Advice in drafting part 4 tenancy

pasquale83

I'm planning to rent out my house to a family in the coming months and I'd like to draw down a part 4 tenancy as I don't need the house for the future as I permanetly relocate to another country.

I've seen multiple templates around the internet but I'd like to ask your adice in some specific clauses you recommend to add to the lease contract.

For example I'd like to request that the tenant doesn't do any major changes to the house (it is already in an excellent state, I am OK with painting and small works if needed) but I'd like to be notified and also agree together what they would like to do.

For example, I already know they want to change the shed (it is old indeed and I am OK with that) but when they will return the house I want to have a shed anyway. Same for other stuff (like kitchen appliances, etc.)

Also, they might request to renovate tha main bath (it is in great conditions, just a bit old in appearance) and I am OK with that as well - in this case I am happy to participate in the expenses but I'd like to avoid they put pink tiles for example

The tenants are constructin workers, so they are good as handymen and are able to do all this renovations themself, that's why I am also happy to rent the property to them - I hope I can minimize the property management from abroad.

Please let me know if I can cover examples like those in the contract and if you have any other recommendations for me.

thank you!

Askthe EA

https://www.topfloor.ie/freebies/lease

pasquale83

Askthe EA wrote: »

https://www.topfloor.ie/freebies/lease

thanks for that but I was looking for some advice on speific items I'd like to add into a standard lease agreement.

runawaybishop

pasquale83 wrote: »

thanks for that but I was looking for some advice on speific items I'd like to add into a standard lease agreement.

If you are out of the country you will need an agent. Otherwise your tenants will need to keep 20% of the rent back from you.

I would not advise becoming a landlord without professional advice as it is a minefield.

pasquale83

runawaybishop wrote: »

If you are out of the country you will need an agent. Otherwise your tenants will need to keep 20% of the rent back from you.

I would not advise becoming a landlord without professional advice as it is a minefield.

thanks for the advice. I can pay 20% taxes on taxable income myself, even if they don't retain it, correct?

runawaybishop

pasquale83 wrote: »

thanks for the advice. I can pay 20% taxes on taxable income myself, even if they don't retain it, correct?

Its more to protect the tenant than you, as if you choose not to pay the tax it is them that are liable, not you.

http://www.citizensinformation.ie/en/housing/renting_a_home/tax_relief_for_tenants.html#le9d7d

You will need someone to keep an eye on the place while you are gone, easier to get a professional to do it as it can be a lot of hassle.

pasquale83

runawaybishop wrote: »

Its more to protect the tenant than you, as if you choose not to pay the tax it is them that are liable, not you.

http://www.citizensinformation.ie/en/housing/renting_a_home/tax_relief_for_tenants.html#le9d7d

You will need someone to keep an eye on the place while you are gone, easier to get a professional to do it as it can be a lot of hassle.

what are the risks that you would worry about? are they included in the list of items I mentioned in my first post?

Samuel T. Cogley

pasquale83 wrote: »

I'm planning to rent out my house to a family in the coming months and I'd like to draw down a part 4 tenancy as I don't need the house for the future as I permanetly relocate to another country.

Sell it and save yourself an awful lot of hassle.

pasquale83

Samuel T. Cogley wrote: »

Sell it and save yourself an awful lot of hassle.

OK, I can consider that. But what's the hassle you expect assuming they pay rent on time?

runawaybishop

pasquale83 wrote: »

OK, I can consider that. But what's the hassle you expect assuming they pay rent on time?

Big assumption! Tenants leaving, things breaking down. Requests to paint, improve, replace items.

pasquale83

runawaybishop wrote: »

Big assumption! Tenants leaving, things breaking down. Requests to paint, improve, replace items.

I've already agreed with them and specified at the start of the thread that they will take care of this stuff.

antoinolachtnai

pasquale83 wrote: »

I've already agreed with them and specified at the start of the thread that they will take care of this stuff.

Well if you’ve already agreed, what else do you really need?

It is really up to you to draft your own clauses if you want something unusual in the agreement. There is no template for it.

