Potentially selling apartment? what to include in interim rental contract?

mauraf

Hi

We have an apartment let in Dublin 15 - that we are contemplating selling within the next 12 months.
The tenants we have in there at the moment have been there 1 year - and are due to have their contract renewed in the next couple of weeks.

Given we potentially may sell in the next year - do we have to change anything in the contract or are we ok to quote the 1 months notice ( as stipulated in the contract)? We would plan on giving them alot more if we did decide to sell...

Thanks

Maura

Victor

mauraf wrote: »

and are due to have their contract renewed in the next couple of weeks.

There is no need to renew the contract - just continue as you are. If they sign on for another 12 months, you can't ask them to leave in those 12 months.

Buyers are slow to buy occupied properties.

Baby01032012

mauraf wrote: »

Hi

We have an apartment let in Dublin 15 - that we are contemplating selling within the next 12 months.
The tenants we have in there at the moment have been there 1 year - and are due to have their contract renewed in the next couple of weeks.

Given we potentially may sell in the next year - do we have to change anything in the contract or are we ok to quote the 1 months notice ( as stipulated in the contract)? We would plan on giving them alot more if we did decide to sell...

Thanks

Maura

Hi they are going to there more than one and less than 2 years it's 6 weeks notice. Don't enter another fixed term as you will be stuck with that will not be able to give notice before that term ends. Just leave it as Part IV and talk to them about your intentions. Then they may be more willing to facilitate viewings which they don't have to.

mauraf

Thanks for your replies!

Still a bit up in the air as to whether we will sell yet. Its in a good up and coming area, and will have the new Luas connection before the year is out - so trying to figure out when would be good to sell and pay off mortgage on our house! Hard to judge!
They are good tenants, but they are aware they are renting for way below the market price ( about 300e per month cheaper than what we could demand) - so am hoping, if we do decide to sell, they will be amenable enough to ease that process.

Re not giving the Fixed term - should we just do 6 months and reassess then??

Doctor Nick

mauraf wrote: »

Thanks for your replies!

Still a bit up in the air as to whether we will sell yet. Its in a good up and coming area, and will have the new Luas connection before the year is out - so trying to figure out when would be good to sell and pay off mortgage on our house! Hard to judge!
They are good tenants, but they are aware they are renting for way below the market price ( about 300e per month cheaper than what we could demand) - so am hoping, if we do decide to sell, they will be amenable enough to ease that process.

Re not giving the Fixed term - should we just do 6 months and reassess then??

Don't enter into another contract at all. They will acquire part 4 rights and you are not tied into any fixed term. Just carry on as normal, don't get anything signed that you will have to stick to.

Victor

mauraf wrote: »

Its in a good up and coming area, and will have the new Luas connection before the year is out - so trying to figure out when would be good to sell

Assuming the Luas launch will be successful, I would sell after the launch.

They are good tenants, but they are aware they are renting for way below the market price ( about 300e per month cheaper than what we could demand)

Note that you are limited to an increase of 4% per year. You need to give proper notice of any increase.

Fian

Victor wrote: »

Assuming the Luas launch will be successful, I would sell after the launch.

Note that you are limited to an increase of 4% per year. You need to give proper notice of any increase.

So is the purchaser. Having a tenant on €300 below market incentivises them to resist the sale, not to facilitate it. The current rent also limits the purchaser in a rent pressure zone ( and it is clear from Luad comment you are in an RPZ.)

The rational thing for you to do in light of the legislaiton is to immediately increase the rent by 4% 2 years after the last rent review (or commencement of tenancy) and continue to increase by maximum permitted under legislation until you hit market value. If you ever do given that the legislation will also be discouraging BTL investment, thus restricting supply, thus probably leading to market rents inflating by > 4% per annum.

4ensic15

I don't know why any landlord bothers with 1 year leases at all.

Baby01032012

Fian wrote: »

So is the purchaser. Having a tenant on €300 below market incentivises them to resist the sale, not to facilitate it. The current rent also limits the purchaser in a rent pressure zone ( and it is clear from Luad comment you are in an RPZ.)

The rational thing for you to do in light of the legislaiton is to immediately increase the rent by 4% 2 years after the last rent review (or commencement of tenancy) and continue to increase by maximum permitted under legislation until you hit market value. If you ever do given that the legislation will also be discouraging BTL investment, thus restricting supply, thus probably leading to market rents inflating by > 4% per annum.

The purchaser is unlikely to be a BTL. With any investment you have to compare the return against other investments. Paying off mortgage may not be the best choice especially if on tracker. Either way as Vicktor mentioned wait until luaus is up and running however that may already be built into the price.

76544567

A lease is pointless nowadays for a landlord. I wouldnt bother with one. Im held to it but the tenant isnt.

OP, I had a similar situation to yourself. I had the best tenants ever turn into the worst tenants ever when I told them I was selling the house.
They refused to move and were bedding in for the long haul, threatening to use the courts and the RTB to ruin me as much as possible.
Be very careful if you want to sell.

paddyman

There isn't anything you can put into a lease that is going to change what happens when you ask the tenants to leave. Ensure they are registered with PRTB and give the correct notice etc.

Ms Doubtfire1

The tenants are currently protected under part4. If you enter another fixed term lease you are stuck for that terms.If you leave as is you can give official notice of sale and that's accepted by the tenancy board. So just tell them you continue the lease as a part 4 lease with no contract.

mauraf

OP here...
Thank you all for your replies...very interesting advice there that I will take on board...
-the tenants are only there 1 year so can do nothing about upping the rent yet
- great advice re just telling them we are continuing with Part 4
- 76544567 I would be interested in hearing how you got out of the quandary with your tenants? And what were their grounds for not wanting to leave?

Thanks all again...much appreciated.

76544567

mauraf wrote: »

OP here...
Thank you all for your replies...very interesting advice there that I will take on board...
-the tenants are only there 1 year so can do nothing about upping the rent yet
- great advice re just telling them we are continuing with Part 4
- 76544567 I would be interested in hearing how you got out of the quandary with your tenants? And what were their grounds for not wanting to leave?

Thanks all again...much appreciated.

If you read my previous posts you will see what happened.