fixed term tenancy

pasquale83

folks, just looking for you advice here

I would like to rent out my property for 12 months only. just went through the RTB website and I understood that even if the tenancy is a fixed term one, if after 6 months I don't give an eviction notice the tenants are entitled to stay for a totla of 6 years. is that really the case?

also, I might move abroad in the near future. in case the tenants don't want to pay taxes (base rate) and give the full amount, how can I do?

thank you for your help!

antoinolachtnai

This is really very complicated and you haven’t really given enough details about your plans to say anything definitive.

I would have to say that you really should get some professional advice. There is a lot to know to rent property in Ireland (or anywhere).

The issues you mention are basically technical and probably soluble in practice. But there are other more difficult issues like getting and keeping good tenants and dealing with the regulations.

dennyk

Even if the tenants have Part IV rights, you can still end the tenancy for certain allowable reasons, one of which is that you are going to move into the property yourself, and another is that you are planning to sell the property within the next three months. That said, be aware that tenants overholding is a possibility, and if they do it can take many months to have them removed legally, months during which you'll likely not be collecting rent and they may be destroying your property. Obviously most tenants are decent enough and won't pull that nonsense, especially if you screen your applicants carefully, but there is always a risk, so it's something to keep in mind.

Regarding the tax issue if you move abroad, from what I know, withholding and paying the tax is entirely on the tenant if they are paying you directly. If they fail to do so and simply remit the entire amount of the rent to you, Revenue will come after them for the taxes owed, not you. However, that would probably leave you liable for returning the overpayment of rent to the tenant at some point in the future, since they'd technically be remitting to you more than the agreed net rent payment. If you want to avoid that potential complication, you could rent through an Irish agency, who would handle the taxes for you, but of course that's going to cost you some extra money in the end.

Either way, I'd definitely agree with antoinolachtnai's suggestion to seek professional advice before proceeding; being a landlord is a complicated business with a lot of factors to take into consideration, and being an absentee landlord from abroad just makes everything that much harder.

GGTrek

pasquale83 wrote: »

folks, just looking for you advice here

I would like to rent out my property for 12 months only. just went through the RTB website and I understood that even if the tenancy is a fixed term one, if after 6 months I don't give an eviction notice the tenants are entitled to stay for a totla of 6 years. is that really the case?

also, I  might move abroad in the near future. in case the tenants don't want to pay taxes (base rate) and give the full amount, how can I do?

thank you for your help!

Absolutely do not grant fixed terms above 5 months to any tenant, please read this full recent thread to understand the complex issues involved: https://www.boards.ie/b/thread/2057811360
With respect to the tax issue, you can hire an accountant to act as your agent collecting rent and the problem of the 20% disappears.
Poster #2 gave you some valid suggestions as well, you will need to perform a lot of research and cost/benefit analysis based on this research before making a decision to rent out. Also you are talking about "my property", do you live in it? If you live in it, then the RTB rules do not apply and it is not even worth writing a piece of paper.

mdebets

GGTrek wrote: »

Absolutely do not grant fixed terms above 5 months to any tenant,

I never understood this advice. If you are afraid that a tenant won't move out after he got Part 4 rights and you served him with a valid termination notice, you should also be afraid that the same tenant won't move out after 5 months and it would take you the same time to evict him then it would take you if he had Part 4 rights. On the other hand, if you change after every 5 months, you increase the likelihood of getting a bad tenant.

mdebets

mdebets wrote: »

I never understood this advice. If you are afraid that a tenant won't move out after he got Part 4 rights and you served him with a valid termination notice, you should also be afraid that the same tenant won't move out after 5 months and it would take you the same time to evict him then it would take you if he had Part 4 rights. On the other hand, if you change after every 5 months, you increase the likelihood of getting a bad tenant.

You are forgetting that you can terminate the tenancy for any reason you want in the first 6 months but you have very limited reasons for the next 6 years. So if they attain part 4 then unless they do something horrifically bad, yiu want the house for your own use or you want to renovate you are stuck with them for 6 years. However give them notice at 5 months and even if they over hold and cause trouble they won't be there for anything close to 6 years.

I don't see any major risk in changing tenant every months or so, you just need to pick your tenant wisely. The thought it being stuck with a tenant for 6 years is just far to risky for many LLs.

mdebets

Gracelynn Shy Mime wrote: »

You are forgetting that you can terminate the tenancy for any reason you want in the first 6 months but you have very limited reasons for the next 6 years. So if they attain part 4 then unless they do something horrifically bad, yiu want the house for your own use or you want to renovate you are stuck with them for 6 years.

But if you are a landlord (=renting out a property for financial gain) why would you want a tenant out other than for the legal reasons you can get them out (they don't pay rent, they are anti-social, they are destroying the property, you want to move in yourself, you want to sell it, you want to do major renovations that can't be done with a tenant inside the house).
And if you have a tenant who makes problems moving out for legal reasons, what would make you think that he would move quietly after 5 months.
Every time you switch tenants, it will cost you money and reduces the income. It also increases the risk that the new tenant is a bad tenant.

Gracelynn Shy Mime wrote: »

However give them notice at 5 months and even if they over hold and cause trouble they won't be there for anything close to 6 years.

I don't see any major risk in changing tenant every months or so, you just need to pick your tenant wisely. The thought it being stuck with a tenant for 6 years is just far to risky for many LLs.

Graham

Gracelynn Shy Mime wrote: »

I don't see any major risk in changing tenant every months or so, you just need to pick your tenant wisely.

Probability.

Lets say 1 in 20 tenants is one that you'd end up regretting. That's a 5% chance you find a 'bad-un'.

A new tenant every 6 months over 5 years and you've had 10 tenants, those additional 9 roles of the dice increase your risk of a poor tenant to 50%.