A solicitor will probably advise you that your proposed special conditions are not really going to be binding. There are a lot of legal and practical problems. Landlord can’t straightforwardly contract out of his statutory duties. The idea that tenants would renovate the property in their spare time belongs in a construction contract, not in a tenancy agreement.

runawaybishop

pasquale83 wrote: »

I've already agreed with them and specified at the start of the thread that they will take care of this stuff.

Its your house, do what you want with it. I hope your tenants will be as good as you say, because this forum is full of examples showing just how ****ed you can be if they turn out to be bad.

pasquale83

runawaybishop wrote: »

Its your house, do what you want with it. I hope your tenants will be as good as you say, because this forum is full of examples showing just how ****ed you can be if they turn out to be bad.

agree, at the end it's about finding the right tenant. there can be the most binding contract in place, but if the tenants are bad it can be usless

pasquale83

antoinolachtnai wrote: »

Well if you’ve already agreed, what else do you really need?

It is really up to you to draft your own clauses if you want something unusual in the agreement. There is no template for it.

A solicitor will probably advise you that your proposed special conditions are not really going to be binding. There are a lot of legal and practical problems. Landlord can’t straightforwardly contract out of his statutory duties. The idea that tenants would renovate the property in their spare time belongs in a construction contract, not in a tenancy agreement.

thank you for your reply. I was just asking if the list of items I've listed above can be put in a lease and what in general landlods add to a standard part 4 tenancy agreement.

Del2005

pasquale83 wrote: »

thank you for your reply. I was just asking if the list of items I've listed above can be put in a lease and what in general landlods add to a standard part 4 tenancy agreement.

You can put whatever you want in the lease. The problem is that there is no way to enforce anything when a tenant breaks the lease.

pasquale83

Del2005 wrote: »

You can put whatever you want in the lease. The problem is that there is no way to enforce anything when a tenant breaks the lease.

OK, good to know thanks, even if I don't unerstand why the law make it possible...

Samuel T. Cogley

pasquale83 wrote: »

OK, good to know thanks, even if I don't unerstand why the law make it possible...

You're joining a club of us LL who think the same.

pasquale83

I resume this thread to ask an additional question. I see in the list of items a landlord must do the need to provide recipts to the tenant for thei rent payments. how can I do that living abroad? any expriences at this regard?

antoinolachtnai

pasquale83 wrote: »

I resume this thread to ask an additional question. I see in the list of items a landlord must do the need to provide recipts to the tenant for thei rent payments. how can I do that living abroad? any expriences at this regard?

Are they paying by electronic transfer?

pasquale83

antoinolachtnai wrote: »

Are they paying by electronic transfer?

tenancy didn't start yet, but yes, that's the plan

Samuel T. Cogley

pasquale83 wrote: »

tenancy didn't start yet, but yes, that's the plan

No idea if it's fully legal but I get the tenant to use BACS and treat that as a receipt.

pasquale83

Samuel T. Cogley wrote: »

No idea if it's fully legal but I get the tenant to use BACS and treat that as a receipt.

I can use the electronic transfer to my bank account as a receipt then

pasquale83

Is it possible to set up a direct debit on the tenant's account?

pasquale83

Also, if I want to add some special conditions, can I add them to the First Schedule?

davo10

pasquale83 wrote: »

Also, if I want to add some special conditions, can I add them to the First Schedule?

Pasquale, all tenancies start off on good terms, great Landlord, lovely tenants. But there is a real risk that down the line the relationship will sour. A washing machine or boiler breaks down, the tenant decides that they stop paying rent until you fix it etc.

You can put whatever conditions you want into a tenancy agreement, as long as they are legal and you don't infringe on the tenants rights. But whether they will adhere to those conditions is a different matter. Remember, if they stop paying rent, it will take you a year of stress, expense and court action to get them out.

If you are not experienced in renting and/or your property your former home to which you have an emotional attachment, sell it, don't rent.

Samuel T. Cogley

pasquale83 wrote: »

Also, if I want to add some special conditions, can I add them to the First Schedule?

Yeah... what had you in mind?

pasquale83

Samuel T. Cogley wrote: »

Yeah... what had you in mind?

Just mention something like: "any changes to the properties need to be agreed beforhand with the landlord"

Also, I guess the number of copies we need to sign is two?

sorry for the silly questions but I used to be landlord in another countries and things are different there. For example for the equivalent to the RTB registration I need to provide a contract that gets stamped etc. here is different, so just wondering what's the standard way of working for this matters.

