Advice re - Existing tenant and rent price

charleville

Hi,

I have an existing tenant in my house the last 5 years almost now, she’s been great in fairness never bothered me for much and paid rent on time, she’s been receiving part rent allowance as she has a child and also works part time.

However things are tight on my end and the house is costing me too much every year (mostly on tax as everything is above board).

Tenant currently pays not much over €1000 for a large 3 bed 2bath house in a rpz.
I know I could get a lot more than this as houses in the area are going for €1700-2000, this is the market value.
Being able to put up the rent would greatly ease the pressure off on my end financially and take the stress away.

It’s either get the market value very soon or I’m going to have to sell up and then nobody wins and she’ll still be out...

She’s looking to go on to the hap scheme now and has been into them, she’s told them I’ve been looking to up the rent to market value as I’ve discussed this with her briefly telling her of my situation re the house, and they’ve obviously told her that I can’t do that.
I know I can’t just put up the rent or I can only put it up by 4% so I was a bit annoyed she told them this, the reason we came to chat about it was she was telling me her new partner might be moving in to the house, so I thought it would be a good time to renegotiate rent etc, but nothing was decided.

so is it advisable to give her her 3 months notice and get new tenants before she goes on the hap.. can I then ask for the market value from new tenants straight away ?

Or do I need to renovate the house under the new law to get the market value regardless if it’s a new or existing tenant.. is this the only way to go ?

Rent has not been increased in years...

Any advise welcomed please.

Hitman3000

charleville wrote:

so is it advisable to give her her 3 months notice and get new tenants before she goes on the hap.. can I then ask for the market value from new tenants straight away ?

What reason are you going to give to terminate her tenancy? Plus even with new tenants you can only increase by the 4% unless you do a refurb.

hawkelady

There's no way around this cause of the government sticking their nose in. My advise would be to sell up , take your money and wash your hands of being a landlord in this country

charleville

Hitman3000 wrote: »

What reason are you going to give to terminate her tenancy? Plus even with new tenants you can only increase by the 4% unless you do a refurb.

So... do a refurb is the only option then ?

What is classed as a refurb in the eyes of the people who write these laws in

awec

Refurb is the only legitimate way you can increase beyond 4%.

On the other hand there were mutterings in the past that there'd be changes to the RPZ rules to help landlords like yourself who'd kept rents very low for familiar tenants, but you could be waiting a long time for those to change.

Hitman3000

charleville wrote:

What is classed as a refurb in the eyes of the people who write these laws in

New carpets ,painting. Remodel kitchen bathroom. Pretty much stuff that it's only really possible to do unoccupied.

Graham

charleville wrote: »

So... do a refurb is the only option then ?

What is classed as a refurb in the eyes of the people who write these laws in

Have a read over this thread, especially the linked documents.

It may help clarify items that individually would not qualify. e.g. new kitchen, new carpets, painting.

https://www.boards.ie/vbulletin/showthread.php?t=2057812263

Hitman3000

charleville wrote:

So... do a refurb is the only option then ?

You could move in a family member for a period of time. I suggest however you follow the rules exactly and don't try to pull a fast one.

PhoenixParker

When did you last increase the rent?

charleville

PhoenixParker wrote: »

When did you last increase the rent?

2010

Graham

Hitman3000 wrote: »

You could move in a family member for a period of time. I suggest however you follow the rules exactly and don't try to pull a fast one.

That's not going change the RPZ rent increase limits.

charleville

Hitman3000 wrote: »

You could move in a family member for a period of time. I suggest however you follow the rules exactly and don't try to pull a fast one.

I don’t plan on pulling a fast one, but I need to somehow legally increase the rent so it’s sufficient enough to cover myself

Hitman3000

charleville wrote:

I don’t plan on pulling a fast one, but I need to somehow legally increase the rent so it’s sufficient enough to cover myself

Refurb or you need it for your own use or sell. Those are your options. The legal rent increase is 4% 40 euro.

Graham

RTB GUIDELINES FOR GOOD PRACTICE ON THE "SUBSTANTIAL CHANGE" EXEMPTION IN RENT PRESSURE ZONES

https://onestopshop.rtb.ie/images/uploads/Comms%20and%20Research/RTB_Guidelines_for_good_practice_on_the_substantial_change_exemption_in_Rent_Pressure_Zones.pdf

Akrasia

Is 1700 really a fair rent for a 3 bed house. Yeah the rental market is broken at the moment, but you're talking about shafting a good hard working tenant. You say you're not making any money on the deal, but you're getting the mortgage on that house paid and gaining equity on your asset. You're getting 12k a year in rent. The house is probably also increasing in value by at least that much.

