No more 4% rent increases

agoodpunt

C14N wrote: »

I think the best solution to this is to establish a system similar to what has happened in other countries, where there is some state body who manage and hold deposits as a third party and can arbitrate in the event of a dispute. Otherwise it's absolutely in an LLs interest to ask for more.

Its the selective bits from other countries on threshold's tenant wish list only, been considered for our shrinking so more exp private rental market.

Its normal in eurozone more than 1 month's rent but if you can find a country that has no dep lets implement that.

C14N

C14N wrote: »

It's understandable why someone would want to do it, but it's also pretty discriminating.

If someone on HAP gets served a notice to quit because the landlord wants the property back for family, refurbishment or sale. The tenant gets onto their local housing authority who pays their HAP and the housing authority tells them to stay living where they are and they’ll keep paying HAP over regardless of whether this is after they should have vacated the property.

So your family member who was meant to move in is now in limbo, the refurbishments that you’ve had invest in prior to going ahead as they need the OK from RTB are stalled, the sale that you were relying on cannot proceed.

Who’s the one being discriminated against now?

Claw Hammer

C14N wrote: »

I think the best solution to this is to establish a system similar to what has happened in other countries, where there is some state body who manage and hold deposits as a third party and can arbitrate in the event of a dispute. Otherwise it's absolutely in an LLs interest to ask for more.

That could make things worse for tenants. The tenant would have to apply to that body for the return of the deposit after they leave. It could take some time for the tenant to get their deposit back even if the landlord doesn't complain about rent owed or damage. In most cases, believe it or not, the tenant gets their deposit back straight away and can use it to pay their next deposit. If a bureaucracy starts with returning deposits, it could take a tenant months to get it back. It might mean a tenant is unable to move to a better deal thus reducing competition.

Flinty997

Claw Hammer wrote: »

That could make things worse for tenants. The tenant would have to apply to that body for the return of the deposit after they leave. It could take some time for the tenant to get their deposit back even if the landlord doesn't complain about rent owed or damage. In most cases, believe it or not, the tenant gets their deposit back straight away and can use it to pay their next deposit. If a bureaucracy starts with returning deposits, it could take a tenant months to get it back. It might mean a tenant is unable to move to a better deal thus reducing competition.

What you need is a third party that holds the deposit that only releases it where its claimed by the LL and upheld by the PRTB. A LL would only need to check that the third party has the deposit. The money would never actually be transferred between different rentals. Like an Escrow.

Flinty997

So back to the OPs question.

Piehead wrote: »

So a lot lower increases based on inflation?
https://jrnl.ie/5482044

You have to ask, is this yet another knee Jerk reaction, or a carefully considered strategy. Since they've not offered any detailed thinking, or plan going forward, I think we can assume the former.

That it targets a symptom not a problem itself, supply. Suggests its another re-arranging of the furniture, and not meaningful action.

Baby01032012

Badly though out actions like this hurt everyone. I’ve a house rented out, haven’t increased the rent in 5 years, didn’t want to. Good tenants, rent well below market but happy with the amount. However if I don’t get a rent increase in this week I’ll be limited to an inflation rate of c 1.7% based on the last rent review of 5 years ago. I’m not going to increase it by 20% which I can under rpz (4% per year for 5 years) I’m increasing it by 10%. I’ve given advance notice before I send out the official review and tenants are happy.

Claw Hammer

Flinty997 wrote: »

What you need is a third party that holds the deposit that only releases it where its claimed by the LL and upheld by the PRTB. A LL would only need to check that the third party has the deposit. The money would never actually be transferred between different rentals. Like an Escrow.

How can the new landlord accept that? The new landlord wants the deposit paid with no potential claim for it from anybody. It is just adding bureaucracy to do something which will drive up rental costs and make it more difficult for many7 tenants to move.

handlemaster

Baby01032012 wrote: »

Badly though out actions like this hurt everyone. I’ve a house rented out, haven’t increased the rent in 5 years, didn’t want to. Good tenants, rent well below market but happy with the amount. However if I don’t get a rent increase in this week I’ll be limited to an inflation rate of c 1.7% based on the last rent review of 5 years ago. I’m not going to increase it by 20% which I can under rpz (4% per year for 5 years) I’m increasing it by 10%. I’ve given advance notice before I send out the official review and tenants are happy.