TheBoyConor

OP you sound very inexeprienced with this. And very naive also.

An tenancy contract is only of any use as long as the relationship is good between both parties. Once the relationship sours, in reality the agreement goes out the window and all risk is on the landlord.

And you being in another country it would be insanity to not have an agent here or a very close and truly trusted friend or family member to manage things on you behalf.

You are setting yourself up for massive and expensive nighmares down the road here.

What happens if the property needs major maintenance or repair? eg, a badly leaking roof? No tenant is going to pay for that, nor should they. And how are you going to manage that repair from another country?

And also, the tenants being in construction is not as much a benefit as you think - the flipside is that they will know every trick in the book with which to spoof you with.

dudara

pasquale83 wrote: »

Is it possible to set up a direct debit on the tenant's account?

The landlord would have to issue a monthly direct debit mandate to collect the funds. So don’t think that’s possible.

What you probably mean is that the tenants should set up a monthly standing order from their account to the landlord’s account. That transfer will be recorded in statements and can act as a receipt / proof of payment.

OP - if you’re going to be living abroad, you need to make sure you’re tax compliant.

The_Conductor

Honestly- the very best advice anyone can give you- seeing as you don't intend on coming back to Ireland- is *sell* the property.
I'm really sorry to put it so bluntly- but you appear to be naive in the extreme- and while you might have great tenants at the outset- what happens if they move onto a job somewhere else- and sublet- and your tenants stop paying rent etc?

Also- you are obliged to have an Irish agent if you're not resident in Ireland- and the tenant is liable for any tax on the rental income- normally paid by manner of a straightline 20% deduction on the rent which they forward to the Revenue Commissioners- who give you an annual balancing statement- where its recorded (and increasingly checked against rental records with the RTB) and offset against your Irish tax return.

Honestly- the simplest and safest thing for you to do- is to sell. It makes no sense whatsoever being an absentee landlord- given the regulatory nightmare you'd be operating in.

What happens if one of your builders gets injured- is at home in the house all day- applies for HAP or some other rental assistance- and is accepted- and the property is inspected by the local authority for the HAP payment (which you are legally obliged to accept)- and fails the inspection? Or- even if it passes- the next step is for you, the owner of the house, to provide a C2 tax clearance certificate to the local authority- in order that the tenant claim their rent subsidy........? You are obliged to accept this after all!!!!!

Really- what you're suggesting sounds like a great idea at the outset- but the least hassle manner of making sure you don't have an Irish headache- is to sell the property right here, right now.

pasquale83

dudara wrote: »

The landlord would have to issue a monthly direct debit mandate to collect the funds. So don’t think that’s possible.

What you probably mean is that the tenants should set up a monthly standing order from their account to the landlord’s account. That transfer will be recorded in statements and can act as a receipt / proof of payment.

OP - if you’re going to be living abroad, you need to make sure you’re tax compliant.

as far as I know tenants are supposed to deduct taxes from rent and pay them on behalf

Samuel T. Cogley

pasquale83 wrote: »

Just mention something like: "any changes to the properties need to be agreed beforhand with the landlord"

Also, I guess the number of copies we need to sign is two?

sorry for the silly questions but I used to be landlord in another countries and things are different there. For example for the equivalent to the RTB registration I need to provide a contract that gets stamped etc. here is different, so just wondering what's the standard way of working for this matters.

Two copies, aye. Properly sign both.

With the RTB I just filled out the stuff online.

pasquale83

Samuel T. Cogley wrote: »

Two copies, aye. Properly sign both.

With the RTB I just filled out the stuff online.

thank you

pasquale83

The_Conductor wrote: »

Honestly- the very best advice anyone can give you- seeing as you don't intend on coming back to Ireland- is *sell* the property.
I'm really sorry to put it so bluntly- but you appear to be naive in the extreme- and while you might have great tenants at the outset- what happens if they move onto a job somewhere else- and sublet- and your tenants stop paying rent etc?

Also- you are obliged to have an Irish agent if you're not resident in Ireland- and the tenant is liable for any tax on the rental income- normally paid by manner of a straightline 20% deduction on the rent which they forward to the Revenue Commissioners- who give you an annual balancing statement- where its recorded (and increasingly checked against rental records with the RTB) and offset against your Irish tax return.