Landlords complain that Ireland is a hard place to be a landlord. Try being a Tenant.

dancingqueen

This is the document that outlines what are substantial refurbishments: https://onestopshop.rtb.ie/images/uploads/Comms%20and%20Research/RTB_Guidelines_for_good_practice_on_the_substantial_change_exemption_in_Rent_Pressure_Zones.pdf

spaceHopper

Check the rules for HAP, there are minimum requirements (which are not enforced) but could you do upgrades to the house to meet them and then go to market value. Bottom line you can't easily increase the rent. Your grounds for asking her to move aren't valid. Sounds like you want to be fair to her.

Check the rules carefully as to what is counted as a refurb, price a kitchen in IKEA, re carpet up stairs, budget for painting, can the walls be pumped? After you write the costs off against tax how long will it take to recoup the costs? None of that will require her to move out. Can you put up the rent, will HAP and new partner help her cover it? Is it worth it to you?

PhoenixParker

charleville wrote: »

2010

Has she been living there for five years or seven years?

You can increase the rent by more than 4% since its been some time. There's a calculator on the RTB site which will help.

charleville

PhoenixParker wrote: »

Has she been living there for five years or seven years?

You can increase the rent by more than 4% since its been some time. There's a calculator on the RTB site which will help.

The rent has been that price since 2010, she has been living there for almost 5 years now also at that price

Sleeper12

charleville wrote:

What is classed as a refurb in the eyes of the people who write these laws in

A paint job & cheap carpets won't do it. You need to be thinking new kitchen & /or news bathroom.

Buying furniture, carpets, was machine, painting is considered normal maintenance. To put the rent up you need to go beyond normal maintenance

Cyrus

Akrasia wrote: »

Is 1700 really a fair rent for a 3 bed house. Yeah the rental market is broken at the moment, but you're talking about shafting a good hard working tenant.

he is talking about maximising an asset when he is struggling financially,

even at current rents, if you are a paye worker and renting a place out above board, if you have a mortgage it probably doesnt wash its face.

charleville

spaceHopper wrote: »

Check the rules for HAP, there are minimum requirements (which are not enforced) but could you do upgrades to the house to meet them and then go to market value. Bottom line you can't easily increase the rent. Your grounds for asking her to move aren't valid. Sounds like you want to be fair to her.

Check the rules carefully as to what is counted as a refurb, price a kitchen in IKEA, re carpet up stairs, budget for painting, can the walls be pumped? After you write the costs off against tax how long will it take to recoup the costs? None of that will require her to move out. Can you put up the rent, will HAP and new partner help her cover it? Is it worth it to you?

Afaik bringing a house up to minimum requirements does not count... I will check it out but it’s a bit vague as to what is included or not,

how do I need to prove the works has been done for example ??

I am a tradesman and have my own small business so is it just receipts they need to see for works been done or so they come out and inspect ?

BrokenArrows

Akrasia wrote: »

Is 1700 really a fair rent for a 3 bed house. Yeah the rental market is broken at the moment, but you're talking about shafting a good hard working tenant. You say you're not making any money on the deal, but you're getting the mortgage on that house paid and gaining equity on your asset. You're getting 12k a year in rent. The house is probably also increasing in value by at least that much.

Landlords complain that Ireland is a hard place to be a landlord. Try being a Tenant.

He is charging 1k rent per month which is absolutely nothing. I was renting a house for 1k a month in 2010 in Galway!!
He is doing everything above board so is probably being shafted by the tax man. If hes a higher rate tax payer he will be getting 6k per year in rent after tax and probably paying for things to be fixed etc.

The system is broken and they need to allow for rent increases greater than 4% when the tenant is obviously paying far too little. The current law is basically forcing the landlord to kick his good tenant to the curb in order to make being a landlord viable.

OP, a potential resolution is to move into this house yourself and put your current home up for rent. Potentially keeping your existing tenant if they are willing to pay a higher price

charleville

Cyrus wrote: »

he is talking about maximising an asset when he is struggling financially,

even at current rents, if you are a paye worker and renting a place out above board, if you have a mortgage it probably doesnt wash its face.

