Rent increase megathread

The_Conductor

jack_pearse wrote: »

Hi, I am a landlord who has never increased rents for my tenants I have for 5 years. The rent is cheap but I am happy to leave it as they are good tenants.

My question is, the apartment is in a 'rent pressure zone'...if they leave and I get new tenants will I only be able to increase the rent by 4% for the new tenants? Or since they are new tenants will I be able to agree an entirely new rent for them?

In this instance- you are limited to increasing the rent according to the formula

Length of time since last review (5 years = 60 months)
Divided by 24 (2 years)
Multiplied by 4%

60/24 * 4 = 10%

Alternatively- you could use the clause of major renovations (structural or requiring planning permission)- or vacancy (leave the unit vacant for 2 years) to extinguish the rent associated with the property.

The_Conductor

The_Conductor wrote: »

In this instance- you are limited to increasing the rent according to the formula

Length of time since last review (5 years = 60 months)
Divided by 24 (2 years)
Multiplied by 4%

60/24 * 4 = 10%

Alternatively- you could use the clause of major renovations (structural or requiring planning permission)- or vacancy (leave the unit vacant for 2 years) to extinguish the rent associated with the property.

No idea why they didn't just make the formula number of years since last review x 2 to get %.

emeldc

The_Conductor wrote: »

In this instance- you are limited to increasing the rent according to the formula

Length of time since last review (5 years = 60 months)
Divided by 24 (2 years)
Multiplied by 4%

60/24 * 4 = 10%

Alternatively- you could use the clause of major renovations (structural or requiring planning permission)- or vacancy (leave the unit vacant for 2 years) to extinguish the rent associated with the property.

Or he could just let the dust settle for a month or two and then take a chance and bang the rent up to market value. I just don't see how this rule can be enforced on LL's who were undercharging for years. It will take forever to prove what the last rent was with correspondence between RTB, LL's, tenants, revenue, bank statements all with '28 days to respond' with each letter. I think it's a nonesense and unworkable. The RTB don't have the resources or the know how.

Selik

emeldc wrote: »

Or he could just let the dust settle for a month or two and then take a chance and bang the rent up to market value. I just don't see how this rule can be enforced on LL's who were undercharging for years. It will take forever to prove what the last rent was with correspondence between RTB, LL's, tenants, revenue, bank statements all with '28 days to respond' with each letter. I think it's a nonesense and unworkable. The RTB don't have the resources or the know how.

Exactly, it ain't happening. And if anybody thinks it is please find me one (just one) rental property on Daft right now that is being offered for rent at below market value (ie tied to the new rules due to a previous tenancy with rent at below market rate). Lots of first lets and newly refurbs though - funny that!

4ensic15

Selik wrote: »

Exactly, it ain't happening. And if anybody thinks it is please find me one (just one) rental property on Daft right now that is being offered for rent at below market value (ie tied to the new rules due to a previous tenancy with rent at below market rate). Lots of first lets and newly refurbs though - funny that!

All very well until the tenant moves in, pays the asking price for 6 months and then complains to the RTB. LL could end up being made to pay back the money and be stuck with a tenant on a low rent for years. The new tenant will see post coming for the old tenant. A quick hook up on facebook and the job is oxo.

Baby01032012

Michael D Not Higgins wrote: »

Your Part 4 rights are still in effect and they cannot terminate the tenancy except under one of the allowable reasons within the law, for example, intention to sell, breach of obligations, etc. They may be able to terminate at the end of your second part 4 which will occur on the anniversary of the tenancy in 2018 but the method for this has been complicated by recent law changes.

Landlord can terminate by giving appropriate notice ahead of the end of the four year part iv anniversary once the notice ends on or after the anniversary. Reason to be given but can be for any reason. Confirmed to me by rtb.

emeldc

4ensic15 wrote: »

All very well until the tenant moves in, pays the asking price for 6 months and then complains to the RTB. LL could end up being made to pay back the money and be stuck with a tenant on a low rent for years. The new tenant will see post coming for the old tenant. A quick hook up on facebook and the job is oxo.

