# Expenses against rental income



## trident (3 Jan 2019)

Hi,
I read in this forum that pre-letting expenses are not claimable against tax.  I just spent several thousand getting an old house up to spec in order to rent it out.  Can I use these expenses against rental income?  Please say yes!


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## NoRegretsCoyote (3 Jan 2019)

Read the Revenue guidance first and then come back with any more questions.


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## trident (3 Jan 2019)

Thanks.  I have read the guidance.  My property complies with the vacancy terms. It says there is a maximum of Euro 5000 that can be offset against rental income.  Would that rental income have to come from a fixed tenancy or could an airbnb stream of income be offset with the expenses?  Thanks in advance for all your help


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## NoRegretsCoyote (4 Jan 2019)

Relevant Revenue guidance as to whether income from short-term lettings is Schedule D Case I or Case IV is here. 

I'm hesitant to give my own interpretation of your own circumstances. But read section 2.1.2.3. and 2.2.2.3.


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## Bronte (4 Jan 2019)

trident said:


> Hi,
> I read in this forum that pre-letting expenses are not claimable against tax.  I just spent several thousand getting an old house up to spec in order to rent it out.  Can I use these expenses against rental income?  Please say yes!



No.

If you sell and make a profit the thousands can be offset against CGT.

Never heard of a 5K rule.

What kind of rental is it?


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## trident (4 Jan 2019)

Thanks for all that feedback NoRegretsCoyote.  Is there a forum anywhere that discusses the rent pressure zones and how these apply to airbnb?  I have to choose between 'normal' renting out of the property and going the airbnb route, and I am in a rent pressure zone.  I was wondering if I apply a certain charge for an airbnb stay, am I then stuck with that charge ?


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## Leo (4 Jan 2019)

trident said:


> Is there a forum anywhere that discusses the rent pressure zones and how these apply to airbnb?



RPZ issues are discussed in this forum, but this legislation does not apply to short term lets.



trident said:


> I have to choose between 'normal' renting out of the property and going the airbnb route, and I am in a rent pressure zone.



Note that change of use of a property fully to short-term lets such as AirBnB is usually prohibited in managed developments and generally requires a change of planning permission.  Further regulation of this sector is also on the way. 



trident said:


> I was wondering if I apply a certain charge for an airbnb stay, am I then stuck with that charge ?



Nope.


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## cremeegg (4 Jan 2019)

The proposals before the cabinet, which it says it intends to make law, would prohibit you doing Airbnb in a property which is not your own home.


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## PaxmanK (5 Jan 2019)

cremeegg said:


> The proposals before the cabinet, which it says it intends to make law, would prohibit you doing Airbnb in a property which is not your own home.



 That one really got me riled up alright.
But having spoken to people who do airbnb on other countries where similar rules were brought in there are quite simple ways around it.

And most of the people already doing airbnb in Ireland who I lnow have said they will just continue doing airbnb or actually use different platforms instead if airbnb to be more accurate.  New rules or not.

So airbnb is probably still an option even after any new legislation.  Right old rip.roaring discussion on the very topic going on on boards.ie that I'm following with interest.


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## Leper (5 Jan 2019)

Reading the Terms and Conditions on the Revenue website is helpful. But, the nuts and bolts of what the OP is asking are as clear as muddy water. What he thinks are his costs and what Revenue thinks his costs are, are rarely the same despite bona fide receipts. Ask any clerical officer in Revenue. Dealing with Revenue and dealing with insurance companies regarding claims are the same; you are covered by everything until you claim. If you think I'm unfair, then ask yourself why it is taking two years to have a tax appeal heard.

You're about to make a few bob in the rental market so employ a good financial advisor you can trust. The advisor should know the tax ropes, should keep you advised regarding profits/losses and tax liability. Otherwise, you're walking a gauntlet that can bite you financially when you least expect.


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## NoRegretsCoyote (6 Jan 2019)

cremeegg said:


> The proposals before the cabinet, which it says it intends to make law, would *prohibit *you doing Airbnb in a property which is not your own home.



Not strictly correct. The reported proposals would oblige you to seek planning permission for short-term lets for more than three months a year.



trident said:


> Thanks for all that feedback NoRegretsCoyote.  Is there a forum anywhere that discusses the rent pressure zones and how these apply to airbnb?  I have to choose between 'normal' renting out of the property and going the airbnb route, and I am in a rent pressure zone.  I was wondering if I apply a certain charge for an airbnb stay, am I then stuck with that charge ?



Short-term lets are completely outside the RPZ framework.

Don't get too stressed about RPZs. Rent controls don't really apply if you are letting the property for the first time, you only have to prove that the rent you are charging is not out of line with advertised properties in the area. Most advertised rents are still - in my experience - for first lets.

Over the long-term I think the RPZ issue may be moot. The big increase in rents took place 2013 to 2018 on the back of a very strong increase in the economy and total lack of supply of new builds. Remember rents had fallen 25% between 2008 and 2011 and represented very good value at that point.

Rents are close to saturation with regard to incomes in big urban areas by now. People will simply go elsewhere or stop moving to Ireland.

So even if you have a rent-controlled property over a few years of 4% increases you will catch up to normal levels. In the long run a normal market shouldn't see increases of below that in any case.


To answer your final question, if you receive planning permission to use it for short-term letting you will still be able to use it as your PPR.


