To sell or to rent

iniscealtra

We have a house in a village that we are ready to move out of fully by next summer. It is in a good location, walkable to schools, pub, shop etc. However it is built on a family estate. OH parents had a one acre site with their house and three siblings have built houses on it as well as the parents house. There is a shared septic tank with the house and a shared driveway.

Property is quite sought after in the area. How would this affect the possibility of sale?

Renting it out is the other option. It would be easy to rent but maintenance would be involved.

The money would be great from a sale but it might be better to wait several years and get the money for works to connect to the new sewerage system for the village so that house is not sharing the septic tank.

What advice would you have about the shared driveway? Currently it’s just casual maintenance between siblings. Sure we’ll put down some gravel. No legal agreement for maintenance. No tarmac.

Is it better to sort out this issues over the next few years before attempting to sell.

We are renovated an old house for ourselves, so we do not have the cash at present for those jobs now but could after a few years renting out the house.

Thoughts?

Peregrinus

Talk to a local estate agent, but I think the house would be difficult to sell advantageously unless clear, viable, documented and legally solid arrangements are put in place regarding rights to use, and obligations to maintain, the shared driveway and the shared sewage system.

You also need to consider the position of your in-laws who occupy the other three dwellings on the site. Getting proper arrangements in place is as much in their interests as it is in yours. Even if you can sell the house without putting these arrangements in place, maybe you shouldn't; you wouldn't be doing your in-laws any favours.

There'll be a cost to putting the arrangements in place, and you'll need to instruct a solicitor. Your in-laws might agree to share this as it affects them as much as you. On the other hand, they might not.

pat_sconce

And remember, it's not just the buyer you have that legal agreements are for - it for every subsequent buyer.

So cast iron legal agreements signed and agreed by all parties and encumbered on their properties in case they sell too

iniscealtra

I agree regarding getting agreements even if the house is never sold.

Rights of use and access are sorted legally.

Maintenance is not.

OH only mentioned selling recently. It hasn’t been mentioned as an option before. The family know that we are going to rent.

db

Does the house have planning permission? It would be unusual to get planning for multiple houses in one septic tank.

iniscealtra

Yes it has planning permission.

iniscealtra

@db It is a treatment plant apologies not a septic tank.

Peregrinus

https://www.boards.ie/discussion/comment/120840052#Comment_120840052

You renting doesn't present the same issues for the rest of the family, since they still deal with you in relation to sewage and access issues.

If you are going to sell, we have already identified the need for proper sewage/access arrangements to be put in place. This can only be done with the agreement of all the other family members on the site, and it may take some time for them (a) to accept that they need to deal with this ("We've all got on fine up to now. Why the need to change what works?") and (b) to reach a common position on what the arrangements should be (some may be primarily concerned to ensure that they don't become legally obliged to pay any more than they pay at present; others may be primarily concerned to ensure that the sewage system and driveway are properly maintained and that everyone is obliged to pay their share of whatever that costs). And, of course, sewage and access issues aside, the prospect of breaking up ownership of the family compound may be confronting for some of them.

In short, this could take a while to sort, and could involve some sensitive conversations. You know the family dynamics better than we do, obviously, but these issues might affect your preference for renting or selling at the moment.

iniscealtra

https://www.boards.ie/discussion/comment/120840434#Comment_120840434

Agree with pretty much everything you’ve said there.

herbalplants

Shared driveway a total nightmare in my opinion with the initial owners of the land, nobody will buy this house. Sewerage also.

I seen couple of houses in great location that are not touched mainly on the driveway issue. Who wants to spend hard money on a house then deal with access. Plus in most cases if the original owners are still living next door they feel entitled so no one will be bothered with that.

iniscealtra

I don’t understand what you mean by feeling entitled. Can you explain that please?

iniscealtra

Sewerage can be sorted as we can connect to village system once that is up and running. Sometime this summer they said.

iniscealtra

@herbalplants In your opinion renting would be the best option?

herbalplants

https://www.boards.ie/discussion/comment/120841098#Comment_120841098

Renting it out would be best.

kippy

https://www.boards.ie/discussion/comment/120841039#Comment_120841039

Entitlement to primary access to the site because they used to/own the land and were there first.

If the sewerage gets sorted it's one less thing to worry about. Access, right of way and legal title/folios are another thing needed to get cleared up.

As mentioned above some conversations around your intentions and potential issues are needed with your siblings. It is in everyone's interest however that these things are straightened out now, while ye are all alive still get on with each other.

Shoog

If you rent it out then you quickly hit capitol gains tax issues and when you eventually sell the government will take a 21% cut of any profits on the sale. Only in a consistently rising market is it worth renting as a private landlord - it will be constant hassle and obligations with the chance of the property been trashed.

iniscealtra

Access is sorted as is title, rights of way etc. Maintenance of the road in is not.

iniscealtra

Entitlement is not an issue as every house on site has legal access, right of way, clear title etc. Everyone is entitled to access their property by said driveway. @kippy That is all sorted.

