Residential tenancies bill 2016 proposals and discussion

beauf

Seems to me that all LL will now put up their rent to the market rate before this is enacted.

Browney7

c montgomery wrote: »

No different tax on shares, 30% capital gains tax as opposed to 52% on rental for many landlords

Yet income tax is paid at marginal rate on the dividends

DubCount

This is madness.

2 rental houses next door to each other can be forced to have vastly different maximum rents.

Landlords who have given discounts to good tenants are penalised.

It may make sense to evict a good tenant, "renovate the property" for a couple of months, and re-let it.

It may make sense to evict a good tenant, sell the property, and buy a similar property and let the new property at full market rental rates.

Selik

How would this work if somebody bought an apartment to rent out currently in one of the newly designated RPZ areas - could the new owner rent at market rates or would they be locked into the previous rent?

If that's the case that's crazy and will of course affect the value of said apartment.

You could have a case where 2 identical apartments beside each other in similar condition are valued at a vast difference purely on the basis of the rental yield, which is logical but in this case an enforced yield.

Alot of this doesn't sound like it's been thought through but no doubt there will be alot more detail to come.

_Kaiser_

Few things....

- This is still in discussion stage. It's not law (yet!) and given FF's statement that they won't support it and the outcry since the announcement, it's highly unlikely IMO to proceed as planned

- We all recognize that SOMETHING significant has to be done to address the crisis. More supply that is both suitable to demand and where it's needed is key (and urgent!), but equally reform of the rental sector is long overdue to provide security and stability for tenants, and similar security and supports for LL's to deal with problem tenants or situations

- The notion that becoming a small-time LL (intentionally or otherwise) = PROFIT needs to die. We as a country REALLY need to get over this obsession with property! Like it or not, the future of rental is likely huge letting agencies not private owners. FG are pro business. They've already (through NAMA) sold off a lot of residential stock to foreign investment/vulture firms. Their "tinkering" in the last 12 months shows no sign that this policy will be reversed. If you want to build a nest-egg or revenue stream, renting property out is not for you IMO

beauf

Because big companies will be more caring and sympathetic? Good luck with that.

_Kaiser_

beauf wrote: »

Because big companies will be more caring and sympathetic? Good luck with that.

I didn't say that, but the reality is that's where it seems to be going - if we had a Government actually interested in dealing with the crisis, they'd make sure the proper steps and regulations were in place to ensure that tenants don't get screwed over.

Besides, you only need to look through this forum to see the attitude from many small LL's... only interested in their investment, for as little effort as possible and with as fast a turnaround as necessary when required - and while I can sympathise and agree that there most definitely needs to be more effective and quicker ways to deal with problem tenants, the attitude some posters here have to people on rent assistance for example (or tenants in general) is frankly disgusting... I don't care if you've been burned before. That's the risk you take (just as a tenant often gets stuck with a cowboy LL). If you don't like that, get out of the market.

beauf

_Kaiser_ wrote: »

... If you don't like that, get out of the market.

Well they are. We're at the lowest rental stock on record.
Stock of property available to sell at lowest point on record.
Govt has built the lowest amount of social housing, since the 70's.

Encouraging LL to leave and stripping them of all rights, while tenants get more protection every time. They'll be well protected but homeless.

newacc2015

_Kaiser_ wrote: »

Besides, you only need to look through this forum to see the attitude from many small LL's... only interested in their investment, for as little effort as possible and with as fast a turnaround as necessary when required - and while I can sympathise and agree that there most definitely needs to be more effective and quicker ways to deal with problem tenants, the attitude some posters here have to people on rent assistance for example (or tenants in general) is frankly disgusting... I don't care if you've been burned before. That's the risk you take (just as a tenant often gets stuck with a cowboy LL). If you don't like that, get out of the market.

So the 'professional landlords' who are ensuring most good tax accountants and dodgy big 5 tax lawyer in Dublin is out the door with business ensuring they pay close to zero tax is more ethical and compassionate than a mom and pop landlord? That is a good one.

Irish people dont seem to realise a private fund or REITs sole purpose is to make as much profit as possible. A tax dodging fund isnt going to make the housing market any better. A Texan REIT isnt going to say to their shareholders (who they are accountable to ) we arent going to maximise your profits and instead we going to turn our luxury apartments into housing projects aka social housing.

