Fixed term tenancy on mortgaged property

New2Dubs

We’re moving abroad for a year and are renting out our home. It is not an investment / rental property - it’s our only home & we are returning.
Can anyone advise how this will affect mortgage/interest? (Assume we have to advise AIB?)
Is there an Irish equivalent of UK Consent to Let?
Thanks in advance.

Baby01032012

New2Dubs wrote: »

We’re moving abroad for a year and are renting out our home. It is not an investment / rental property - it’s our only home & we are returning.
Can anyone advise how this will affect mortgage/interest? (Assume we have to advise AIB?)
Is there an Irish equivalent of UK Consent to Let?
Thanks in advance.

There isn’t an Irish equivalent. I’d be more concerned about the insurance. I wouldn’t bother informing bank given it will still be your ppr, you’re not buying another property and are returning after a year. Informing the bank means you are put on a much higher buy to let rate, loose your tracker if you have one. No need.

New2Dubs

Thanks, that’s helpful. So we’re not legally required to advise lender?
Home insurance and mortgage are both with AIB, so may need to explore alternative insurance to avoid any issues.

3DataModem

I have seen very little consequences enforced by lenders as a result of not notifying them. You are also contractually obliged to advise them of any change in circumstance (change in job etc) but nobody does this in practice.

If you are only leaving for a few years max, the only important consideration is house insurance. You need to change this to "landlords insurance" (i.e. buildings, your contents, and liability). Also please for the love of god get a good agent and ensure they focus on getting you a good tenant... if you want your place back in a year the quality of tenant is critical. Don't leave any furniture you care about in the house, move it into storage. Tenants don't view your lovely chest of drawers the same way you do.

Good luck.

AnRothar

New2Dubs wrote: »

We’re moving abroad for a year and are renting out our home.

The tenant will get part 4 rights after 6 months.
Be fully aware of the importance of this.

It is now your "house" but the tenants "home".

Move any "treasured" items to storage.

Understand your obligations towards the tenant as a landlord (minor repairs/faulty fixtures, etc.). Getting an agent may mitigate this.

Understand your obligations to Ireland and UK regarding tax due on rental.

You insure the physical structure and fixed fittings. The tenant should insure their contents.
The furniture you left in situ could be a grey area so read the policy properly.

Be sure that the tenant will be gone before you and your family are due to return.

Remember to treat this as a business transaction.

New2Dubs

Thanks to all for your sound advice. Much appreciated.
We’ve rented previous flat in London, so are aware of landlord basics, but this is the first time we’ve rented out property in Ireland.
We’ve instructed the same agent who sold the house last year. Tenants seem a decent young family (we’ve not met them - leaving that to agent).

Caranica

New2Dubs wrote: »

Thanks to all for your sound advice. Much appreciated.
We’ve rented previous flat in London, so are aware of landlord basics, but this is the first time we’ve rented out property in Ireland.
We’ve instructed the same agent who sold the house last year. Tenants seem a decent young family (we’ve not met them - leaving that to agent).

Take the advice above about putting anything you care about into storage.

I'll tell you about the lovely young family our "great" agent got for us. Damage included: holes in walls where they attempted to hang stair gates; crunchy carpets where it appeared they never cleaned up any spills; broken toilet seats; bathroom sink off the wall; doors hanging off lower kitchen presses, used as swings. And that's only a fraction of it. To make things worse we had to pay them to leave.

Of course there are great tenants out there but I just wanted to alert you that it's not always as straightforward as it might look.

New2Dubs

Caranica wrote: »

Take the advice above about putting anything you care about into storage.

I'll tell you about the lovely young family our "great" agent got for us. Damage included: holes in walls where they attempted to hang stair gates; crunchy carpets where it appeared they never cleaned up any spills; broken toilet seats; bathroom sink off the wall; doors hanging off lower kitchen presses, used as swings. And that's only a fraction of it. To make things worse we had to pay them to leave.

Of course there are great tenants out there but I just wanted to alert you that it's not always as straightforward as it might look.

I know it’s always a gamble with tenants. We’ve used inventorys previously to compare before/after for damage.
We’ve been obliging with tenants requests, so are hopeful they’ll respect our home in return.

spaceHopper

New2Dubs wrote: »

I know it’s always a gamble with tenants. We’ve used inventorys previously to compare before/after for damage.
We’ve been obliging with tenants requests, so are hopeful they’ll respect our home in return.

Why would a family want to to rent from you for one year, OK that could turn into more but they could also be turfed out after a year. This doesn't sit right with me but there is a high risk that once they are in they won't leave. I'd strongly advise you to vet them yourself don't trust the agent.

I you must rent the house, empty it put the basics in and rent to a group of younger people who can move home when you want the house back.

ted1

Op try to get people who are renovating their own home. It’s really the only way you can be sure that they’ll move out when you want the house back. They’ll also understand the value of things.

Claw Hammer

New2Dubs wrote: »

We’re moving abroad for a year and are renting out our home. It is not an investment / rental property - it’s our only home & we are returning.
Can anyone advise how this will affect mortgage/interest? (Assume we have to advise AIB?)
Is there an Irish equivalent of UK Consent to Let?
Thanks in advance.