Yep, that could happen although it sounds rather simplistic. Not everyone is on Facebook! It would take cooperation from the previous tenant, letters back and forth etc, etc.
Even at the end of the day the if LL has to pay it all back, he's no worse off.

4ensic15

4ensic15 wrote: »

All very well until the tenant moves in, pays the asking price for 6 months and then complains to the RTB. LL could end up being made to pay back the money and be stuck with a tenant on a low rent for years. The new tenant will see post coming for the old tenant. A quick hook up on facebook and the job is oxo.

You are assuming the previous tenant would want to get involved which I can guarantee you most won't. I wouldn't entertain any contact from a person long where I did previously asking about rent etc especially if I got on well with the LL. On top of that it's assuming the new tenant who'll take a case to the RTB which is also exceptionally unlikely.

And even then it will be exceptionally difficult for the RTB to prove what the rent was prior to a new tenant moving in.

testaccount123

Noelle Most Tang wrote: »

And even then it will be exceptionally difficult for the RTB to prove what the rent was prior to a new tenant moving in.

They can just look at the data supplied on the tenancy registration form...

Browney7

It's an interesting one for letting agents.

Presumably they can't advise clients to break the law or tell clients to chance it as you'll never get caught? Landlord would have carte blanche to pursue them on foot of bad advice. They probably just look for clear confirmation from the client at the outset it's refurbed or a new let but do they have to do due diligence?

Edit: sherry Fitzgerald website has the following www.sflettings.com/rent-pressure-zones-dublin/

Claw Hammer

Noelle Most Tang wrote: »

You are assuming the previous tenant would want to get involved which I can guarantee you most won't. I wouldn't entertain any contact from a person long where I did previously asking about rent etc especially if I got on well with the LL. On top of that it's assuming the new tenant who'll take a case to the RTB which is also exceptionally unlikely.

And even then it will be exceptionally difficult for the RTB to prove what the rent was prior to a new tenant moving in.

There is no way of knowing that the new tenant won't complain, nor that the new tenant won';t get co-operation from the old one. The tenancy will have been registered at the old rent and the LL will have to produce written notices of rent increases and copies of his old lease and bank statements to prove that the rent increased from that. The LL will also have falsely stated the previous level of rent which may leave him open to criminal prosecution. It is nothing for anyone to be blasé about, thinking that no one will know.

percy212

I see a business opportunity here. I think I will put up a small website allowing tenants to report their last rental and rent paid at time of departure. Should be interesting.

emeldc

testaccount123 wrote: »

They can just look at the data supplied on the tenancy registration form...

......which might be four years old.

testaccount123

testaccount123 wrote: »

They can just look at the data supplied on the tenancy registration form...

Which could be years old thus a number with no relation to the actual rent, there may have been no figure given when registering or the tenancy may not have been registered at all previously.

The LL could also move to rooms rented separately which would disassociate the old full house rent from the new per room rent.

Claw Hammer wrote: »

The tenancy will have been registered at the old rent and the LL will have to produce written notices of rent increases and copies of his old lease and bank statements to prove that the rent increased from that.

You don't know that any of the following will be requested nor that they have to be shown particularly bank statements. It is a far more difficult task than is being made out here which is why I can see it being ignored by the majority.

emeldc

percy212 wrote: »

I see a business opportunity here. I think I will put up a small website allowing tenants to report their last rental and rent paid at time of departure. Should be interesting.

Nice one. Then LL's will just leave the property empty for two years rather than have to charge lower rents indefinitely making the supply problem even worse.

percy212

I will pm you when it's ready. Should be done by tomorrow.

emeldc wrote: »

Nice one. Then LL's will just leave the property empty for two years rather than have to charge lower rents indefinitely making the supply problem even worse.

emeldc

percy212 wrote: »

I will pm you when it's ready. Should be done by tomorrow.

