Tenant refusing to pay

Mustardson · 30-04-2020 4:04am #1

Hi,

I am a landlord with a 2-bed apartment in North-West Dublin. I bought the apartment in 2018 (at age 28, with all my savings and a parental loan too!). Late last year I decided to go travelling with my girlfriend and move to Australia for a year or potentially two, and rented out the apartment.

The rent is 1,700 Euro per month. The tenant advised that their work has been stopped temporarily due to Covid-19, and is refusing to pay anything. They say when they get the rent supplement, they will give me that (a maximum of 900 Euro). However, they are refusing to contribute a single cent themselves. I've tried to open negotiations to a fair compromised rate during the pandemic but he refuses.

He only submitted the rent supplement form this week, despite claiming he lost his work 5 weeks ago. I was also conscious of renting for the first time and before signing the agreement had unofficial conversations with them asking about their savings etc., as I didn't want to have to evict a couple with a child. He promised he had savings. I explicitly asked about if he lost his job would he be OK for 3-6 months, and he promised he would be. I appreciate this isn't legally binding but I feel it shows that he is using this situation to take advantage of me.

Does anyone have any advice as to how I should proceed? I feel I've been fair with my assessment, but the next month's rent is due today and he has paid nothing. My parents suggested contacting a solicitor but they said they wouldn't get involved (I assume they don't want their name attached to any potential issues down the line). All the guidance from the government advises that tenants still have to pay their rent but all those messages are just being ignored.

I appreciate that there is little sympathy for landlords. However, I put all my savings into buying this apartment, and don't think I should be treated the same as some person who has 5 properties etc. I'm now working in Australia paying living costs, rent and bills for myself and my girlfriend, who is unable to get a job as over 800,000 Australians have been let go and the working holiday visa is quite restrictive for employers. This is on top of my mortgage/management fees etc. for the apartment at home.

Any advice would be appreciated.

Thank you.

James 007 · 30-04-2020 5:40am

A non paying tenant you could be looking at 18 months to get this one out & this is without getting back a cent. I'm sure he got some form of letter from his work saying he has been temporarily let go, have you requested a copy. Do you even know where he was working. Do you have someone else on the ground that can do the donkey work for you and talk directly to them.

Someone else will answer relating to the rent supplement. And yes he is taking advantage of you it looks like, especially when you are not even in the country. Unfortunately laws are on the tenants side & and the law doesn't take sympathy with any pity stories unfortunately.

overkill602 · 30-04-2020 6:53am

https://onestopshop.rtb.ie/covid-19-emergency-legislation-for-rental-sector/ending-a-tenancy-and-notices-of-termination-during-the-emergency-period/#arrears

it seems your hands are tied for 3 months if they have refused negotiation you need someone to go talk with them but they wont be going anywhere soon

There are weekly payments made to people who lost there job due to covid 19

When renting a place I always make sure they the rent is no more than 1/3 of net income by requesting any documents that can support this.

Ability to pay is a higher risk than before since the new regs came in to only protect tenants

Not all families are higher risk, but when young children involved your social responsibility is expected to be higher

davindub · 30-04-2020 8:18am

I'm sorry for the situation.

The covid payment is only 350 per week so any amount the tenant can pay now will be limited anyway. Maybe they had savings and were wiped out since. You will need to cover the rent for the meanwhile or apply to the bank for a deferral but I'd imagine they are unaware the property is rented.

I would simply explain to the tenant that rent will still be due but simply deferred and ask what arrangements the tenant will make to catch up afterwards? If you can discount once something is paid, that can be used to bargain with the tenant.

When the emergency legislation expires, you can issue an termination letter if the tenant still refuses to pay arrears (there will likely be some further legislation about arrears not being due immediately) but as always you need to be pragmatic, if you play hardball the tenant may not pay, refuse to move etc and then you will need to take a case to the RTB.

handlemaster · 30-04-2020 8:56am

Get a solicitor. No proof they even lost their job here. Be prepared to have to go 1 year with rent. The system is all towards the tenant.

This will not get better. They need to be evicted. Have the letters for over due rent sent etc. Be prepared this tenant will not sign for anything from the post office. . Have the solicitor know this plan accordingly.

Dont mess around.