It really doesn’t... landlords have a bad reputation in ireland, but the reality is that most single home landlords are struggling, and I imagine we make up a large number combined

Akrasia

Akrasia wrote: »

Is 1700 really a fair rent for a 3 bed house. Yeah the rental market is broken at the moment, but you're talking about shafting a good hard working tenant. You say you're not making any money on the deal, but you're getting the mortgage on that house paid and gaining equity on your asset. You're getting 12k a year in rent. The house is probably also increasing in value by at least that much.

Landlords complain that Ireland is a hard place to be a landlord. Try being a Tenant.

A LL invests to maximise their return on investment not half cover the cost of a mortgage etc.

It's scandalous how LLs are being forced to stay on well below market rents, often resulting in them struggling to make ends meet where they should be reaping the rewards for their hard work and investment risk.

The combination of crazily high levels of taxation and unconstitutional rent controls are a total farce.

dudara

charleville wrote: »

2010

Given that it’s been 7 years since you last increased rent, then you’ll be entitled to more than 4%. Check the RTB calculator but I think you’ll be entitled to ~14%. I know it’s not market rate, but at least it’s more than 4%.

As others have pointed out, the only way you can raise rents to market rates is to substantially refurbish, and guidance on that is wishy-washy at best. To do that you’ll have to get the tenant out smoothly, invest in the refurb and then relist, which has the potential risk of replacing a good current tenant with an poor one.

doolox

I am afraid that you left it too late to increase rent by enough to cover your costs going forward.

You best option would be to sell and take your money before too long and before you are completely cleaned out.

This is provided you are not in negative equity and on how much you can get for the house but trying to raise rent from 1000 to 1700 pm in one go will not be allowed. Even going at the max 4% pa allowed would take 15 years to get up to TODAYS market rent, not counting for market rises in the meantime...

charleville

dudara wrote: »

Given that it’s been 7 years since you last increased rent, then you’ll be entitled to more than 4%. Check the RTB calculator but I think you’ll be entitled to ~14%. I know it’s not market rate, but at least it’s more than 4%

Hi,
Your right, I checked there and it works out around 10% for me.
It’s still not where I need to be though but it’s something.
How often can the rent be put up by 4% ?

dudara

I think you can increase by 42% every year thereafter, but perhaps someone else can confirm?

Edit: corrected, thanks Fol20

Fol20

It’s 4pc there after

hawkelady

Akrasia wrote: »

Is 1700 really a fair rent for a 3 bed house. Yeah the rental market is broken at the moment, but you're talking about shafting a good hard working tenant. You say you're not making any money on the deal, but you're getting the mortgage on that house paid and gaining equity on your asset. You're getting 12k a year in rent. The house is probably also increasing in value by at least that much.



Landlords complain that Ireland is a hard place to be a landlord. Try being a Tenant.

You really have no idea what you're talking about !! You also don't know any landlord that owns one property cause if you did , you be aware that they are struggling with all the hoops they have to jump through. But you go on ahead and think that every landlord is living it like a lord !!
Your ignorance is sickening

Browney7

Miles Hundreds Liquor wrote: »

....unconstitutional rent controls are a total farce.

I must have missed the recent supreme court judgement on this one?

Browney7

Browney7 wrote: »

I must have missed the recent supreme court judgement on this one?

If challenged they will be found to be, but someone needs to challenge them.

Browney7

Miles Hundreds Liquor wrote: »

If challenged they will be found to be, but someone needs to challenge them.

In your qualified legal opinion?

I think that Wiley aul fox Dev knew what he was doing with the "common good" piece.

charleville

What’s to say... if a LL gave a tenant notice on the grounds of renovating the house,

1) LL leaves the house vacant for a month after tenant leaves.
2) They say they have done all necessary works dry lined some walls, replastered, repainted, insulated attic, new kitchen, new tiling, moved a wall etc, new front door etc.
3) They never did any of these works but who’s to say that the LL or anyone else didn’t.
4) Tell the new tenants that above works has been carried out and now this justifies the new rent of €xxx

What I’m getting at here is that I’m trying to understand who is inspecting the properties to make sure the works were carried out, does the rtb need a contractors receipt, if so what if the LL is competent enough (ie.. qualified and not a diy’er) and is doing the work themselves, or a relatives/friend helps out etc ?

I’ve read through the rtb links about this and it’s all so vague, there is some information stating what works should be carried out (again..slightly vague) but there’s no real definition of how to prove the works have actually been done.