You mortgage contract will require that you obtain the consent of the bank before you lease the property. In practice, nobody does this.

Chris_5339762

Just bear in mind that if you get a bad tenant that refuses to leave at the end of the year and claims all their rights, and knows how to work the system, that you would be about two years and a lot of money in the hole trying to get them out.

Edit: I wouldn't rent it out if it were me. Not worth the considerable hassle. Get a family member to check on it or (in non Covid times) fly home every 3 weeks or so, run the heating and water, and check if its ok.

Browney7

I'd hesitate about renting to a family (1 year may become longer) and I'd also hesitate at giving a fixed term lease of 12 months as you are giving away your option to remove for any reason in the first six months (Covid restrictions aside).

New2Dubs

Thanks for above. It’s a young couple with a baby. I’m not aware of their circumstances or why they wish to rent for a year. Is this something I can reasonably ask the agent to explore?

Bio Mech

Chris_5339762 wrote: »

Just bear in mind that if you get a bad tenant that refuses to leave at the end of the year and claims all their rights, and knows how to work the system, that you would be about two years and a lot of money in the hole trying to get them out.

Edit: I wouldn't rent it out if it were me. Not worth the considerable hassle. Get a family member to check on it or (in non Covid times) fly home every 3 weeks or so, run the heating and water, and check if its ok.

I also wouldn’t rent it for a year.

My sister had exactly the above problem. Tenant refused to leave after the year. Claimed they weren’t given proper notice (they were). And as the poster said above worked the system. Then the rent stopped. Took months to sort and she had to move in with my parents. The place also needed thousands to fix when she moved back in (damaged fittings, carpets ruined). The deposit didn’t cover it and she was 4 months with no rent at that stage anyway.

Not worth the risk IMO if you can possibly avoid it. Not for your home.

JimmyVik

New2Dubs wrote: »

Thanks to all for your sound advice. Much appreciated.
We’ve rented previous flat in London, so are aware of landlord basics, but this is the first time we’ve rented out property in Ireland.
We’ve instructed the same agent who sold the house last year. Tenants seem a decent young family (we’ve not met them - leaving that to agent).

Ask yourself why landlords are leaving the market in Ireland.
Its not like renting in London.

You are taking a big risk renting your house for the year.

spaceHopper

New2Dubs wrote: »

Thanks for above. It’s a young couple with a baby. I’m not aware of their circumstances or why they wish to rent for a year. Is this something I can reasonably ask the agent to explore?

you can ask but tread carefully you could land yourself in trouble if you don't rent to them and the agent promised, especially if HAP is involved. Tell the EA you need more details about them, firstly why are they moving, especially as it a fixed no extension lease. Ask for the number of their last landlord not the current one and check their references

Claw Hammer

spaceHopper wrote: »

a fixed no extension lease.

There is no such thing. part 4 kicks in after 6 months. Notice can't be given in a lease.

Woah

You would be better off keeping one room in your house for yourself and letting them use the rest of the house as licensees. That way it is much easier to get them out. I personally wouldn't risk it if you decide to go the landlord route. After 6 months occupancy the tenant gains a lot of rights and could make it quite difficult to get them out.

suilegorma

If it was me I would advertise it on Airbnb and try to find someone for a few months eg someone doing renovations or selling before buying. I'm sure you could find an agent to clean between lettings, and even do a check or a video call with you to check all is well. You might have some void periods but it would be safer to ensure the house is available on your return.

utmbuilder

Off your trolley to rent it

Insane madness

50% will be tax to revenue impossible to hide, if you do hide it and they find out they put a lean on the property with fines

After 6 months takes 2 years to get Tennant out and if they don't pay no come back. You get no rent and cover your own mortgages and damages.

It's not a quick buck, rtb registrations, 10,000 homeless not a chance they are out in 12 months. After 6 months they might offer hap and you can't refuse more fiscal attention.

Try get a family member to rent it at the mortgage value, half price someone who will owner leaving and covering the mortgage.

Tax wise its 50% and there's no dodging it anymore.

Your house gets trashed and there's not a court in Ireland willing to pursue a broke Tennant.

New2Dubs

Thanks for responses.

Has anyone any positive experiences?! We’re aware of tax implications and aren’t interested in making ‘a quick buck’, but enough to cover mortgage, agent & any repairs.

We’ve reiterated to agent our intention to return, he has advised we give notice to tenants 3 months before return date.

I wasn’t expecting so many people to advise against!

utmbuilder

The Irish system is very broke. Not like the UK with so much moving around due to landlords exiting tennents know all the rules.

When they don't pay you issue a 2 notices I forget the exact times, 14 days then 28 days, if a single word is wrong in this notice its invalid and you start again.

After the notice you file an adjudication to the rtb to say they have not left 3 month process, another month to get the decision.

Then they ignore that and you have to appeal to a tribunal a 6 month process with a month or 2 to get that decision.