Fol20 · 30-04-2020 9:07am

Honestly, from the get go, you didn’t play your cards right in assessing your tenant. Never never trust tour tenants and their promises.

How much does he earn - ask for a payslip
How much saving does he have - ask for a bank statement
References - look into how long he has worked for existing company and check them on Facebook and LinkedIn
Ll reference - don’t really amount to much but call them to and try and get his second last ll reference.

Start the termination the moment this covid legislation is over. He is pushing you around right now and the fact he is not willing to pay you anything speaks volumes. Tell him in no uncertain terms you will be starting the eviction process if he doesn’t pay up. It sounds like he is calling the shots here by tell you he will only pay the rent supplement going forward.

You will have a lot of Headaches for the next year but there is absolutely nothing you can do. Stay positive, most tenants are not like this so think about it this way - you will learn a lot from this and hopefully you won’t have another one of these tenants for the next 10-20years if you screen them properly. I would recommend using a solicitor for this as if you get the termination wrong. It will start the entire cycle again.

Lily_Aldrin7 · 30-04-2020 9:13am

I don’t own any property and I obviously don’t know much about the law but from a psychological perspective, if you hire a solicitor and they receive a letter, it might scare them enough to just pay. Or if they are not able to pay, at least to discuss a payment plan that’s fair to you, too.
I would like to just say, my partner and I are both off work- I’m on unpaid maternity leave so I don’t get anything and he gets 350 a week. We have two children but we pay our rent. We’re spending the little savings we have to pay for it and we only buy necessities even when it comes to food.
This is very unfair to you

kevcos · 30-04-2020 9:15am

How is it that tenants can do this with absolute impunity.
The OP's property has been stolen to all intent and proposes.

*I'm not a LL

Pkiernan · 30-04-2020 9:19am

You are a victim of the Covid 19 pandemic, like thousands of other businesses.

However, as landlords are detested in Ireland there is no govt help.

Lose your part time job and you get 350 a week no questions asked.
Lose your rental income and you're on your own.

Theres nothing you can do now except prepare to start the eviction process when the ban on evictions is lifted. No point in engaging a solicitor now.

Valhallapt · 30-04-2020 9:23am

Sympathy with OP, I’m in the same boat, tenant hasn’t paid properly since January. I was loosing patience before Covid issues. They tell me they are out of work but refuse to provide a letter from employer and refuse to apply for rent assistance. I’ve offered the tenant to reduce the payment to whatever they can afford until after Covid and to write off the balance, but now it’s clear they are planning to stay as long as possible without paying anything.

justwhatithink · 30-04-2020 9:33am

Have you contacted your bank to request a payment break? Most banks were offering 3 months from once Covid kicked off, and they are now making plans for extending those payment breaks.While I know this doesn't help the situation of the tenant refusing to pay, it may at least alleviate financial pressure and personal stress.
And I know you still end up being charged interest over the life of the mortgage on the payment break amount, but sometimes needs must...it could be an option to help take some pressure off while you deal with the tenant at least anyway.

TheChizler · 30-04-2020 9:35am

You're kind of limited in your options but as someone suggested I'd be telling them if they make some sort of effort beyond the bare minimum you'd be prepared to go into arrears only, which they can pay off when they can. But if they make zero effort you'll be terminating the tenancy at first opportunity.

I think I'd be offering some sort of discount for the next 2 years (or whatever the review period is) if they play along, I'm guessing market rent and demand will be significantly down for a while so without offering that discount it might make more sense for them to cut their losses, pay nothing, and move somewhere else, leaving you with unpaid arrears and no replacement tenant.

Truthvader · 30-04-2020 9:59am

The reality is that due to various legislative changes over the last 20 years the payment of rent is effectively a voluntary/ honour system. If you have a crooked tenant it will take about 18 months to get them out (that is assuming all your paperwork is 100% - and the PRTB will allow any technical error to spin it out for longer) Indeed the payment of all debts is now voluntary. Money wasted on solicitors will be wasted. That is simply the way things are now.

JimmyVik · 30-04-2020 10:53am

Truthvader wrote: »

The reality is that due to various legislative changes over the last 20 years the payment of rent is effectively a voluntary/ honour system.

