholding, property destroying psychopaths, who also pick fights and altercations with neighbours, and lodge spurious RTB cases when their tenancies end, to draw out the eviction process.......

The norm- is something less spectacular, and indeed, boring- where the tenant has a largely peaceful enjoyment of their home, pays their rent on time- and when something major goes wrong- it is promptly dealt with by the landlord or their agents.

All the current legislation and the proposals do- is try to leverage public disquiet about the lack of housing in the country- and finds a scapegoat- landlords- and blames them for the abject lack of housing supply (which thankfully is slowly righting itself).

The nature of the designated zones- and the manner in which they are prescribed- mean if rental inflation in the rest of the country outstrips that in the designated zones for the first two years of operation- its entirely plausible that in two years time the zones may feature Portlaoise, Carrick-on-Shannon, Boyle and Raphoe- but not Cork, Galway, Dublin and its hinterlands, Waterford (or Kilkenny which has been mentioned a few times this morning on the radio- why, I'm not sure).

The proposals- have been framed as a temporary solution- in the same manner that the 2 year freeze on rent reviews- was also a 'temporary measure' to get around property considerations in the constitution.

Minister Coveney is bringing in these proposals- safe in the knowledge that he is booting the problem another 2 years down the road- at which stage he is hoping that supply will have come back on stream, and market economics will determine prices stagnate, or even fall. Its not a solution to anything- its a sticking plaster that gives him airtime to blow his own trumpet- and come across like a good guy- and presumably, sets him up for a leadership challenge against Kenny, when the time comes.

The whole thing is smoke and mirrors- its not going to deliver anything for either landlords or tenants- other than this mythical 'rent certainty'- if tenants know their rent is going to up 4% per annum, sure- thats certainty- but you can be damn sure the self-same tenant's salaries aren't increasing by 4% per annum- so the only certainty in that situation is that they are worse off. From a landlords perspective- the value of their property has effectively been devalued- and its harder to sell their property- all the while its harder to deal with delinquint, dangerous, non-paying or over-holding tenants- so there is nothing for them either.

Quite singularly- when the cold light of day is allowed cast its light on the workings of the new legislation- it will be seen as further meddling in the market- achieving nothing of consequence for either landlords or tenants- and its most lasting achievements will most probably be that the RTB becomes a more powerful quango that remains by and large unanswerable to anyone at all- which isn't going to help anything.

We need reform of the sector- certainly- however, even more so than anything at all else- we need massive new supply of residential units in the sector- which the increases in property prices is finally kickstarting (I never thought I'd say its good to see Bernard McNamara building in Dublin again- but by god it is).

This legislation- is a helpful distraction until finally volume production of residential units is ramped up- and whenever anyone mutters or moans about it- the Minister and his people will point at the legislation and say you have to give it a chance- when its in actual fact a white elephant in the corner of the room- designed to get people's attention- when the magician is practising his sleight of hand in the order corner- readying his next magic trick to awe the audience.

I'm sorry for being so cynical- its hard not to be- when you've been involved in the consultative process 3 times over the last 20 years- you've seen all manner of promises come and go, and ultimately when a new government gets voted in- they will simply point at the old legislation and say that its old legislation from a different government that they can't stand over. I've been there, done that- so many different times at this stage- I have zero faith in the government's ability to deliver meaningful change that works- I do however fully believe that the market itself will drive change- but it needs another 2-3 years to get its act together, and this white elephant is going to provide that breathing space.

The government must be so relieved it doesn't feature on the list of 8 EU countries which the Commission listed as having overheating property markets- how they avoided this list- I don't think I'll ever fully know- they got lucky.

Lumen

The_Conductor wrote: »

The government must be so relieved it doesn't feature on the list of 8 EU countries which the Commission listed as having overheating property markets- how they avoided this list- I don't think I'll ever fully know- they got lucky.

Because Ireland is not Dublin.

The median Irish property price is about 200k (judged by recent PPR transaction data).

The_Conductor

Lumen wrote: »

Because Ireland is not Dublin.

The median Irish property price is about 200k (judged by recent PPR transaction data).

Its not based on median prices- its based on national average price increases in the preceding 12 months. The percentage increase outside of Dublin vastly exceeds the percentage increase in the greater Dublin area. The percentage increase in the greater Dublin area- actually moderated our national average.

Lumen

The_Conductor wrote: »

Its not based on median prices- its based on national average price increases in the preceding 12 months. The percentage increase outside of Dublin vastly exceeds the percentage increase in the greater Dublin area. The percentage increase in the greater Dublin area- actually moderated our national average.

That's only one axis. The other is "valuation gap".

Kapips88

http://www.rte.ie/news/2016/1216/839365-rent-legislation-dail-debate/

http://www.independent.ie/business/personal-finance/property-mortgages/landlords-will-attempt-to-dodge-new-rules-to-cap-rent-increases-35295999.html

It looks like there will be a fight on this.

Irish Property Owners Association membership will swell.
Maybe theyll do a go fund me to fight this through the courts too.

My friend has decided to cut his agent loose. He was paying the agent 10% for managing the property. Now he is looking into how to cut the agent out of it because he needs to up the income from his apartment in some way.

