Rent pressure zones and non furnished houses.

Visconti

I am curious as to the above. I have a property in a rent pressure zone. I currently receive about €400 pm less than the supposed market value.
The tenancy is a slightly unusual one I think as the tenant is a family friend has been there 10 years plus.... we also have a specific deal.
They furnished the house and do all maintenance ie: painting , gardening, they supply their own washing machine, dryer etc etc
The only thing I have done is replace the boiler.
I am happy with the arrangement as its easy for both sides.
My question is this should my tenant leave the 4% a year rubbish would be no good to me as if I have to furnish the property and fully maintain it I will be looking for market value.
How would the RTB view this I wonder.

shivermetimber

Nice European style rental set up. Not sure I understand the question but if you are saying that the tenant should let you wave aside the 4% increase due to the set up then no, you can't and the RTB will side with the rules. You can of course have a chat with them but rules are there for a reason and unfortunately sometimes don't suit everyone.

Baby01032012

If you do have to rent out in future and are subject to rent cap, You can offer it unfurnished at the rent cap rate. You can then separately rent the furniture to the new tenant. There is no cap on any ancillary items only actual rent paid.

Visconti

shivermetimber wrote: »

Nice European style rental set up. Not sure I understand the question but if you are saying that the tenant should let you wave aside the 4% increase due to the set up then no, you can't and the RTB will side with the rules. You can of course have a chat with them but rules are there for a reason and unfortunately sometimes don't suit everyone.

No I have no intention of changing the arrangement. When they move out be it 2 years or 10 years I have no intention of offering some stranger the same deal. I would be looking to service the house and furnish it for the going rate. Surely rtb could not expect me to rent the unit for the same price as the non furnished non serviced unit ? Even at +4%.
Also if I wanted to sell and the prospective buyer wanted to let it out how could they be held responsible for the unfurnished unserviced deal we are doing with a family friend.

Visconti

Baby01032012 wrote: »

If you do have to rent out in future and are subject to rent cap, You can offer it unfurnished at the rent cap rate. You can then separately rent the furniture to the new tenant. There is no cap on any ancillary items only actual rent paid.

Very smart.

Stheno

When did you last raise the rent?

amcalester

There’s no requirement for you to provide furniture so just rent it unfurnished.

There are minimum standards you need to adhere to but that’s it.

I would guess that you’ll get a better standard of tenant if you did rent unfurnished too.

https://www.rtb.ie/landlords/rights-responsibilities-obligations/minimum-standards-for-rented-dwellings

karenalot

amcalester wrote: »

There’s no requirement for you to provide furniture so just rent it unfurnished.

There are minimum standards you need to adhere to but that’s it.

I would guess that you’ll get a better standard of tenant if you did rent unfurnished too.

https://www.rtb.ie/landlords/rights-responsibilities-obligations/minimum-standards-for-rented-dwellings

This. You don’t have to rent furnished but you do have to provide the min standards which include cooking and laundry facilities. I would just rent unfurnished.

dudara

You could be entitled to more than 4% depending on when the tenancy came into effect and when you last raised the rent. Use the RTB calculator to figure out the allowed raise.

Heebie

There are plenty of us renters out here looking for unfurnished places. They're hard to find, and we're much more comfortable with our own furniture.
I wouldn't want to sleep on some rickety bed that a landlord paid €200 for.

If your worried about the 4% cap, I've think you can renovate the place when they move out, then up the rent to market value. There are certain rules, I think, about how much renovation must be done.

murphaph

The RTB don't get to decide what the law means if the law is unclear. That's for a judge to provide clarity on or refer the matter higher up the chain.

It's only a matter of time before this vague piece of legislation is challenged. Someone like the OP would be a very likely candidate to challenge this law.

The law requires a significant improvement in the accommodation offered to negate the rent increase limit. To me and perhaps to a sensible judge also, moving from unfurnished to fully furnished is quite clearly a significant improvement in accommodation provided.

The RTB may think this can only be achieved by carrying out works that require planning permission but the law simply doesn't specify that.

shivermetimber

Visconti wrote: »

No I have no intention of changing the arrangement. When they move out be it 2 years or 10 years I have no intention of offering some stranger the same deal. I would be looking to service the house and furnish it for the going rate. Surely rtb could not expect me to rent the unit for the same price as the non furnished non serviced unit ? Even at +4%.
Also if I wanted to sell and the prospective buyer wanted to let it out how could they be held responsible for the unfurnished unserviced deal we are doing with a family friend.