I was looking into a property investment a few years ago and that is exactl;y the thinking that I arrived at. So true.
I really dont get people going into residential property investment in Ireland nowadays. Pure madness.

Browney7 · 30-04-2020 11:14am

OP, can you confirm a few facts.

Does his partner work or is it just him? If it had been just his income which has now stopped it's clear there has been a severe drop in their income but not that this "should" be your problem.

As you are in Australia, I assume you are tax resident there - has the tenant been paying you the rent directly or to an agent? There is the possibility that they should be deducting 20% from the rent themselves to pay to revenue. This is the tenants responsibility.

Have you given them a fixed term 1 year lease or is there no fixed term? If no fixed term I would be serving them with a termination once the Pandemic is over but I suspect you have given a one year fixed term? It looks like from your post you entered into the agreement less than 6 months ago.

You need to check the legislation and clarify whether or not you are allowed to serve 14 day notice of arrears during the pandemic. You need to be on the ball on this one.

Are you well up on tenancy law and your rights and obligations - if not, use this time to become familiar with it because you'll need to be.

In the event of an RTB hearing, do you have someone who can attend for you and make your case for you as you're abroad?

Claw Hammer · 30-04-2020 11:21am

Pkiernan wrote: »

Theres nothing you can do now except prepare to start the eviction process when the ban on evictions is lifted. No point in engaging a solicitor now.

This is exactly why the OP should see a solicitor. The OP can issue the 28 day warning letter for rent arrears and stayed in at that but for the emergency legislation the tenancy could be terminated. Even during the emergency, landlords need to keep the paper trail complete so that when the emergency legislation expires there in a position to move immediately. Part of the reason the process takes so long as people realise too late what they should have done.

Claw Hammer · 30-04-2020 11:25am

Mustardson wrote: »

Hi,

I appreciate that there is little sympathy for landlords. However, I put all my savings into buying this apartment, and don't think I should be treated the same as some person who has 5 properties etc.

Thank you.

You saying there should be one law for the rich and another for the poor? That is not the way it works. You will be treated in exactly the same way as any other landlord. You will have to go through the process, issue notices complaint to the Party be about overhauling and get your determination order. That is the same as anybody else in your position. You had better make sure your tenancy is registered with the Party be and that everything is in order to remove your tenant. As far as the Rent Allowance goes, have you an Irish agent who can sign the necessary documents?

Valhallapt · 30-04-2020 1:14pm

OP is travelling for a year or maybe two. Revenue would consider him to be ordinarily resident in Ireland so no need for the 20% withholding tax, only if he stays on a bit longer.

Dav010 · 30-04-2020 1:26pm

We better get used to more threads like this, except for the travelling part. The RTA/RTB is like a golden shield made for times like this. Tenants can effectively ride out the next year rent free without fear of being evicted during it.

It is possible that in these extraordinary times that when the emergency legislation period ends, forced evictions and a penalty fine followed by reletting may be seen as a better financial option than waiting a year for eviction. This is going to be a legal, financial and societal quagmire which is likely to reduce stock even further.

The_Conductor · 30-04-2020 1:46pm

Valhallapt wrote: »

OP is travelling for a year or maybe two. Revenue would consider him to be ordinarily resident in Ireland so no need for the 20% withholding tax, only if he stays on a bit longer.

The rule is once you have been non-resident for >183 in the *previous* tax year, you are not considered to be tax resident in the current tax year. Aka the OP remains tax resident for year one, but if they do not return to Ireland in year 2 and spend at least 183 of year 2 here, they are not considered to be tax resident for year 2, on the basis they exceeded 183 days of non-residence in the previous year......

overkill602 · 30-04-2020 1:49pm

Lots of people are responsible when renting out there.
This is why I and many agencies require prospective tenants bank statements and payslips showing previous history of rent been paid on time as LL refs are not enough.
This type of activity come at a cost for future renters.
If these people have no money they can request help from SS
A database of rent defaulters and early evictions never going to happen, even with no pandemic they could have done the same knowing they can game it for 18 months especially if they take advantage of the LL being out of the country.
Rtb may want to revise the fine for taking the law into owners hands as it would match the expense and loss of rent.

