Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Can I hold off rent increases for a few years then catch-up?

Options
  • 23-10-2019 10:20am
    #1
    padjocollins
    Registered Users Posts: 461 ✭✭


    sorry for writing on an old thread but this one seems appropriate.
    I'm renting out a house in cork and don't want to increase the rent for a few years but would like to have the option to increase it to market rates in several years time. What are my rights to do this if I don't increase the rent by 4% every year ? Sherry Fitz is managing it for me. They said they would email me. Just thought I'd ask here. Thanks


Comments

  • Options
    #2
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Mod Note

    Post split from old thread.


  • Options
    #3
    GGTrek
    Registered Users Posts: 834 ✭✭✭GGTrek


    padjocollins wrote: »
    sorry for writing on an old thread but this one seems appropriate.
    I'm renting out a house in cork and don't want to increase the rent for a few years but would like to have the option to increase it to market rates in several years time. What are my rights to do this if I don't increase the rent by 4% every year ? Sherry Fitz is managing it for me. They said they would email me. Just thought I'd ask here. Thanks
    The politicians and NGOs and various leftist organizations are discussing total rent freezes for 5 years (to follow the socialists in Berlin) and life tenancies and you are thinking about not increasing rent?


  • Options
    #4
    padjocollins
    Registered Users Posts: 461 ✭✭padjocollins


    all about stability for me and for my tennants. every 5 years is enough. not a fan of inflation and squeezing every penny. i've very good tennants and want them to stay as long as they want. A market evaluation every 5 years seems fine to me


  • Options
    #5
    Sarn
    Registered Users Posts: 3,062 ✭✭✭Sarn


    According to the calculator you’ll only be able to increase the rent by 10% in five years time if it’s in an RPZ. It’s a silly system that penalises LLs that want to give their tenants a break.

    Edit: I was wrong. I see the 2% issue only relates to older tenancies (say 2016) and the two year rent freeze. When I checked a tenancy beginning in October 2017 it gave a 4% increase per year.


  • Options
    #6
    black forest
    Registered Users Posts: 359 ✭✭black forest


    Can’t help you op as i am living in Germany. Hopefully someone with the wanted knowledge shows up.

    But your idea has been tested here with success. Lots of landlords prefer long renting and reliable renters to short term profits. I am administrating a few houses here but with a little difference.

    Over here it’s absolutely legal to have a progressive rent i.e. every year the rent is going up a beforehand agreed sum. Mostly just a bit above the inflation rate. This can be done for 10 years in a row and ends automatically after the tenth year.

    And now comes the trick. The landlord can stop this rent increase for a few years to reward reliable renters. When it’s necessary for example when the inflation is speeding up he/she can reactivate the progressive rent again. But only from the point the rent was stopped before and not in a wild west style sudden increase.

    This way both parties get what they want.

    Good luck @op. I think your idea is worth to be successful.👍


  • Advertisement
  • Options
    #7
    Salary Negotiator
    Closed Accounts Posts: 1,148 ✭✭✭Salary Negotiator


    Regardless of whether you can now you may not be able to in future so increase it by the max while you can.

    If you’re worried about your tenant maybe pay some fixed price bills internet for example.

    Though I wouldn’t do that.


  • Options
    #8
    padjocollins
    Registered Users Posts: 461 ✭✭padjocollins


    hi and thanks for all the replies.

    So sherry fitz did a lot of legwork for me and got onto the rtb (redidental tenancies board) and chatted with them. I'm sure nobody will be put out if i post the transcript here. the financial details apply to me so it should be fine. Seems like you can freeze for 5 years no prob and then increase it upto the max calculated amount. If the tennants move out in the mean time it might be problematic to jump the rent for the new tennants (workaround is to get the tennants to give you as much notice as possible so you can increase the rent but this is not the best option). anyway here is the transcript

    From: LiveChat <support@livechatinc.com>
    Sent: Wednesday 23 October 2019 11:01
    To: <SNIP>
    Subject: Chat transcript







    Chat transcript


    Name: Sherry Fitz lettings




    Linda
    Wed, 10/23/19 10:44:57 am Europe/Dublin

    Hello. How may I help you?