I dont know if he can cut the agent out since the tenant they got is in the apartment just under two years, but he is definitely looking into it.

Someone else told me they joined the Irish Property Owners Association and he is cutting his agent out too.

He said if he ever uses an agent again it will be the tenant making their own arrangement and paying the agent for their services over and above the base rent. Agent fees will not be included in the rent and if the agent wants to be paid they will have to get paid from the tenants.

All sorts of other charges mentioned too that he normally pays which he will be looking into passing on to the tenant over and above the baseline rent.

Maybe every LL in the country should now join Irish Property Owners Association and fund them to fight this joke.

Be interesting to see what comes out of this.

handlemaster

Would be in favour of the international system that tenant pays for the initial agents fee.

The_Conductor

handlemaster wrote: »

Would be in favour of the international system that tenant pays for the initial agents fee.

Most agents charge a flat 10% of gross monthly rent for 'property management' and 'tenant management'. Wonder would this be seen as a rent increase- if the tenant had to pay it instead of the landlord. Also- while we're at it- in any other country- property tax- is paid by the tenant- as it goes directly towards funding local resources, facilities and amenities. Come to think of it- the management fees for apartments- probably do too.......... So- if a landlord were to pass all of these directly onto the tenant instead- they could potentially up their net income by 3 or 4k per unit (depends entirely on how much these come to of course).

I don't think it could be argued that a tenant paying these is unfair- its the norm elsewhere?

I guess the IPOA is going to see a massive membership boost.

Sarn

The only thing about tenants paying the management fees would be their demand to see the accounts and to have a say as to how the fees are spent. I think that would only be reasonable if you are contributing to the overall maintenance of a complex.

The_Conductor

Sarn wrote: »

The only thing about tenants paying the management fees would be their demand to see the accounts and to have a say as to how the fees are spent. I think that would only be reasonable if you are contributing to the overall maintenance of a complex.

Let them join a residents committee who would meet with Mgmt Company representatives perhaps every 2 months or so- and anything that is happening in the complex could be brought to their attention- and ongoing priorities fine tuned?

athtrasna

The_Conductor wrote: »

Let them join a residents committee who would meet with Mgmt Company representatives perhaps every 2 months or so- and anything that is happening in the complex could be brought to their attention- and ongoing priorities fine tuned?

I'd be 100% against that. It's not what I signed up for when I bought in a managed development. Tenant and owner priorities are very different.

murphaph

Here in Germany the tenant used to pay the agent's finders fee but this was outlawed last year. Peculiarly the buyer of a property still pays tge agents hefty fees (in some states it's shared) but this will be outlawed soon too to force the seller to pay. Expect mass extinctions of estate agents.

Here also tenants do pay a good portion of the management fees. The law makes clear what can be passed on and what can't.

For example, routine servicing of the lift can be passed on but if the lift breaks down and needs spare parts, this cannot. Insurance cannot be passed on, while charges for cleaning communal areas can.

Each year I get a statement from the management company and each item has an asterisk if it can be passed on. This is entirely fair as these costs are not in the landlord's direct control, so the tenant is not insulated from them. In my case roughly half the management fees can be passed on and the rest is entirely tax deductible.

Also typical here is the small repairs clause, which stipulates that the tenant is responsible for the first €410 of any repairs to items the tenant physically touches, eg a broken tap or door handle, but not the circulation pump for the heating system etc.

You'll notice none of this was legislated for this week. Just the bold landlords.

The_Conductor

athtrasna wrote: »

I'd be 100% against that. It's not what I signed up for when I bought in a managed development. Tenant and owner priorities are very different.

True- however, residents might be aware of little niggly things- like blown lights, sensors in the carpark not working properly, illegal parking etc- that the management company might not necessarily be aware of.

I know what you mean- I was trying to think of a way of packaging it so that the tenants had some input (whether or not their input meant anything or not- is entirely a different matter).

The management charges are an allowable cost for landlords anyway- so the net cost is half the headline price- so perhaps its not the most pressing thing in the world- though they do all add up........

The big non-allowable cost- is property tax- which as its a tax which is spent in the locale- its very easy to justify the tenant paying it.

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.

Pilly look at the latest news:
http://www.rte.ie/news/2016/1216/839365-rent-legislation-dail-debate/
Approved at the Dáil and expected to be approved at the Senad next Wednesday when it will become immediately effective. I did tell you it was a Christmas present to the media. Not a nice present to the tenants however because the unexpected side effects of this joke will be big for many tenants.

handlemaster

athtrasna wrote: »

I'd be 100% against that. It's not what I signed up for when I bought in a managed development. Tenant and owner priorities are very different.

Management fees are passed on in other countries plus agents fees. Tenant doesnt get a say on how the management company is run.

Nothing to stop landlords doing that here. It could start with new let's or upon rent renewal.

The_Conductor

I particularly like Murphaph's description of how it is handled in Germany- it really sounds like a good way to go.

I do agree with Athtrasna too though- the tenant does get to say how the complex is run- and shouldn't.

blackcard

The_Conductor wrote: »

Read the regulation- its 4% at each 2 year review- i.e. 2% per annum- not 4% per annum- its 4% per review.

I think my interpretion as right