Maitguel · 30-04-2020 1:56pm

If I had a property and my tenant didn’t pay rent and refused to leave I would move into the property too. Just throw an auld mattress on the ground and take what’s in the fridge. I can’t be removed from my own premises so if they want to continue living with me in the property while we sort this out in the TRB that would be fine with me.

Claw Hammer · 30-04-2020 1:58pm

overkill602 wrote: »

Rtb may want to revise the fine for taking the law into owners hands as it would match the expense and loss of rent.

The RTB doesn't decide the upper limit of the fine. The legislature does.

Dav010 · 30-04-2020 2:00pm

Maitguel wrote: »

If I had a property and my tenant didn’t pay rent and refused to leave I would move into the property too. Just throw an auld mattress on the ground and take what’s in the fridge. I can’t be removed from my own premises so if they want to continue living with me in the property while we sort this out in the TRB that would be fine with me.

If only life was that simple. If they lease the whole property, you are disturbing their peaceful enjoyment and breaking the terms of the tenancy. In this case, the tenant is far better protected than you, even if they stop paying rent.

hoodie6029 · 30-04-2020 2:08pm

Fol20 wrote: »

Honestly, from the get go, you didn’t play your cards right in assessing your tenant. Never never trust tour tenants and their promises.

How much does he earn - ask for a payslip
How much saving does he have - ask for a bank statement
References - look into how long he has worked for existing company and check them on Facebook and LinkedIn
Ll reference - don’t really amount to much but call them to and try and get his second last ll reference.

I wouldn't give a bank statement or payslip to a landlord or agent. You'll get a letter from my employer stating I'm in permanent employment, a Landlord reference and that's it.

DesperateDan · 30-04-2020 2:11pm

No one has suggested the thing that always comes up when I see these threads and what I would unfortunately do in the same situation: Offer the tenant 1 - 2 months rent in cash (low ball with €1700 first) in order for them to leave (then make sure they have done so, new locks, security etc).

Will save you a lot of money in the long run, and there seems to be a lot more properties on the market right now so you never know. If tenant has truly lost his job and can't afford anything he would be mad to leave though when he has your lovely apt., so 3 or 4 months worth of cash might be required

Dav010 · 30-04-2020 2:13pm

hoodie6029 wrote: »

I wouldn't give a bank statement or payslip to a landlord or agent. You'll get a letter from my employer stating I'm in permanent employment, a Landlord reference and that's it.

Move aside there, next.

Mezcita · 30-04-2020 2:16pm

DesperateDan wrote: »

No one has suggested the thing that always comes up when I see these threads and what I would unfortunately do in the same situation: Offer the tenant 1 - 2 months rent in cash (low ball with €1700 first) in order for them to leave (then make sure they have done so, new locks, security etc).

Will save you a lot of money in the long run, and there seems to be a lot more properties on the market right now so you never know. If tenant has truly lost his job and can't afford anything he would be mad to leave though when he has your lovely apt., so 3 or 4 months worth of cash might be required

Why would the tenant leave if they are in the frame of mind about staying for free? €3,400 cash versus €20,400 worth of free accommodation.

OP has my sympathies on this.

Graham · 30-04-2020 2:59pm

Maitguel wrote: »

If I had a property and my tenant didn’t pay rent and refused to leave I would move into the property too. Just throw an auld mattress on the ground and take what’s in the fridge. I can’t be removed from my own premises so if they want to continue living with me in the property while we sort this out in the TRB that would be fine with me.

It's probably as well that you don't.

Harassment and if 'successful', illegal eviction all in one. Your hypothetical tenants bank balance would thank you.

Mod Note

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hoodie6029 · 30-04-2020 3:20pm

Dav010 wrote: »

Move aside there, next.

More than happy to.

tvjunki · 30-04-2020 3:30pm

In regards to rental allowance check what is the maximum Rent level is allowed they are allowed. If they are a couple then they may only be allowed 900 or 1000 in total rent for rental allowance. Your rent is above this then the tenants will not get any rental help from the state.

You can have a family member as an agent then the 20% does not have to be held by the tenant. If the tenant does not pass the 20% to revenue but have stopped paying this to you you will still be liable for the 20% and you will have to sue the tenant to get that back.

Tenant refusing to pay

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