Can't wait :rolleyes:

testaccount123

emeldc wrote: »

Nice one. Then LL's will just leave the property empty for two years rather than have to charge lower rents indefinitely making the supply problem even worse.

Sure they will.

Why are posters allowed to continually allowed to discuss methods to flaunt the law on this forum btw?

testaccount123

testaccount123 wrote: »

Why are posters allowed to continually allowed to discuss methods to flaunt the law on this forum btw?

There is nothing illegal with leaving a house empty for 2 years and nothing illegal about charging market rent on a house vacant for two years. There is no breaking of the law being suggested.

Michael D Not Higgins

Noelle Most Tang wrote: »

There is nothing illegal with leaving a house empty for 2 years and nothing illegal about charging market rent on a house vacant for two years. There is no breaking of the law being suggested.

Exactly, and we don't tolerate discussing breaking the law. Leaving the property empty isn't illegal and in fact doesn't make sense for most landlords.

As an example let's say an apartment is for rent at 800 and market rate is 1000. If you were to leave it empty for 2 years you are forgoing 19,200 in rent which would take 8 year to recoup but the rent increase limit is only in place for 3 years. The break even point doesn't make sense for most people to attempt.

The_Conductor

Michael D Not Higgins wrote: »

Exactly, and we don't tolerate discussing breaking the law. Leaving the property empty isn't illegal and in fact doesn't make sense for most landlords.

As an example let's say an apartment is for rent at 800 and market rate is 1000. If you were to leave it empty for 2 years you are forgoing 19,200 in rent which would take 8 year to recoup but the rent increase limit is only in place for 3 years. The break even point doesn't make sense for most people to attempt.

Depends entirely on how much below market rates the landlord allowed the rent to remain- some apartments may be not far off a grand under market rates- one development that I'm a director of asked the landlord how much they were letting their units for at the last AGM (a few weeks back- after the legislation came in). The price for a 3 bed varied from 850 all the way up to 2,200- the guy getting the 850 has had the same tenants there for almost 15 years- and hasn't modified the rent in that time (he also hasn't done any work on the property whatsoever in that time). We had plenty of other examples- which were in the 800-900 range........

It really depends- mad low rents are a bit of an outlier- but they're a lot more common than a lot of people realise- particularly among tenants who've been in units for a number of years.

FishOnABike

Browney7 wrote: »

It's an interesting one for letting agents.

Presumably they can't advise clients to break the law or tell clients to chance it as you'll never get caught? Landlord would have carte blanche to pursue them on foot of bad advice. They probably just look for clear confirmation from the client at the outset it's refurbed or a new let but do they have to do due diligence?

My experience across anumber of fields has been that professionals will frequently not ask questions it is better not to know the answers to.

Samuel T. Cogley

Noelle Most Tang wrote: »

There is nothing illegal with leaving a house empty for 2 years and nothing illegal about charging market rent on a house vacant for two years. There is no breaking of the law being suggested.

Absolutely nothing to stop LL's such as myself going feck it AirBnB for two years either. This rental cap law is complete idiotic non sense and completely counter productive.

testaccount123

Michael D Not Higgins wrote: »

Exactly, and we don't tolerate discussing breaking the law. Leaving the property empty isn't illegal and in fact doesn't make sense for most landlords.

Lying about the previous rent of the property to avoid the 4% cap is illegal and its discussion has been happily permitted.

Samuel T. Cogley

FishOnABike wrote: »

My experience across anumber of fields has been that professionals will frequently not ask questions it is better not to know the answers to.

About the only time a solicitor will make you a cup of tea!

testaccount123 wrote: »

Lying about the previous rent of the property to avoid the 4% cap is illegal and its discussion has been happily permitted.

Only in the context od debunking the idea that it's going to be easy to get around.

Michael D Not Higgins

testaccount123 wrote: »

Lying about the previous rent of the property to avoid the 4% cap is illegal and its discussion has been happily permitted.