When they brought in the RPZ you should have been upping the rent the max. No thanks for keeping rent below open market value.

Flinty997

"....When they brought in the RPZ you should have been upping the rent the max. No thanks for keeping rent below open market value..."

In fact you're effectively penalized for doing so.

JimmyVik

https://www.boards.ie/discussion/comment/117558895#Comment_117558895

At the moment you have choices.

Increase the rent to market rate and lose the tenants you have, but preserve the value of your property and the rent it can achieve.

In a few months you may have no choices at all. I think whats coming next, and soon, is that the whole country will be an RPZ, rent will be locked to inflation (thats here), and you wont be permitted to sell your property while there is a tenant in it.

At that point your goose is well and truly cooked.

Some people were dithering the last few weeks about increasing their rent as high as they could get it. Today they are sitting there looking at lower value properties and inflation locked rents.

If you have an investment you must get the most available that you can get for it. Otherwise its a charity.

JimmyVik

https://www.boards.ie/discussion/comment/117561220#Comment_117561220

Dont forget that the government get half of all rent at the moment, They are very happy for rents to increase. No way will they reduce this tax take. But its like taxing cigarettes. They want to look like they are doing something but they will tax them just enough so as not to stop you smoking.

JimmyVik

https://www.boards.ie/discussion/comment/117561488#Comment_117561488

Its even crazier. Your pool of potential buyers if you were to sell now is reduced. No investor would buy your property so you are stuck only with the market of owner occupiers.

rightmove

https://www.boards.ie/discussion/comment/117677980#Comment_117677980

my main problem with this is that I think its unconstitutional but no one has the means or time to take a case like they did back in the early 80's

JimmyVik

The problem is that if you lose you would be ruined.

There was a group going to take a case a few years ago but they were pounced on by the minister and told that it was illegal for them to group together and take a case.

Basically if you take a case it has to be a single person and they are not allowed to be funded by anyone else.

So thats a massive risk for one person to take, so noone can take it.

And the REITs arent interested because all this suits them.

Jmc25

https://www.boards.ie/discussion/comment/117682308#Comment_117682308

This has been mentioned before but I can't get on board with the idea that no landlord has the means to take a case.

I'm not saying all (or even the majority of) landlords are wealthy but the fact is many of them are. and It's not believable to me that they've been too afraid of taking case because of the financial consequences of losing, or indeed the time committment involved - which is basically next to none for them personally as presumably they'll be engaging solicitors to take the case on their behalf.

This idea that the poor marginalised landlords don't have the means to access the law is laughable to be honest.

DubCount

https://www.boards.ie/discussion/comment/117682946#Comment_117682946

For this kind of case, you're talking about going to the High Court. If you win, the state are highly likely to appeal to the Supreme Court. If you lose, you could have to swallow your own costs and the States costs of the case. You're risking a 7 figure sum to roll the dice on this. There are not many individuals that can take that kind of risk. Those that can afford to throw hundreds of thousands of Euro (or more) on a court case, are not the ones who are worrying about RPZ putting them in the poor house. The only Landlords with the deep pockets to take a case, are REITS, and they are doing very well out of small landlords leaving the market - so no incentive.

FishOnABike

https://www.boards.ie/discussion/comment/117682946#Comment_117682946

Small time landlords with a handfull of properties couldn't risk it as High Court costs could easily reach a six or seven figure sum.

It would take a landlord with a large property portfolio who was smart enought to split that portfolio into a number of limited companies and who was willing to risk all the assets of one of those limited companies to take the case to court.

Even adopting that approach the risk / reward ratio just wouldn't stack up. Risk losing several properties for the sake of a few percent more rent - no sensible investor would take the risk.

Flinty997

https://www.boards.ie/discussion/comment/117682946#Comment_117682946

As most only have one property, and as people are fond of saving the "profit" is only when the sell the property.

How do they fund a court case? You spend less selling it and buying another.

If you have 200 properties its not worth your time.

Jmc25

I did say that I don't believe all landlords are wealthy or could afford this and I take your points re small landlords.

But is it believable that there are NO landlords with the means to do this - assuming they thought they had a case? It's absolutely not.

Some small landlords have done badly out of RPZs. That doesn't change the fact that some very wealthy people are landlords and could (would) take a case if they thought they had a chance of winning.