I put my last dime on it that there’s more controls and restrictions still to come.

hawkelady

charleville wrote: »

What’s to say... if a LL gave a tenant notice on the grounds of renovating the house,

1) LL leaves the house vacant for a month after tenant leaves.
2) They say they have done all necessary works dry lined some walls, replastered, repainted, insulated attic, new kitchen, new tiling, moved a wall etc, new front door etc.
3) They never did any of these works but who’s to say that the LL or anyone else didn’t.
4) Tell the new tenants that above works has been carried out and now this justifies the new rent of €xxx

What I’m getting at here is that I’m trying to understand who is inspecting the properties to make sure the works were carried out, does the rtb need a contractors receipt, if so what if the LL is competent enough (ie.. qualified and not a diy’er) and is doing the work themselves, or a relatives/friend helps out etc ?

I’ve read through the rtb links about this and it’s all so vague, there is some information stating what works should be carried out (again..slightly vague) but there’s no real definition of how to prove the works have actually been done.

I put my last dime on it that there’s more controls and restrictions still to come.

Best of luck with it, if you tenants knows her rights and rtb you could find yourself in a long drawn out process that'll give you nothing but heartache !!! I agree with you , your house should be your rules but this government thinks they know better. As I said , best of luck

mdebets

charleville wrote: »

What’s to say... if a LL gave a tenant notice on the grounds of renovating the house,

1) LL leaves the house vacant for a month after tenant leaves.
2) They say they have done all necessary works dry lined some walls, replastered, repainted, insulated attic, new kitchen, new tiling, moved a wall etc, new front door etc.
3) They never did any of these works but who’s to say that the LL or anyone else didn’t.
4) Tell the new tenants that above works has been carried out and now this justifies the new rent of €xxx

You are missing a crucial point here. You have to re-offer your house to your old tenant before you can get a new tenant.
So the new tenant knows the new and old price and if you have annoyed him enough beforehand, he will say that he is interested, but needs to see the house first and then will see what has been done (and if he is a little bit smart, he will have taken pictures of the before state). He then could open a case with the RTP against you for illegal eviction if you haven't done the work.

mdebets

Miles Hundreds Liquor wrote: »

It's scandalous how LLs are being forced to stay on well below market rents, often resulting in them struggling to make ends meet where they should be reaping the rewards for their hard work and investment risk.

If a LL is struggling financially today because he can only charge below market rent, he was also struggling in the last years, when he was still allowed to increase the rent, but he didn't. In this case, it's better if he gets out of the market, because being a LL is not for him.

spaceHopper

If you can legally increase 10% do that and let her move her partner in and go HAP she'll probably be very happy with that. But fore warn her that you will be putting it up 4% per year from now in.

beauf

charleville wrote: »

....It’s either get the market value very soon or I’m going to have to sell up and then nobody wins and she’ll still be out......

If you can't afford it. Sell out. Otherwise increase it to the max you're allowed.

If you've done nothing about it for 5yrs its seems unlikely its suddenly become that desperate.

Diemos

spaceHopper wrote: »

But fore warn her that you will be putting it up 4% per year from now in.

But you can only increase rent 2 years?

beauf

https://onestopshop.rtb.ie/during-a-tenancy/rent-review-in-a-rent-pressure-zone-rpz/how-is-the-rent-calculated/
https://onestopshop.rtb.ie/calculator/rpz

Diemos

Diemos wrote: »

But you can only increase rent 2 years?

In a rent pressure zone the first increase can only be after 2 years but then you can increase the rent every year after that.

Fian

As you are looking for advice from the point of view of your position as a landlord - here is the most important piece:

The first rent increase under an existing tenancy is capped at 2% per annum. After the first increase it is 4% per annum. This was a consequence of a report stage amendment made as the bill was passing through the Dáil, so there was less time for consideration than might ordinarily be the case.

However you are in a second part 4 tenancy. I am basing this on your "almost the last 5 years now" in the first post - I am assuming that the first part 4 tenancy expired (4 years after it commenced) during the period between the enactment of the RPZ legislation last December and the current date.

Therefore you can increase the rent by 4% per annum. Remember to account for the notice period when applying the formula. Mark your tenancy as a new tenancy under the RPZ calculator and you will get the correct output - it is not an existing tenancy you have a new tenancy which started after the RPZ legislation came into effect.

