Renting your house to the Council, long term?

Has anyone done this, or can ye provide any insight into it?


A friend of mine has a house with a small amount owed on the mortgage. He wants to move elsewhere (closer to family). He hasn't really got any savings, though.


His plan, is to see can he use the 'guaranteed income' from the Council, plus the house he already owns, as security against buying a new house. I'm not sure if that'd work or not, but it did get me thinking about the whole 'renting to the council' thing.




I wonder do many do it, and does it tend to work out okay for you, when doing so? I myself live in a council area and could do this with my own house in future if i was stuck or in a similar situation to my friend (though I'm unsure if you can use property as collateral against another without even having a deposit to give?).

There seem to be two schemes; a long term one where the Council do everything, and a shorter term one where the owner maintains a landlord status and maintenance responsibility (why you would do that, I don't know!).


Its the long term one he (and potentially me, in a decade or so) would be interested in.




Has anyone had any experience with the scheme in place?

Mitzy

Everyone has many different experiences.

I rented a house to Dublin City Council for approximately 10 years.

To say the house was destroyed is an understatement. It cost me over €25k to put it back to a habitable state.
The council didn't want to know even though they were made aware of the ongoing issues for a long time and I stuck between a rock & a hardplace between the RTB & the council.
It took me 2 years to get the tenant out. I suppose the only saving grace was that the rent was guaranteed by the council but I would never do it again.

stargazer 68

As Mitzy says there will be lots of different experiences - good and bad
Just be aware if you go the long term option and you then need your property back before the time is up its a long and difficult process - impossible in some circumstances.

JustAThought

Everyone has good and bad stories but the media only tell the poormouth bad landlord ones. You won’t catch the daily tail or Indo telling bleeding heart stories of homeowners who have rented their house come hime to find the kitchen stripped out and sold for a couple of hundred euro on a facebook site, or bathrooms so wrecked it has coust thousands to repair the damage, or tenants who were struck off their social welfare for cheating or non compliance who then sit in the hiuse and no rent is paid and they run up bills in electricity and gas until they turn off the services and it is e200 each to have them reinstated - after they are piad, nor of people taking a lease and then doing a massacre job on the interior to accommodate their ‘needs’ and moving in their brothers/ sisters and family and the nappies going down the shores, and filth and refuse bins piled high in the garden because they wont pay for a bin collection etc.

In short - from the above experiences had by me and locals/ friends who made the huge mistake of renting to the ‘council’ -I’d say NO. You have no control or idea who is in and no hope of getting them out.

You’d be better renting privately and screening them vigorously and asking, as many do, for a 3 month rent deposit upfront to offset defaulters on bills or rent and potential damaged. And a vigurous look and copy of official ID, LinkedIn profiles, work references and contracts and back account statements. Knowing the reality of tenants paying I doubt many banks would loan based on a projected payment from a tenant - they would most likely not. You could leverage the house though as a asset but why take that risk to give someone renting the chance to have the bank take your hime from you if their non payment of rent makes you behind on your financial repayments. Too much of a risk.

Mad_maxx

Mitzy wrote: »

Everyone has many different experiences.

I rented a house to Dublin City Council for approximately 10 years.

To say the house was destroyed is an understatement. It cost me over €25k to put it back to a habitable state.
The council didn't want to know even though they were made aware of the ongoing issues for a long time and I stuck between a rock & a hardplace between the RTB & the council.
It took me 2 years to get the tenant out. I suppose the only saving grace was that the rent was guaranteed by the council but I would never do it again.

Did the council just leave the tenant in situ upon expiry of the lease?

Mitzy

Mad_maxx wrote: »

Did the council just leave the tenant in situ upon expiry of the lease?

Yes. Under the new rental laws you cannot simply remove the tenant once the agreement with the Council ends. You need to have the legal reasons for ending the tenancy eg selling etc.
Although the agreement with them ended I was unable to remove the tenant until I went through the lengthy process with the RTB adjudication. All was found in my favour.

I have records of contacting the council on 9 separate occasions raising my concerns about the state of the house following inspections done by an agent on my behalf. I requested that the council do their own inspections also but these were never done. It was a very costly mistake!

helimachoptor

Im with SDCC, we've had the same tenants for 12 or so years.
For the most part they have been fine, they were very nitpicky the first couple of years, but tbh that was more because they moved from a different part of ireland back to where the house is and they view it as their home.

We've done some major stuff on the house in the first 5 years (stuff we'd have to do if we were living there anyway) New boiler and had to relay roof tiles on an extension due to water ingrress.

Our tenants are in it for the longterm and so are we, but last year is the first year we had cash left over after paying the bills. My sister in law is an accountant so she saves us some money, but the last 4/5 years I've done the accounts.