Honestly- the simplest and safest thing for you to do- is to sell. It makes no sense whatsoever being an absentee landlord- given the regulatory nightmare you'd be operating in.

What happens if one of your builders gets injured- is at home in the house all day- applies for HAP or some other rental assistance- and is accepted- and the property is inspected by the local authority for the HAP payment (which you are legally obliged to accept)- and fails the inspection? Or- even if it passes- the next step is for you, the owner of the house, to provide a C2 tax clearance certificate to the local authority- in order that the tenant claim their rent subsidy........? You are obliged to accept this after all!!!!!

Really- what you're suggesting sounds like a great idea at the outset- but the least hassle manner of making sure you don't have an Irish headache- is to sell the property right here, right now.

I don't understand why you mention they can sublet if they move out, from here it looks like they need wrtten consent from the landrlord: https://www.threshold.ie/advice/ending-a-tenancy/getting-someone-to-replace-you/ what am I missing?

ouxbbkqtswdfaw

They can sublet while they're there. What are you going to do about it? I don't think the tenancy agreement is worth the paper it's written on.

pasquale83

qd4uglfkr3n2j0 wrote: »

They can sublet while they're there. What are you going to do about it?

Of coruse they can, but that is a breach of the part 4 contract, isn't it? ballet 3.12 under the tenant covenants.

Of course everything can happen and the choice of the tenant is of paramount importance, but if we always think like that we shouldn't do anything!

Also, what would be the difference if I was living in the area? I cannot sleep in the car outside of the house to check what happens!

Anyway, I don't have an agent but someone who can help in case of issues. I will give his name/contact to the tenants as my official representative

ouxbbkqtswdfaw

The tenancy agreement would work if there were prompt punishments on both sides for breaking the agreement. Unfortunately as it is, only the landlord suffers.

pasquale83

qd4uglfkr3n2j0 wrote: »

The tenancy agreement would work if there were prompt punishments on both sides for breaking the agreement. Unfortunately as it is, only the landlord suffers.

I agree that renting is a risky business. Everyone doing the business has to evaluate pros and cons and estimate the risk.

I assure you that it is as you mention not only in Ireland but olso in other EU country. It is intrinsic of the business itself.

ouxbbkqtswdfaw

When everything is taken into consideration, I think you would be foolish to rent a property. There's just too many risks on your part. I bought properties in the boom and will still be repaying long after I retire. That was my own fault. Don't do it. In general I'm at the beck and call of the tenant. I have no powers to institute parts if the agreement for fear I annoy the tenant. The tenant can decide in an instant, to delay or suspend the rent. I can never actually depend on it to be in my account on mortgage day, so I have to make sure that I have my own funds in the account on that day. My advice is don't buy property to rent.

pasquale83

qd4uglfkr3n2j0 wrote: »

When everything is taken into consideration, I think you would be foolish to rent a property. There's just too many risks on your part. I bought properties in the boom and will still be repaying long after I retire. That was my own fault. Don't do it. In general I'm at the beck and call of the tenant. I have no powers to institute parts if the agreement for fear I annoy the tenant. The tenant can decide in an instant, to delay or suspend the rent. I can never actually depend on it to be in my account on mortgage day, so I have to make sure that I have my own funds in the account on that day. My advice is don't buy property to rent.

Doing the business as a private I agree that buying to rent is very risky. I've seen it working properly in The Netherlands where companies are usually the landlords, with huge apartment block developments. In that case the tenant has a company on the other side, and it somewhat "fears" them.

In my case I've been renting out rooms in my house when I was in the country and then I'd like to see how it goes with renting to a whole family. I've taken oll my precautions so far.

The important thing is to always remember that it is a business where people's lifes are involved and those cannot relay on a contract. So it is better to get to know people you rent to beforehand, make a good relationship etc.

ouxbbkqtswdfaw

I understand what you are saying, pasquale. However, when you rent to someone, the relationship is changed. Maybe it's just me, but I can't wait to get out of renting. You see, the tenant has all the aces, you have none. By the time I can get out, the government probably won't allow me to.