Assuming your €1000 was set in January 2013 - so coming up on 5 years as you suggest, and new rent to take effect end March the RTB calculator would give you the results below:


Tenancy Type:
New

Date previous rent set:
30/01/2013

Date new rent to take effect:
31/03/2018

Previous rent amount:
€1000

Maximum rent permitted:
€1206.67

* Please note the amount above is the maximum increase permitted; Landlords can apply a lesser amount.

Landlords can apply a lesser amount.

Calculation:
R x (1 + 0.04 x t/m)

€1000 x ( 1 + 0.04 * 62/12) = €1206.67

charleville

So, the house is large enough downstairs as we extended it at ground floor level at the time we bought it, and I have the option of putting in an extra bedroom (legally and in keeping with the requirements), and the house would still be very spacious.

If I put in the extra room and make it from a 3 to a 4x bed house is just doing this good enough to substantially change the layout of the property and therefore becoming exempt from the rpz criteria, eg 4% rule, and then seeking the full market rent from a new tenant (asssumimg the old tenant does not want to move back in).

How does it work can I just automatically seek the market rent of a 4x bed house when the work is complete and I’ve given my tenant the required notice or is there a certain formula I would be required to follow still when seeking the rent amount at that point ?

Realistically I Don’t think I need to sell up so am not thinking along those lines.

charleville

beauf wrote: »

If you can't afford it. Sell out. Otherwise increase it to the max you're allowed.

If you've done nothing about it for 5yrs its seems unlikely its suddenly become that desperate.

Not necessarily... I just had a lot of other things going on at the time and wasn’t keeping up to date with the changing of regulation etc and I was trying to not be greedy to a good tenant unnecessarily, my circumstances changed in recent times and it’s only now I need to do something about it.

hawkelady

charleville wrote: »

So, the house is large enough downstairs as we extended it at ground floor level at the time we bought it, and I have the option of putting in an extra bedroom (legally and in keeping with the requirements), and the house would still be very spacious.

If I put in the extra room and make it from a 3 to a 4x bed house is just doing this good enough to substantially change the layout of the property and therefore becoming exempt from the rpz criteria, eg 4% rule, and then seeking the full market rent from a new tenant (asssumimg the old tenant does not want to move back in).

How does it work can I just automatically seek the market rent of a 4x bed house when the work is complete and I’ve given my tenant the required notice or is there a certain formula I would be required to follow still when seeking the rent amount at that point ?

Realistically I Don’t think I need to sell up so am not thinking along those lines.

Is the proposed bedroom going to be next to the kitchen or living room ??? Sounds odd?? I'd imagine it would cost a fair bit to do that anyway, do you have a few thousand to invest into it ?? I can see you are trying everything to get the max rent you can for the house, which is fair enough , only you were busy or not interested when the laws were changing so I do feel you are goosed if you're trying to make a big gain now. Even more so if your current tenant is size to the rules too.

charleville

hawkelady wrote: »

I do feel you are goosed if you're trying to make a big gain now. Even more so if your current tenant is size to the rules too.

Why am I goosed if you don’t mind me asking ? Is this not what the current regs are stating that I need to do ?

Even though the Current tenant is ok with moving as she understands the situation, but I’m sure she can have no option if I am playing exactly by the rules I would imagine... I’m not doing anything against regs or law here, am I ?

Graham

Did you read the RTB guidelines?

The changes to the dwelling must be of such a kind and extent that they would have a significant effect on the letting value of the dwelling. This would be over and above any change in the letting value that would have occurred due to changes in the rental market if the changes to the property had not been made. This means a landlords needs to able to show that the rent at the last time it was either set or reviewed would have been different had these substantial changes been made. For example, if the property has been extended and an additional bedroom added, what would the rent for a 3 bed have been at the time compared to a two bed property in the same area?

When you say 'putting in an extra bedroom', are you talking about changing the configuration (walls etc) or just changing the label on an existing room?

Kimbot

Graham wrote: »

Did you read the RTB guidelines?



When you say 'putting in an extra bedroom', are you talking about changing the configuration (walls etc) or just changing the label on an existing room?

He says they extended it when they bought so that to me means the room already existed, now its just going to be repurposed to a bedroom.

charleville

Graham wrote: »

Did you read the RTB guidelines?



When you say 'putting in an extra bedroom', are you talking about changing the configuration (walls etc) or just changing the label on an existing room?

Putting in stud walls and changing the configuration of the downstairs layout... there is scope and space to do this as we have a lot of space to use up, in hindsight the downstairs layout is too big as is just for living space (thankfully) this is mainly due to the fact that we extended it when we bought the house.