Mitzy

JustAThought wrote: »

Everyone has good and bad stories but the media only tell the poormouth bad landlord ones. You won’t catch the daily tail or Indo telling bleeding heart stories of homeowners who have rented their house come hime to find the kitchen stripped out and sold for a couple of hundred euro on a facebook site, or bathrooms so wrecked it has coust thousands to repair the damage, or tenants who were struck off their social welfare for cheating or non compliance who then sit in the hiuse and no rent is paid and they run up bills in electricity and gas until they turn off the services and it is e200 each to have them reinstated - after they are piad, nor of people taking a lease and then doing a massacre job on the interior to accommodate their ‘needs’ and moving in their brothers/ sisters and family and the nappies going down the shores, and filth and refuse bins piled high in the garden because they wont pay for a bin collection etc.

In short - from the above experiences had by me and locals/ friends who made the huge mistake of renting to the ‘council’ -I’d say NO. You have no control or idea who is in and no hope of getting them out.

You’d be better renting privately and screening them vigorously and asking, as many do, for a 3 month rent deposit upfront to offset defaulters on bills or rent and potential damaged. And a vigurous look and copy of official ID, LinkedIn profiles, work references and contracts and back account statements. Knowing the reality of tenants paying I doubt many banks would loan based on a projected payment from a tenant - they would most likely not. You could leverage the house though as a asset but why take that risk to give someone renting the chance to have the bank take your hime from you if their non payment of rent makes you behind on your financial repayments. Too much of a risk.

I couldn't agree more. You can't imagine the damage a person can do to a house or the filth some people will live in.

Mad_maxx

Mitzy wrote: »

Yes. Under the new rental laws you cannot simply remove the tenant once the agreement with the Council ends. You need to have the legal reasons for ending the tenancy eg selling etc.
Although the agreement with them ended I was unable to remove the tenant until I went through the lengthy process with the RTB adjudication. All was found in my favour.

I have records of contacting the council on 9 separate occasions raising my concerns about the state of the house following inspections done by an agent on my behalf. I requested that the council do their own inspections also but these were never done. It was a very costly mistake!

Who selected the tenant at the beginning of the lease?

Was the tenancy registered with the RTB from the start?

I've a house leased to Limerick Council since mid 2018, discovered last year that they had outsourced management to a housing charity, i inspected the place last May, place was a pig sty but I've yet to be asked to spend a penny on the joint in two years, my ten year lease does not require registration with the RTB, nor have I any dealings with the tenant, i didn't select the tenant and I've never met them

The councils use those long term lease agreements to house the dysfunctional, my house cost very little and is in a bad area so I see it as a worthwhile punt, i wouldn't do it with a house worth over 100k however

Thoie

Mitzy wrote: »

Everyone has many different experiences.

I rented a house to Dublin City Council for approximately 10 years.

To say the house was destroyed is an understatement. It cost me over €25k to put it back to a habitable state.
The council didn't want to know even though they were made aware of the ongoing issues for a long time and I stuck between a rock & a hardplace between the RTB & the council.
It took me 2 years to get the tenant out. I suppose the only saving grace was that the rent was guaranteed by the council but I would never do it again.

My understanding of the 10 year lease was that the council returned the property to you at the end of the 10 years, in the same condition they got it. Is that not the case? I know with the shorter leases, you're still the landlord, and have to do maintenance etc.

Looking at Cork City Council leaflet it says

• The local authority or AHB will maintain the property internally for the term of the lease.
• Properties will be returned to the property owner in good condition at the end of the lease term, subject to normal wear and tear.

SEPT 23 1989

Mitzy wrote: »

Everyone has many different experiences.

I rented a house to Dublin City Council for approximately 10 years.

To say the house was destroyed is an understatement. It cost me over €25k to put it back to a habitable state.
The council didn't want to know even though they were made aware of the ongoing issues for a long time and I stuck between a rock & a hardplace between the RTB & the council.
It took me 2 years to get the tenant out. I suppose the only saving grace was that the rent was guaranteed by the council but I would never do it again.

Do the council not have to give you back the house in the same condition as was given to them?

Mitzy

Mad_maxx wrote: »

Who selected the tenant at the beginning of the lease?

Was the tenancy registered with the RTB from the start?

I've a house leased to Limerick Council since mid 2018, discovered last year that they had outsourced management to a housing charity, i inspected the place last May, place was a pig sty but I've yet to be asked to spend a penny on the joint in two years, my ten year lease does not require registration with the RTB, nor have I any dealings with the tenant, i didn't select the tenant and I've never met them

The councils use those long term lease agreements to house the dysfunctional, my house cost very little and is in a bad area so I see it as a worthwhile punt, i wouldn't do it with a house worth over 100k however

When you lease to Dublin City Council you don't have any say on the tenant they put in place. You are assured that they are vetted on their side (although I now know this is not the case).
The tenancy was of course registered with the RTB since it's inception.
DCC still manage housing internally but my experience is that they do this very badly.

