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Increased Rent - 4% cap question

  • 30-06-2017 10:30am
    #1
    Reg_hurley
    Registered Users, Registered Users 2 Posts: 256 ✭✭


    Would this scenario be allowed:
    Tenancy is in place over 2yrs, rent has never been increased and is below market rates.
    The landlord is happy with the current tenants.
    The tenants are happy with the tenancy.
    Rent review is due.

    Would the landlord be allowed to issue a rent increase of 4% (assuming correct notice and procedure is followed) and at the same time offer a 4% "happy with tenant" discount?
    Thereby keeping the rent the same for the current tenants but allowing the rent to be set closer to the market rate if/when the tenants move on.


Comments

  • #2
    Fian
    Registered Users, Registered Users 2 Posts: 2,196 ✭✭✭Fian


    The landlord would be taking on legal risk by doing so. Potential tax implications also. Not a clever move.

    The permissible increase will be 4.25%.


  • #3
    DubCount
    Registered Users, Registered Users 2 Posts: 1,094 ✭✭✭DubCount


    Reg_hurley wrote: »
    Would this scenario be allowed:
    Tenancy is in place over 2yrs, rent has never been increased and is below market rates.
    The landlord is happy with the current tenants.
    The tenants are happy with the tenancy.
    Rent review is due.

    Would the landlord be allowed to issue a rent increase of 4% (assuming correct notice and procedure is followed) and at the same time offer a 4% "happy with tenant" discount?
    Thereby keeping the rent the same for the current tenants but allowing the rent to be set closer to the market rate if/when the tenants move on.

    I doubt it. If after the rent review the rent is X, then X is the base rent for the next rent review. I dont think you are allowed differentiate between existing tenant and new tenant by giving one a discount and not the other. I cant see the RTB buying that one.


  • #4
    spaceHopper
    Registered Users, Registered Users 2 Posts: 4,101 ✭✭✭spaceHopper


    just put it up 4% and have done with it 4% of 1500 is 60 euros.


  • #5
    judeboy101
    Banned (with Prison Access) Posts: 3,246 ✭✭✭judeboy101


    Put the rent up and give them a 4% one4all gift boucher once a month, tax free.


  • #6
    Graham
    Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭Graham


    judeboy101 wrote: »
    Put the rent up and give them a 4% one4all gift boucher once a month, tax free.

    I'm not sure that would be tax free for the landlord who I presume would have to declare and pay tax on the 4%.


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  • #7
    murphaph
    Registered Users, Registered Users 2 Posts: 19,050 ✭✭✭✭murphaph


    Just put the rent up to the max allowed according to the RTB calculator. You never know what silly laws will come in next. You are mad to even consider not imposing the max allowable rent increase given how this government has locked you into perpetually below market rents for all comers because you have been nice to a particular tenant who earned it in your eyes.

    Just explain to your tenants that you can't risk being forced to offer the property to their successors at well below market rates and that they can blame the government for forcing your hand.


  • #8
    [Deleted User]
    Posts: 24,714 ✭✭✭✭ [Deleted User]


    Just put up the rent as much as you can. This sort of messing around giving discounts is what has left some LLs getting hundreds less per month than their property is worth. Being a LL is a business and should be maximising profits, this appears to be forgotten by some.


  • #9
    Graham
    Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭Graham


    Vivian Inexpensive Barefaced wrote: »
    Just put up the rent as much as you can. This sort of messing around giving discounts is what has left some LLs getting hundreds less per month than their property is worth.

    Agreed, the law as it stands has left landlords with little choice.
    Vivian Inexpensive Barefaced wrote: »
    Being a LL is a business and should be maximising profits, this appears to be forgotten by some.

    Maximise profit is only part of it. Before the RPZ legislation it might have been prudent to offer reliable, long-term, low-maintenance tenants some form of discount. There's definite value to a tenant that isn't on the phone demanding something every few days.


  • #10
    wordofwarning
    Closed Accounts Posts: 697 ✭✭✭wordofwarning


    Just up the rent

    I know of a landlord, who had tenants on rent of €900 per month before Xmas. The market rate was €1300. I told them you are insane for not hiking the rent, as you don't know what will happen with the budget, the new RTA etc etc. But they did not want to upset the tenants before Xmas etc. I put it to them this way, do you really want your tenants piling on the debt before Xmas assuming their cheap rent will continue. They hiked the rent before Xmas to €1250(the apartment needs a fair amount of cosmetic work). If they had waited to January to give the tenants 'a nice Xmas', they would have been screwed over in January.

    Moral of the story, careless about the tenants and more about your bottomline. It is a horrible thing to say, but there are people in the Dail who want landlords having zero rights. They will not stop until you have no rights. You need to do whatever is legal now, as you can't tell what the nutjobs in the dail will do next.


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