Then that decision is not legally binding so you go beg the rtb to pay a court fee for a judge to enforce the order another 7 months, then you wait for the sheriffs to evict about 2500 euro and another 1 or so wait.

You the landlord have to show up to all the hearings if the tennent doesn't show up it doesn't matter means they are not giving a defense.

While all this is going on you have to keep up your mortgage to avoid ruining your own life.

It's insane.

Claw Hammer

New2Dubs wrote: »

Thanks for responses.

Has anyone any positive experiences?! We’re aware of tax implications and aren’t interested in making ‘a quick buck’, but enough to cover mortgage, agent & any repairs.

We’ve reiterated to agent our intention to return, he has advised we give notice to tenants 3 months before return date.

I wasn’t expecting so many people to advise against!

There is a view among some RTB adjudicators that notice can't be issued during a fixed term. Even if you give notice, the tenant can refuse to leave and force you to begin an overholding dispute. The tenancy continues until the dispute is resolved. Resolving a dispute can take years.

JimmyVik

Think about it.

Family is lovely and moves in. 3 months before you come back they get notice to leave. They look around and rents have increased and there is little for them. Besides they are settled now. Then they say lets stay where we are. So now you have to go through the motions for 2 years or more to get them out. Then you have to rent a place to stay for the 2 years yourself. And you have to pay to keep the place in tip top condition for them. All the while praying they still pay their rent every month, because even if they dont pay they still dont have to move out for over 2 years.

Ask the estate agent if he is so confident, will he cover any expenses (rent on somewhere for you to live plus mortgage and upkeep on the house you thought you owne ) if that happens when he gives the 3 months notice. He will be only too aware of what can happen and will say no, with about a thousand words.


And be aware there is no shortage of people around running this con now. The problem is that they get away with it and move on to the next victim.


And they will look like the nicest family you have ever seen.

Noone ever saw the con coming that conned them.

New2Dubs

JimmyVik wrote: »

Think about it.

Family is lovely and moves in. 3 months before you come back they get notice to leave. They look around and rents have increased and there is little for them. Besides they are settled now. Then they say lets stay where we are. So now you have to go through the motions for 2 years or more to get them out. Then you have to rent a place to stay for the 2 years yourself. And you have to pay to keep the place in tip top condition for them. All the while praying they still pay their rent every month, because even if they dont pay they still dont have to move out for over 2 years.

Ask the estate agent if he is so confident, will he cover any expenses (rent on somewhere for you to live plus mortgage and upkeep on the house you thought you owne ) if that happens when he gives the 3 months notice. He will be only too aware of what can happen and will say no, with about a thousand words.


And be aware there is no shortage of people around running this con now. The problem is that they get away with it and move on to the next victim.


And they will look like the nicest family you have ever seen.

Noone ever saw the con coming that conned them.

Maybe I’m naive, but I would never to do that to another person, so don’t expect it in return. What happened to simply doing the right thing?!

JimmyVik

New2Dubs wrote: »

Maybe I’m naive, but I would never to do that to another person, so don’t expect it in return. What happened to simply doing the right thing?!

You would think that the law wouldnt allow people to do that to other too wouldnt you. But the law is what enables this.

All you want is to be able to agree with someone to take your house for one year and then move out. Suits both parties. Deal done. You expect both sides to be held to that. But no, the law says you are not allowed to do that. They can screw you over, but you, as the landlord are held to it.

AnRothar

New2Dubs wrote: »

Maybe I’m naive, but I would never to do that to another person, so don’t expect it in return. What happened to simply doing the right thing?!

To misquote Ben Kenobi good and evil depend on your point of view.

To a family renting a home (in this case your house) they can perceive it as not the right thing for them to have to move just when they have gotten settled in their home.

Leave emotion at the door.

Browney7

Op, depending on your location, a local multinational may be interested in renting for the year or if near a hospital someone on their placement/rotation/secondment may be interested also.

You need to rent to a more "transient" type of tenant in my view who will move on easily enough. That said, if you rent to someone, it's more than likely going to go fine and the doomsday scenario won't happen. But in your case, the fact you need the property back for yourself to live in means you need to make that probability of the doomsday scenario occurring as low as possible.

Caranica

Browney7 wrote: »

Op, depending on your location, a local multinational may be interested in renting for the year or if near a hospital someone on their placement/rotation/secondment may be interested also.

You need to rent to a more "transient" type of tenant in my view who will move on easily enough. That said, if you rent to someone, it's more than likely going to go fine and the doomsday scenario won't happen. But in your case, the fact you need the property back for yourself to live in means you need to make that probability of the doomsday scenario occurring as low as possible.

This is a much better idea than renting to a family. Not much inward traffic to multinationals at the moment but hospitals do 6 month rotations.

3DataModem

OP... what is described above is absolutely not the norm but does happen. When I moved away it was for 2-3 years minimum and thankfully the tenants paid on time and moved out on time.

For a 1 year departure I would be on the hunt for a family member or reasonably trusted colleague to give the place at a fair discount.