Realistically in pretty much every other European country, housing for low income people is provided by the state. Here private landlords are expected to it. Landlords are getting out of the market in massive numbers and they arent getting back into it. These regulations will reduce housing available for RA tenants, not increase it

Sad Professor

FF support this in principle, they just don't think it goes far enough. Same with the other parties. So I think this will pass with some changes. FF can't afford to look weak on rents with SF sitting next to them. In fact, I'd say FF are the reason we're even talking about this now. Noonan was probably about to cripple this like he did Kelly's plan until FF said they'd bring forward their own bill.

I support regulation of the rental market but this is messy. And without proper security of tenure it's going to cause problems for tenants. However, once it's implemented it's going to be very difficult to get rid of. They'll have to tweak it like other European countries until it works. And LLs will have to be made to play ball. In that sense it's a positive change but probably an unstable one in the short term. I never thought FG of all parties would be ones to bring in rent control!

I've no doubt it will drive a lot of small landlords out of the market, but I think FG is cool with that. A lot of these LLs were eyeing up the exit anyway. Most of them will be replaced by bigger investors with no where else to put their money, as has already been happening. The small landlord lobby have been making a poor case the last several months. All bluster and false claims that the census data disproved. That said, I don't welcome FG's idea of "professional landlords" and build-to-rent, which I worry will lead to US-style renting.

The fundamental problem with government housing policy is FG's commitment to increasing house prices. People keep attributing this to stupidity but it's deliberate and consistent with the last 40 years of government housing policy. That's why rent controls are necessary and most likely here to stay.

rossmores

murphaph wrote: »

This new build studio flat is perfectly legal in Germany. It would be illegal in Dublin (no dual aspect and too small). This sort of thing suits so many people that do not need much space and certainly don't need a dual aspect. Allowing developers to build such units would alleviate the situation. But instead we get more nonsense.

Yeah the 2 ring hob is illegal here, you can thank the green party for that one, of example party politics playing to an a gullible audience

_Kaiser_

newacc2015 wrote: »

So the 'professional landlords' who are ensuring most good tax accountants and dodgy big 5 tax lawyer in Dublin is out the door with business ensuring they pay close to zero tax is more ethical and compassionate than a mom and pop landlord? That is a good one.

Again, read what I said. I didn't say that big letting companies were more ethical or compassionate.. But trying to make out now that small time landlords are innocent victims of government policy after years of effectively unregulated wild west antics by many of them is a bit rich. This forum is filled with reports of such antics by those who think/want "second property + minimal effort = profit!" and it seems to be those type who are most put out by this.

There's a need to improve both sides to effectively deal with both problem landlords AND problem tenants and we NEED a viable stable and indeed desirable rental market (because not everyone CAN own property), but the reality currently seems to be that the small time landlord is no longer wanted by the policy makers - for better or worse - and everyone needs to adjust to that.

Graham

_Kaiser_ wrote: »

after years of effectively unregulated wild west antics by many of them is a bit rich. This forum is filled with reports of such antics by those who think/want "second property + minimal effort = profit!" and it seems to be those type who are most put out by this.

One of the many things your sweeping generalisations are missing is the thousands upon thousands of small landlords who don't give their tenants cause to post in this forum.

newacc2015

_Kaiser_ wrote: »

Again, read what I said. I didn't say that big letting companies were more ethical or compassionate.. But trying to make out now that small time landlords are innocent victims of government policy after years of effectively unregulated wild west antics by many of them is a bit rich. This forum is filled with reports of such antics by those who think/want "second property + minimal effort = profit!" and it seems to be those type who are most put out by this.

There's a need to improve both sides to effectively deal with both problem landlords AND problem tenants and we NEED a viable stable and indeed desirable rental market (because not everyone CAN own property), but the reality currently seems to be that the small time landlord is no longer wanted by the policy makers - for better or worse - and everyone needs to adjust to that.

So a faceless REIT or private equity is a better alternative? What you are really suggesting is 'distressed property + minimal effort + dodgy companies to make rents tax free = lots of profit' is better for tenants and society? You are not saying big companies are better, just small landlords are bad? I am sure we will get a flavour of how amazing REITs are in a few years. There are some bad landlords, there are also some very bad tenants. We had plenty of landlord regulation for the last 12 years. There is almost none for tenants.

A faceless pension fund who bought property for half of what it is now worth and is not paying taxes are hardly going to say these policy changes are bad for them? They dont want spotlight. I sure small landlords would be delighted with these changes if they were entitled not to pay any taxes like REITs or S110 companies.