Please report any posts you feel are crossing the line. I should have worded my post differently. There's a fine line between discussing illegal activity and discussion advocating illegal activity.

The ones I've seen mention how it would be difficult for a new tenant or RTB to know the old rent but this is not advocating breaking the law. In the same way discussion occurs on how tenants overhold isn't advocating overholding.

End of moderation discussion, back on topic now please

Claw Hammer

Noelle Most Tang wrote: »

Which could be years old thus a number with no relation to the actual rent, there may have been no figure given when registering or the tenancy may not have been registered at all previously.

The LL could also move to rooms rented separately which would disassociate the old full house rent from the new per room rent.



You don't know that any of the following will be requested nor that they have to be shown particularly bank statements. It is a far more difficult task than is being made out here which is why I can see it being ignored by the majority.

I have been to the RTB many times. Rent has to be given on registration. landlords are asked to produce rent books and banks statements frequently. This happens when they say they were not paid and the tenant insiste he did pay.
A landlord who claimed that the original rent had increased would have to produce documentation. There would be a rent book or bank statements and copies of the notice of increase to the tenants. Without that the RTB would assume that the original rent never increased.

GGTrek

Claw Hammer wrote: »

Noelle Most Tang wrote: »

Which could be years old thus a number with no relation to the actual rent, there may have been no figure given when registering or the tenancy may not have been registered at all previously.

The LL could also move to rooms rented separately which would disassociate the old full house rent from the new per room rent.



You don't know that any of the following will be requested nor that they have to be shown particularly bank statements. It is a far more difficult task than is being made out here which is why I can see it being ignored by the majority.

I have been to the RTB many times. Rent has to be given on registration. landlords are asked to produce rent books and banks statements frequently. This happens when they say they were not paid and the tenant insiste he did pay.
A landlord who claimed that the original rent had increased would have to produce documentation. There would be a rent book or bank statements and copies of the notice of increase to the tenants. Without that the RTB would assume that the original rent never increased.

If rent is really very much below market rate, then I agree that the landlord is screwed with the new law if new tenant takes it to the RTB since it easy to ask for bank statements. However if it is just 15-20% below market, then it is very easy and legal with a new lease to put absolutely every expense and tax (except income tax, USC, wear&tear repairs and insurance) on the shoulders of the new tenants as conditions of the new lease. Nominal rent will only be increased by the new formula, but real net rent which is what matters to the landlord will increase substantially (I have done some calculation it could be 10% or more on a freehold property and 20% more on a leasehold property).

The RTB will have a hard time to find that the conditions above are illegal, since the RTA allows the parties in a new lease to negotiate who is paying all sorts of expenses (think about management fees in a leasehold property!) except the ones I mentioned above. What the Irish govvie should do is to stop meddling, set a minimum length for a tenancy that cannot be broken by either party without paying penalties, rent review capped to inflation rate for the length of tenancy and when the tenancy ends the parties are free to negotiate the new terms as they see fit without any government interference on the rent level. I doubt it will happen.

syndrome777

Two-thirds of rented homes now failing to meet basic standards
http://www.independent.ie/irish-news/twothirds-of-rented-homes-now-failing-to-meet-basic-standards-35481229.html

This would be pointed out and should be good enough reason to fight any rent increase, even 4%. It should be better regulated and it should affect how the rent are increased or decreased, Not just supply and demand.
It's always just LL's statements that rent's are below market as an excuses to increase the rent, but what about standards??


"The Government has promised to increase funding for local authorities to increase the number of inspections, but not until 2018."
maybe there's a hope.

But I think it should be close connected andinspected with rent increase.

emeldc

Two out of every three homes inspected by local authority staff fail to meet minimum standards amid growing unease about tenants being exploited by unscrupulous landlords.
Official figures reveal that not one privately rented home in Dún Laoghaire, Kilkenny, Limerick or Offaly was considered to be suitable for letting, with a failure rate of 50pc or more in 22 city and county council areas.

Somebody in the Indo had nothing else to do and decided to make some sh1t up.