The issue in my opinion is maintenance of the road.

kippy

https://www.boards.ie/discussion/comment/120844547#Comment_120844547

Ok,

So who owns the road if legal access and right of way is established? (You will have to forgive me here - without a map showing the layout it is difficult to determine a few things)

iniscealtra

@Shoog If we rent first and sell later we will be paying capital gains tax. Thanks for that.

If you rent you have an extra income which will be taxed as part of total income. It could be looked at as a long term income but maintenance/ vetting tenants involved.

If you sell and don’t rent it out we will be exempt from capital gains tax as it was our primary residence.

Cons to sale: shared driveway & same family in other houses

Maybe too much hassle to sell, just work on the rental income and keep the property?

iniscealtra

@kippy

The driveway is by the boundary walk to the neighbours property. The five properties are to the right hand side of the driveway. Each house owns a section of the driveway bordering their property and each house has a right of way as far as their own property.

Each property owns a section of the driveway with a right of way as far as that section from the council road, Is that clearer?

Peregrinus

On the CGT point — if the house is you principal private residence, and then you move out and let it, and then you sell it, the capital gain is not fully taxable - it's apportioned between the period when the house was your PPR and the period when it wasn't. So if you use it as your PPR for 18 years and then let it out for 2 years, and then sell it, one-tenth of the gain accruing on sale is chargeable to CGT and the remaining nine-tenths is exempt.

(The gain accruing on sale is apportioned over time on a straight-line basis — you can't argue that the gain all occurred while you were living there and the property didn't change in value at all during the last two years when you weren't. But equally the Revenue can't make the opposite argument.)

Note that, even if you decide now to rent out the house indefinitely, at some point it is going to be disposed of and CGT will arise. So you can defer any CGT liability, but the only way to avoid it altogether is to dispose of it when it ceases to be your PPR.

kippy

https://www.boards.ie/discussion/comment/120844721#Comment_120844721

The fact that each property owner "owns" a portion of the driveway (is it on their folio?) is the complication then - I would think. It is their obligation to look after their own portion of the drive way.

Were the drive way a public right of way it is possible, as has been the case in the past (not sure about now) that the LA or council would be responsible for it's maintenance.

The other thing that may be an issue here is access for other services. Water, The new Sewer, Broadband. - Do these cross property belonging to the other landowners/on the side of the road - what happens if the road needs to be dug up?

Apologies now, I could be incorrect on assumptions on all of the above - but these would all be things I would need a very solid answer on, were I to look at purchasing something like this so you'd need to have all the answers well lined up (as you are trying to do)

iniscealtra

@kippy Yes it is on the folio. The services are at the side of the driveway.

Furze99

What strikes me OP, is that from what I read - you have 3 dwellings on an 1 acre plot plus parents house adjacent. That seems pretty tight, must be cheek by jowl a bit? For a semi rural area? Outskirts of village?

kippy

https://www.boards.ie/discussion/comment/120845002#Comment_120845002

So the services run through privately three/four folios of privately owned land? Who is responsible for fixing a leak (I don't know the answer to this, however I know it depends on where the leak is - but it is a question any buyer would need answered), approving further services (such as a connection to the sewer?

The shared septic tank, as mentioned above is a major issue - so a connection to the sewer is required.

Outside of that you do need to speak with your wifes siblings and parents to see what they think of the idea of selling in any instance. It is likely it could be met with a straight no (as unrealistic as this sounds) and without their support you will not be able to get your ducks in a row to tidy up all the access/legals prior to putting on the market.

kippy

https://www.boards.ie/discussion/comment/120845009#Comment_120845009

This does seem rather tight alright!

iniscealtra

@Furze99 It is within the village boundary which is urban I would say. Footpaths and streetlights. A couple minutes walk on the footpath, Estate across the road. Also add one more house to that. There are four houses plus the original.

iniscealtra

@kippy Maintenance is an issue I’m insure of how to solve to be honest.

Renting is not a problem.

I think you might have better luck renting it out.

A renter can always terminate a lease and leave.

But if I was a buyer there is no way on earth I'd buy a house in that close proximity and sharing a driveway with 4 other houses that were all family members.

Any problems arise with the neighbours and it will always be 4 against one.

herbalplants

https://www.boards.ie/discussion/comment/120847667#Comment_120847667

Spot on, I agree. No way, anyone would spend money to share a driveway with houses owned by the same family. This is what I meant by entitled... Most cases the original owner of the land would act entitled because they were first. So even after selling the house, they would feel they set the rules there.

I watch this house, great location but it is the old house of the vendor, who built another house in the back garden and is selling the original old house. Similar story, they didn't bother to build the boundary wall of the driveway but they state the driveway is theirs. House price dropped couple of times and even now, nobody is queuing to buy it despite being in great demand area.