    Sherry Fitz lettings
    10:45:01 am

    Hiya,

    I want to clarify about RPZ calculations:
    We have a property with rental price of 2700. Tenancy commenced on 12th of October 2018 and the rent was set at this date.
    We calculated the new rent on the rpz calculator on the website and the new rent that will come into effect on the 1st of February 2020 (review issued on the 12th of October 2019 giving tenants more than 90 days notice’)
    Will be 2,835.
    However, the property owner does not want to increase the rent as tenants are good, but he would not like to fall below market level for that property.
    He wants to wait another 5 years before the tenants are subjected to a rent review.
    So, having put all of this information into the calculator, again on the website, the new rent to take into effect 1st of February 2025 the rent will increase to 3375.00 – which is a 19.04% increase?
    As tenants can only be subjected to 4% annually, what way does that calculation work?





    Linda
    10:47:08 am

    Hi There, if you do not review the rent every 12 months in a rent pressure zone, the calculator will give more than the 4% if you wait. The trouble is if the tenant moves out in the meantime, you are stuck at the current rent





    ernesta Sherry Fitz lettings
    10:50:11 am

    perfect, so but if they were to stay there, and a rent review goes out in 1st of February 2020, the tenants can be subject to 19.04% increase?





    Linda
    10:50:34 am

    You will have to use the calculator on the website to see what the increase is





    Sherry Fitz lettings
    10:52:04 am

    as per my initial message, the rent increased from 2700 to 3375, which is 19.04% so I'm just seeking clarification that this can be the case?
    sorry, this was calculated with the calculator on the website





    Linda
    10:55:40 am

    If you used the calculator then it will give you the correct amount depending on the information you input. It will give more than 4% if you wait more than 12 months, so you can print out the calculation and issue this to the tenants to show where the increase of more than 4% came from





    Sherry Fitz lettings
    10:56:49 am

    Okay great thank you! I just wasn't sure where the property owner stood if the tenant was subjected to more than 4%





    Linda
    10:57:04 am

    The increase is valid.





    Linda archived the chat


  • Options
    #9
    s7ryf3925pivug
    Closed Accounts Posts: 4,007 ✭✭✭s7ryf3925pivug


    Crazy. We were renting up until last year. For some of that time we were paying about 60% of the market rate. Then it was increased to about 70%. No way the landlord should have been at risk of penalisation for that. It was increased to about market rate when we left. The rental market is crazy though.


  • Options
    #10
    L1011
    Moderators, Business & Finance Moderators, Motoring & Transport Moderators, Society & Culture Moderators Posts: 68,031 Mod ✭✭✭✭L1011


    Anything you're being told now is under current legislation which is extremely unlikely to be the same in a few years time


  • Options
    #11
    Fian
    Registered Users Posts: 2,188 ✭✭✭Fian


    You can increase by 4% per annum. If you wait 2 years you can increase by 8% after 2 years. Similarly if you wait 3 by 12%.

    However you do not get the compounding effect if you wait. So if you take your base rent of 2700 and increase by 4% each year after 10 years you would have a rent of €3997. If you left it untouched and increased by 40% after 10 years you would end up with €3780.

    This is a slight simplification because I am not bothered to take account of the 90 days notice period which will delay the first increase, with each subsequent increase taking place 1 year thereafter. But that would not have any major impact on the outcome, would reduce the differential very slightly.

    So your cap is lower if you don't increase annually, not to mention the reduced rent in the interim.

    As has been pointed out you also run a greater risk that the rules will change in the interim and you could get stuck with a blanket rent freeze. However it is likely that you would have an opportunity to see such a freeze coming and serve notice of an increase before it came into effect.

    up top you to decide whether the "good" tenants are worth the loss. Also of course you can't increase beyond market rent anyway. And in ten years time who know rents may be lower than they are now.

    finally as it is currently framed teh rent control legislation does not envisage itself subsisting permanently. Personally I can't see it being removed though, the rubicon has been crossed.


  • Advertisement
  • Options
    #12
    antix80
    Registered Users Posts: 2,419 ✭✭✭antix80


    Op, you increase rent when you can. Otherwise you miss out. It's not quite socialism. It's big government making things worse. Just as government departments must spend their budget or not only miss out - but risk getting their budget cut - so too must you increase rent or miss out on rent increases.


Advertisement