Yep, I misunderstood

Marcusm

Visconti wrote: »

I am curious as to the above. I have a property in a rent pressure zone. I currently receive about €400 pm less than the supposed market value.
The tenancy is a slightly unusual one I think as the tenant is a family friend has been there 10 years plus.... we also have a specific deal.
They furnished the house and do all maintenance ie: painting , gardening, they supply their own washing machine, dryer etc etc
The only thing I have done is replace the boiler.
I am happy with the arrangement as its easy for both sides.
My question is this should my tenant leave the 4% a year rubbish would be no good to me as if I have to furnish the property and fully maintain it I will be looking for market value.
How would the RTB view this I wonder.

to fall outside the rent cap there must be a "substantial change" in the nature of the accommodation. Frankly, while. upgrading the furniture in an existing furnished rental would not qualify, there must be some prospect of a change from unfurnished to furnished constituting a "substantial change" in nature.

Before anyone suggest there needs to a "substantial refurbishment", please read the law before replying!

dennyk

Here's the RTB's guidance on the nature of a "substantial change" for purposes of obtaining an exemption from the RPZ rent restrictions:

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

Installation of a washer/dryer, cooker, fridge, or other items that are required per minimum rental standards definitely does not qualify, as those are simply the landlord's obligations that they are expected to fulfill for all rentals.

Replacing existing furniture alone generally wouldn't qualify for an exemption. Changing a property from unfurnished to fully furnished would be more of a question mark, though, as it could theoretically be argued that doing so is a substantial change in nature and that it might increase the market rental value of the property. It might depend on the quality and quantity of the furnishings provided as well, e.g. throwing a couple cheap mattresses and a tattered Craigslist-reject sofa in there probably wouldn't cut it, but filling the place with a full set of brand-new quality furnishings might be more likely to qualify (although you'd have to weigh the value against the potential risk of your tenants tearing up said expensive furnishings in short order).

Doing a full-on remodel of the place, including upgrading multiple rooms, improving all the flooring, redoing wiring/plumbing, making structural changes, etc. as well as furnishing the place most likely would qualify.

Unfortunately I don't think there's a way to get a firm answer on a particular set of planned changes unless the tenant brings the rent increase to the RTB after the fact and they make a judgement. One thing to consider is that unless and until some sort of public rent register is put into place and enforced by law, your new tenant would have no way of knowing the rent your old tenant was paying unless they heard it from the old tenants directly, so they'd have no way of knowing that you were breaking the rules.

It's also possible you might be able to charge near market rates without breaking the rule at all; if your current tenants' rent hasn't been changed at all during their tenancy, you can raise the rent based on 4% per year, not just 4% in total; e.g. if they've been paying €1000 a month for ten years, for a new tenancy you could legally charge a new tenant €1400. The RTB has a calculator that will tell you exactly how much you can charge based on the current rent and the date that rent was first set.

Visconti

Stheno wrote: »

When did you last raise the rent?

Once in last 10 years by a little bit.

Visconti

Marcusm wrote: »

to fall outside the rent cap there must be a "substantial change" in the nature of the accommodation. Frankly, while. upgrading the furniture in an existing furnished rental would not qualify, there must be some prospect of a change from unfurnished to furnished constituting a "substantial change" in nature.

Before anyone suggest there needs to a "substantial refurbishment", please read the law before replying!

Wondering about the fact that the tenant is also a family friend. Can the rtb really force us to charge someone market value if they are a friend ? Just so the next total stranger who goes to rent off us wont be getting the bargain of the century , doesent see fair.
Also as someone who had a house completely trashed by a delinquent tenant who walked away scot free and was even housed, I find these rules and regulations extremely insulting. It was never a level playing field but now the tenants get even more power.
If I could turn back time I doubt I would get into property again.

size5

Visconti wrote: »

I am curious as to the above. I have a property in a rent pressure zone. I currently receive about €400 pm less than the supposed market value.
The tenancy is a slightly unusual one I think as the tenant is a family friend has been there 10 years plus.... we also have a specific deal.
They furnished the house and do all maintenance ie: painting , gardening, they supply their own washing machine, dryer etc etc
The only thing I have done is replace the boiler.
I am happy with the arrangement as its easy for both sides.
My question is this should my tenant leave the 4% a year rubbish would be no good to me as if I have to furnish the property and fully maintain it I will be looking for market value.
How would the RTB view this I wonder.

Regards your question at the end-if the tenant was to move out(in 2 or 10 years), you could only increase the rent by 4%. Unless you do up the property as outlined above. Obviously you would get added income if you were to rent out the furniture separately.

With this rental cap it is crucial that rent is increased by the allowed amount every year(or when allowed). In rent pressure zones if the opportunity is missed by the landlord it is almost impossible to claw it back.

Varik

Talk to them, but you are having an easy time of it. 10 years of peace is worth something. What % are you below the market rate.

Rent pressure zones won't last forever, some REIT will challenge it eventually when they've stopped benefiting from all the small landlords leaving. It being "temporary" doesn't stop it being unconstitutional.

the_syco

As above, rent unfurnished when you do rent again.

There will be people looking for unfurnished houses, and it means less things to fix. Examples; no need to replace beds, chairs, sofas, tables, etc, when they break.