You fail to realise most people in housing provided by small landlords( I would imagine 95% of private rentals are owned by them). REITs dont own outside of Dublin really. It will only be for worse when landlords start selling thousands of houses. You can be sure REITs arent interested in buying them.

amens

If I do a rent review immediately increasing the rent from €1000 to €1100 with the increase not coming into effect for 90 days what is the current rent (that is effectively frozen) from the point of view of new legislation enacted next week, €1000 or €1100?

handlemaster

Any landlord charging below open market rental value if they can should move to the market rate now. Nothing for landlords about tenants who dont pay or are anti social. Again this government move is populist and misses a real problem in the market

judeboy101

Can someone explain how a LL can charge what he likes on one side of a street but on the other side of the road its capped at 4%? Surely that's unconstitutional?

April 73

I have tenants who have just come out of a Part IV tenancy. In theory my best bet would be to issue notification to leave, do a repaint, refurb job & rent it out at a far higher rate next year.

I'm not going to do that though because they are decent tenants, I don't want the hassle & I will lose 52% of the rental increase to the taxman.

I'm probably not looking at this with a cold eye on business & my own pocket though.

However I will be issuing a rent review today or tomorrow with the rent going up to about 85% of the market rate. Three years of max 4% raises is a long time to be significantly below market rate if I don't act now.

The whole arena is a mess & constant interference is making it worse. REIT property owners are the future but I don't see that as a good thing for renters in the long term.

April 73

judeboy101 wrote: »

Can someone explain how a LL can charge what he likes on one side of a street but on the other side of the road its capped at 4%? Surely that's unconstitutional?

Likewise some tenants are in a very lucky position with rents capped at well below market rates. Others who moved in the last 12-18 months are capped at a much higher rate.

Why is a landlord capped in Dublin 15 but ten miles out in Meath free to raise rents to market rate?

There are inequities all around with this.

judeboy101

April 73 wrote: »

Likewise some tenants are in a very lucky position with rents capped at well below market rates. Others who moved in the last 12-18 months are capped at a much higher rate.

Why is a landlord capped in Dublin 15 but ten miles out in Meath free to raise rents to market rate?

There are inequities all around with this.

10 miles? I can think of a couple of places in south and west Dublin where there are housing estates a 100ft apart but in different "pressure zones"i.e dub/kildare, dub/wicklow.

Lumen

I don't see the problem with indefinite tenancies and asymmetrical rights in favour of the tenant.

There's a parallel with employment law. My business employs people who can give notice to quit at any time. I cannot do the same. I can sell the business but that doesn't affect their employment rights - someone else takes over (TUPE). If they violate the terms of their contract I can get rid of them, eventually, but it's not easy and neither should it be.

I can't make them redundant and employ my children in their place. If my children want a job they can get one on the open market.

None of this makes me want to run to the supreme court whining about my constitutional rights to operate the business I own.

I do wonder how many landlords would survive running a real business.

The biggest problem seems to be the slowness of the dispute resolution process, but that's an issue of enforcement of rights and responsibility, not the rights themselves.

newacc2015

Lumen wrote: »

I don't see the problem with indefinite tenancies and asymmetrical rights in favour of the tenant.

There's a parallel with employment law. My business employs people who can give notice to quit at any time. I cannot do the same. I can sell the business but that doesn't affect their employment rights - someone else takes over (TUPE). If they violate the terms of their contract I can get rid of them, eventually, but it's not easy and neither should it be.

I can't make them redundant and employ my children in their place. If my children want a job they can get one on the open market.

None of this makes me want to run to the supreme court whining about my constitutional rights to operate the business I own.

I do wonder how many landlords would survive running a real business.

The biggest problem seems to be the slowness of the dispute resolution process, but that's an issue of enforcement of rights and responsibility, not the rights themselves.

So as a business owner you would have issue with the Government telling you can't increase the price of your widgets? That for the next 4 years regardless of your costs, you price is capped. Do you have no issue with the state telling you can't earn a profit for the next 4 years? Because the state is basically saying that to landlords.

I would like to see how many business owners would be comfortable being 300k in debt and the Government telling them their price is fixed for the 4 years regardless of input costs. Your rather condescending tone implies rental properties are not businesses and aren't run properly, when the neither is true. It is very hard to run a business where your taxation and other regulations change dramatically every 2/3 years.

murphaph

beauf wrote: »

Seems to me that all LL will now put up their rent to the market rate before this is enacted.

Not just market rate but the very very top of what could be considered market rate. And then there will be LLs who get caught out by the timing and be locked into 4% increases off a less than market rate base. It's grossly unfair. That same property is in RAS and the contract ends next summer and will not be renewed from my side.

The_Conductor

Looks likely that the bill will be withdrawn- FF have indicated they are in favour of far stricter regulations- in agreement with many of the smaller parties- and several government back benchers are in agreement...........