DubCount

https://www.boards.ie/discussion/comment/117685372#Comment_117685372

Its not that there are NO landlords that could afford a case. The scale of the costs involved means there are very very few. A million Euro is a lot of money - even to someone who is wealthy. How rich would you need to be to risk €1m - its only an option for multi-millionaires. Anyone with that kind of wealth will not just be residential landlord. They will have foreign investments, commercial property, shares, bonds and lots of other investments. There is not enough benefit to them personally to take a case with that much cost. Its easier for them to just move investments into another asset class.

Jmc25

https://www.boards.ie/discussion/comment/117686069#Comment_117686069

Still, the fact that *not even one* landlord has taken a case would suggest that nobody believes a challenge would be successful or would be a worthwhile endeavour.

I'm arguing that there are many landlords out there with the means, time, interest, and brass neck to take that case if they believed it was winnable.

I'd go further and say that there are landlords out there who would take the challenge on a point of principle - regardless of whether winning would actually be of significant financial benefit to them or whether the whole ordeal would be "worth it" for them in any logical sense.

I've significant sympathy for individual small landlords who are disproportionately affected by this and I completely see why they could not and would not take a case. But taken as a whole, landlords have significant means to access the law - far, far more so than many other sections of society.

DubCount

https://www.boards.ie/discussion/comment/117687478#Comment_117687478

Lots believe a case could be successful.

Its not a worthwhile endeavor for any individual to take a case. Dropping a vast sum of money on legal fees which would take forever to recoup in increased rents doesn't make sense.

You really are looking for a unicorn. A LL with enough wealth to be able to risk a million Euro or more, that wants to prove a point of principle, in stead of just picking other investments.

Flinty997

https://www.boards.ie/discussion/comment/117687478#Comment_117687478

You want to have extremely deep pockets to go down that route.

Anyone with that kinda money didn't get it from making dumb financial decisions.

Heraclius

https://www.boards.ie/discussion/comment/117688438#Comment_117688438

Aren't there some pretty large companies acting as landlords? I'm pretty sure they have deep enough pockets.

Flinty997

https://www.boards.ie/discussion/comment/117688446#Comment_117688446

If you have a lot of properties, a few of them being on low rent makes no real impact. If its your only property then its a big deal.

Jmc25

https://www.boards.ie/discussion/comment/117688438#Comment_117688438

This really is neither here nor there in relation to this particular issue but I strongly believe there are a lot of wealthy people who often make unwise financial decisions.

There's a particular type of entity or person who, despite having the means (and believing they could win) wouldn't touch the issue because, as has been mentioned, it's not worth their while.

But there's another type of bull headed and downright arrogant wealthy person who would be absolutely all over it. And there's few other sectors where you'll find more of this type of person than in the property game.

agoodpunt

Most experienced LLs 3/4 years ago would have seen this coming even the 4% was under presure. so ended part 4 and increased under the radar with charges for extras that may have been included before, longtermers who benifited from below market while new lets where allowed market divided and incentived new ways to evade especially where controlled rent would effected sale price.

RTB didnt take action unless a previous tenant had the support of the new paying more being reactive than proactive.

Govt will make it more impossible to challenge maybe at the start but they marked IPOA's hint very quickly.

With all the intervention which is pop rents will remain higher some of the drivers been the tax take and higher risk than comparable markets in EU.

Flinty997

https://www.boards.ie/discussion/comment/117691426#Comment_117691426

Kinda scraping the bottom of the barrel of reasons it make any sense for anyone to go down this route though.

The market and rules are skewed to favor "new" large landlords. This is just more of the same.

Have all these changes followed the same path as every other country that tried them before us. Pretty much.

Jmc25

https://www.boards.ie/discussion/comment/117694444#Comment_117694444

Agree with you that the market is being manipulated in such a way that favours large corporate landlords. Think that decision was made some years ago and the government is unlikely to change course.

Comes with pros (on average much more professionally managed tenancy, security of tenure, less "cowboys") and cons ( rent will always be at the higher end of what the market will bear) for renters generally but I can see that from a small landlords point of view the deck is stacked somewhat against them. Difficult for them to get any public sympathy as well when they're all thrown into the same large bucket of "landlords" with much bigger businesses.

Honestly with current property prices I can't see the logic in being a small 1/2 property landlord.

Flinty997

Prices is one part. The rest of it, rules and regulations, is also a factor.