Tenant Wants Rent Increased

thomasm

Hi There. We have a rental property which is our old home before we up-sized when the family grew and this is still in negative equity (2005 purchase)

We have great tenants and they are paying well below the market rate as we are in a rent pressure zone. They really look after the house and we have no issues with them and were always happy to accept a lower rent for good tenants. With the recent interest rate increases this has gone from just about covering the mortgage payments to costing us circa €300 per month. I advised the tenant recently that we would be increasing the rent (first time since they moved in 4 years ago) by the amount permitted which was €26 per month with appropriate notice etc.

They then subsequently came back to say the appreciated the fact the rent was so low and were happy to offer to increase of €200 per month as I suspect they may fear that we sell the house rather than keep 'losing' out on it. This was completely unsolicited and we were happy to keep them there as they are good tenants.

My question is can we increase it by this much when we are in a rent pressure zone. Would we need a new lease agreement for example ?

Thanks in advance for any advice. I contacted the RTB and they said they could not offer a view and advised I contact a solicitor.

SharkMX

They can ask for it all back via the RTB at some point in the future and they will get it.

If the property isnt paying you enough under the rules, I would just sell it and be done.

Tombo2001

The absolute numbers you are presenting dont make that much sense without knowing where the property is, what it is, and how much you are charging.

And I'm not asking, just saying.

Do you have any feel for how much below the market rate you are currently charging, i.e. past 12 months?

My suspicion is that you can raise it a lot more than you think within the rules. Inflation in the past 4 years is 20%.

SharkMX

https://www.boards.ie/discussion/comment/121395421#Comment_121395421

When inflation started going up the rules were changed again to limit the raises to 2% (not sure if thats the current max as it keeps changing)

Geuze

Still in negative equity in 2023?

After 18 years of mortgage repayments?

Is that possible?

meijin

https://www.boards.ie/discussion/2058323568/tenant-wants-rent-increased

• as said already, if you increase more than allowed by RPZ, it's not legal, and they can ask for a refund through RTB later
• hopefully, you're deducting the interest paid as an expense?

ballyharpat

you can increase by 2% per year, so, over 4 years, that would be 8%

Buddy Bubs

By negative equity do you mean less than you paid for it or less than the outstanding mortgage? Wouldn't have thought much in the country was in negative equity nowadays, except maybe some high end one off stuff

standardg60

If you're both on good terms just do what I suspect a lot are doing anyway, increase the rent officially by whatever's permitted and do the balance in cash.

tvjunki

Only increase by the amount allowed or they can get it back plus interest when they leave. RTB will be on their side.

dennyk

An increase in excess of the RPZ limit would be illegal whether the tenant agrees to it or not (and for good reason; if your own tenant with whom you presumably have a good relationship is feeling pressured into offering you more rent unprompted, you can just imagine how easy it would be for less decent landlords to coerce their tenants into "agreeing" to higher increases...).

DubCount

We are used to the idea that 2 parties can agree whatever contract they want. This is different. The RPZ legislation over-rides any agreement made. Even if landlord and tenant agree with an increase, the legislation wont allow them to make that agreement legally. Anything agreed in excess of RPZ limits, can be claimed back by the tenant through the RTB, even if they have signed a contract for the higher amount.

tphase

https://www.boards.ie/discussion/comment/121397377#Comment_121397377

presumably that will be compounded so 8.24%

#pedantic

Dav010

I would respect the tenants wishes, it would be rude to deny them the increase they want.

Sunjava

Can't adults just behave like adults...it's a perfectly reasonable proposition, do the right thing in this specific instance. This is a scenario when the 'law' needs to be ignored as the people it is designed to protect are not present in this scenario. Get the arrangement in writing...There is no loser here, however there potentially would be if you were to decide to sell...take the €200

Asdfgh2020

Do you foresee the relationship you have with these tenants deteriorating so bad that they would seek reimbursement via the RTB (which would undoubtedly be a long drawn out process) of what they have freely offered to pay you?

Deub

https://www.boards.ie/discussion/comment/121412321#Comment_121412321

The reality is, there is always a possibility. After all, that’s why divorce exists.

Del2005

https://www.boards.ie/discussion/comment/121412209#Comment_121412209

Or the tenants could be lining the OP up for an illegal rent increase claim with the RTB and a nice pay out on top of the rent returned. Getting it in writing is no good as you can't sign away your rights.

SharkMX

https://www.boards.ie/discussion/comment/121412209#Comment_121412209

What could happen is if the house rented again or is sold by the op and rented again by the new owner and the new tenants ever check the rent with the RTB then the op might be fined and/or required to track down the old tenants and pay the money back.

Unlikely given the RTB couldnt even tie their own shoe laces to be fair.