Lumen

newacc2015 wrote: »

So as a business owner you would have issue with the Government telling you can't increase the price of your widgets? That for the next 4 years regardless of your costs, you price is capped. Do you have no issue with the state telling you can't earn a profit for the next 4 years? Because the state is basically saying that to landlords.

The government doesn't interfere with the pricing of my widgets but it does regulate the pricing of my employees. I can't just reduce their salaries if market conditions change.

newacc2015 wrote: »

I would like to see how many business owners would be comfortable being 300k in debt and the Government telling them their price is fixed for the 4 years regardless of input costs.

Nobody forced them to engage in highly leveraged property investment.

newacc2015 wrote: »

Your rather condescending tone implies rental properties are not businesses and aren't run properly, when the neither is true.

Many are not run professionally. I think this is a problem.

newacc2015 wrote: »

It is very hard to run a business where your taxation and other regulations change dramatically every 2/3 years.

Yes, running a business is hard.

murphaph

newacc2015 wrote: »

You fail to realise most people in housing provided by small landlords( I would imagine 95% of private rentals are owned by them). REITs dont own outside of Dublin really. It will only be for worse when landlords start selling thousands of houses. You can be sure REITs arent interested in buying them.

Yeah few REITs will be interested in houses, where I'd wager most Irish tenants still live. These RPZ measures of course won't apply to most of the land mass of the state but the other measures will and combined are more than enough to drive these LLs out of the business too, leaving no alternative for many.

The way they are applying the RPZs by local authority area is also clearly madness. Does Leixlip really face significantly less upward pressure on rents than Lucan?! Clonee less than Balbriggan??!! This sort of thing is handled by postcode in Germany.

murphaph

Lumen wrote: »

I don't see the problem with indefinite tenancies and asymmetrical rights in favour of the tenant.

There's a parallel with employment law. My business employs people who can give notice to quit at any time. I cannot do the same. I can sell the business but that doesn't affect their employment rights - someone else takes over (TUPE). If they violate the terms of their contract I can get rid of them, eventually, but it's not easy and neither should it be.

I can't make them redundant and employ my children in their place. If my children want a job they can get one on the open market.

None of this makes me want to run to the supreme court whining about my constitutional rights to operate the business I own.

I do wonder how many landlords would survive running a real business.

The biggest problem seems to be the slowness of the dispute resolution process, but that's an issue of enforcement of rights and responsibility, not the rights themselves.

Do you have to wait a year to fire a stealing employee?

4ensic15

judeboy101 wrote: »

Can someone explain how a LL can charge what he likes on one side of a street but on the other side of the road its capped at 4%? Surely that's unconstitutional?

Arguably so.
In the matter of Article 26 of the Constitution and in the Matter of The Housing (Private Rented Dwellings) Bill , 1981.

2. That, in the absence of any justification permitted by the Constitution, the provisions of s. 9 of the bill, depriving the persons affected thereby of substantial portions of their proper rents, constituted an unjust attack on their property rights contrary to Article 40, s. 3, sub-s. 2, of the Constitution.

Yourself isit

newacc2015 wrote: »

So a faceless REIT or private equity is a better alternative? What you are really suggesting is 'distressed property + minimal effort + dodgy companies to make rents tax free = lots of profit' is better for tenants and society? You are not saying big companies are better, just small landlords are bad? I am sure we will get a flavour of how amazing REITs are in a few years. There are some bad landlords, there are also some very bad tenants. We had plenty of landlord regulation for the last 12 years. There is almost none for tenants.

A faceless pension fund who bought property for half of what it is now worth and is not paying taxes are hardly going to say these policy changes are bad for them? They dont want spotlight. I sure small landlords would be delighted with these changes if they were entitled not to pay any taxes like REITs or S110 companies.

You fail to realise most people in housing provided by small landlords( I would imagine 95% of private rentals are owned by them). REITs dont own outside of Dublin really. It will only be for worse when landlords start selling thousands of houses. You can be sure REITs arent interested in buying them.

A faceless professional landlord who isn't looking for cash for a 1600 per month property, doesn't kick people out to give the house to Tommy junior, or pops around to let themselves in every so often would be am advantage to many tenants.

The_Conductor

Yourself isit wrote: »

A faceless professional landlord who isn't looking for cash for a 1600 per month property, doesn't kick people out to give the house to Tommy junior, or pops around to let themselves in every so often would be am advantage to many tenants.

However- they may decide to divest after a set period (one of the REITs has a published list of developments they own that they intend to sell by 2020- returning the funds to their investors)- and entire communities may be forced to move because of this (look at Tyrrelstown for example).