The agreement I had was initially for 4 years & then I renewed it. For the first 4 years there was no problems whatsoever which is why I didn't have any issue renewing the agreement but in the following 4 years the house was wrecked.
I did my own maintenance throughout the lease - new boiler & whatever else was needed but towards the end I had 2 tradesmen refusing to do any work on the house due to the state it was in.

Mitzy

SEPT 23 1989 wrote: »

Do the council not have to give you back the house in the same condition as was given to them?

It says on their website that you should get the house back in a good condition minus wear & tear. Anyone who viewed my house agreed that the damage was way beyond normal wear & tear.
The council didn't want to know. They offer a maximum of 1 months rent for damage. I have had no choice but to pursue this legally with DCC but that might take years.

Thoie

I think the difference, Mitzy, is that you didn't have a single 10+ year lease with them (where they take responsibility for the interior), but a few shorter leases, that happened to add up to over 10 years. It looks like with the shorter ones you're still the landlord with all the responsibility for maintenance

The main differences between this and a longer term leasing contract (Option 1) are that the owner will:
• Retain responsibility for day-to-day property maintenance.
• Be the landlord to tenants nominated by the local authority.

At the end of term:
Property Owner retains ongoing maintenance responsibility for the property as normal.

Mitzy

My agreement was not a 10 year lease and I was responsible for maintaining the house but as far as I am aware with the council long term agreements you don't have any say about who they let the property to.
This is a big issue as they can, and have let your house to people you would never normally let through the door.

I'm just sharing my experience of letting in this manner and I would advise anyone against it.

Diceicle

Mitzy wrote: »

Everyone has many different experiences.

I rented a house to Dublin City Council for approximately 10 years.

To say the house was destroyed is an understatement. It cost me over €25k to put it back to a habitable state.
The council didn't want to know even though they were made aware of the ongoing issues for a long time and I stuck between a rock & a hardplace between the RTB & the council.
It took me 2 years to get the tenant out. I suppose the only saving grace was that the rent was guaranteed by the council but I would never do it again.

Just for my own nosiness.....but I would have thought the council would be obligated to return the property to you in the same condition (subject to some normal wear and tear). Do they not act as a signee / guarantor of sorts? I take it they don't.

Diceicle

KKV wrote: »

Has anyone done this, or can ye provide any insight into it?

Not seen anyone mention it yet - but AFAIK the long-term rental to the council also comes with a ~20% haircut in terms of the market rent (were you to rent it out in the normal fashion)

Mitzy

Diceicle wrote: »

Just for my own nosiness.....but I would have thought the council would be obligated to return the property to you in the same condition (subject to some normal wear and tear). Do they not act as a signee / guarantor of sorts? I take it they don't.

I was with the RAS Scheme and I understood that the house would be returned to me in a good condition minus wear & tear too but this is not the case.
The are two agreements in place. One between you & the council & one between you and the tenant. This allows them to distance themselves from issues.

The only guarantee they give is the rent payment.

I obviously expected that once the agreement ended I would have to do work to the house however the damage was far beyond any reasonable person's expectations. An inspector did come out after the tenant left when I demanded it & he agreed with me that the damage was significant but when it went higher up the chain in DCC they didn't want to know.

Mad_maxx

Mitzy wrote: »

When you lease to Dublin City Council you don't have any say on the tenant they put in place. You are assured that they are vetted on their side (although I now know this is not the case).
The tenancy was of course registered with the RTB since it's inception.
DCC still manage housing internally but my experience is that they do this very badly.

The agreement I had was initially for 4 years & then I renewed it. For the first 4 years there was no problems whatsoever which is why I didn't have any issue renewing the agreement but in the following 4 years the house was wrecked.
I did my own maintenance throughout the lease - new boiler & whatever else was needed but towards the end I had 2 tradesmen refusing to do any work on the house due to the state it was in.

You're arrangement must have been slightly different, long term leases don't involve the RTB, perhaps this wasn't always the case?

I'm only responsible for structural maintenance and that doesn't include the boiler, you're arrangement sounds a bit like RAS, if it was?, that's different to mine and what the OP is asking about

Mad_maxx

Diceicle wrote: »

Not seen anyone mention it yet - but AFAIK the long-term rental to the council also comes with a ~20% haircut in terms of the market rent (were you to rent it out in the normal fashion)

It does so be sure to point to high rent properties when negotiating, worked for me

Mad_maxx

Thoie wrote: »

I think the difference, Mitzy, is that you didn't have a single 10+ year lease with them (where they take responsibility for the interior), but a few shorter leases, that happened to add up to over 10 years. It looks like with the shorter ones you're still the landlord with all the responsibility for maintenance

Correct, he didn't have a long term lease in the first place

The same point still stands however, the councils use those schemes to house the otherwise unhousable