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## PaxmanK (6 Jan 2019)

NoRegretsCoyote said:


> Not strictly correct. The reported proposals would oblige you to seek planning permission for short-term lets for more than three months a year.
> 
> 
> 
> ...




The big difference is in your rights as a landlors. If you do airbnb the property is all yours and you can change your mind and do what you like with it depending what suits you.

If you do regular letting once you hand it over to a tenant you are basically giving it away and have no control. The tenant can stop paying the rent and can tell you to get lost.  You have to jump through hoops that will take you at least a year or more likely two to get your property back.  All this is okd by the government.

Only a nut case would rent out their property in Ireland today.

Stick to short term. At least you are treated like you actually own the property. 

Sure the latest is that you won't even be allowed to ask a tenant to leave even if you are selling the property. Whose going to buy a property with someone in it who won't leave?  Noone.

I'm following a thread on airbnb on boards.ie at the moment that has some great discussion going on in it.


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## NoRegretsCoyote (6 Jan 2019)

PaxmanK said:


> If you do regular letting once you hand it over to a tenant you are basically giving it away and have no control. The tenant can stop paying the rent and can tell you to get lost.  You have to jump through hoops that will take you at least a year or more likely two to get your property back.  All this is okd by the government.



This is a gross exaggeration. Most landlords and tenants have a good relationship. There are over private 200k tenancies in Ireland at any time and only about 1% of them result in an RTB judgement.

There is lots you can do to mitigate the risk of a bad tenant. You can't eliminate it entirely, and if you have a very bad one it takes a long time to get rid of them.

There are also plenty of obvious risk (specifically damage) that can come from short-term lets.


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## PaxmanK (6 Jan 2019)

NoRegretsCoyote said:


> This is a gross exaggeration. Most landlords and tenants have a good relationship. There are over private 200k tenancies in Ireland at any time and only about 1% of them result in an RTB judgement.
> 
> There is lots you can do to mitigate the risk of a bad tenant. You can't eliminate it entirely, and if you have a very bad one it takes a long time to get rid of them.
> 
> There are also plenty of obvious risk (specifically damage) that can come from short-term lets.



Are you a property investor? 
If you aren't, you may know a few.  Speak to them about the way it is now.
Even just read what property investors have to say on ask about money and boards.ie and you will get a feel for the state of play at the moment.

The person whw asked the question will do their own research anyway I assume.  And I know what conclusion they will come to already, but they will do the research so they get an informed opinion.

Couple of good discussions going on here at the moment

boards.ie/thread/2057923097/30

boards.ie/thread/2057942446/1

That's just two.  You'll find lots more. And you'll find lots on askaboutmoney too.


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## Gordon Gekko (6 Jan 2019)

There is far too much scaremongering.

There are some steps to take to mitigate your risk:

- Get three months’ rent as a deposit

- Get proper references and talk to the people

- Be sensible about the profile of the tenant you want (e.g. students or trainee professionals vs a married couple or a retired person)

- Do your own due diligence on the person; Ireland is a village, someone you know will probably know the person or work with them. Use your existing network to find a tenant. Given the rental crisis etc, someone you actually know is probably looking for a place

- Don’t rent out a place that you wouldn’t live in yourself; my sense is that tenants sometimes rationalise bad behaviour on the basis of the way that they perceive themselves being treated

- Don’t accept HAP tenants or people on social welfare; it’s illegal to discriminate so rule them out in other ways


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## JoeRoberts (6 Jan 2019)

I second Gordon's advice and would add to insist on a guarantor to cover up to 2 years rent in a case of overholding. That will weed a lot of potential bad tenants out.


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## Gordon Gekko (7 Jan 2019)

I was watching something yesterday and Direct Line were advertising (in the UK) for landlords’ insurance which covers non-payment of rent for up to 2 years.

Does such a product exist here?


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## Bronte (7 Jan 2019)

JoeRoberts said:


> I second Gordon's advice and would add to insist on a guarantor to cover up to 2 years rent in a case of overholding. That will weed a lot of potential bad tenants out.



How do you do that?


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## Bronte (7 Jan 2019)

Gordon Gekko said:


> - Don’t accept HAP tenants or people on social welfare; it’s illegal to discriminate so rule them out in other ways



Why ever not?  I have had great tenants on social welfare/HAP.  Most tenant's are fine.


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## Leo (7 Jan 2019)

PaxmanK said:


> Are you a property investor?
> If you aren't, you may know a few. Speak to them about the way it is now.



Anecdotal evidence is often wide of the mark. Like any issues. Those who have positive experiences are far less likely to post on internet forums.

If the situation really was that dire you'd have to wonder why none of these landlords are taking cases to the RTB.


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## Bronte (7 Jan 2019)

Leo said:


> Anecdotal evidence is often wide of the mark. Like any issues. Those who have positive experiences are far less likely to post on internet forums.
> 
> If the situation really was that dire you'd have to wonder why none of these landlords are taking cases to the RTB.



I agree that positive experiences don't get posted.

But as regards the RTB, why would a landlord use them?


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## Leo (7 Jan 2019)

Bronte said:


> But as regards the RTB, why would a landlord use them?



If so many tenants weren't paying rent, why wouldn't they as a first step?


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## NoRegretsCoyote (7 Jan 2019)

PaxmanK said:


> Are you a property investor?
> If you aren't, you may know a few.  Speak to them about the way it is now.



I am actually a somewhat accidental landlord at the better end of the market. I do very careful searches on my tenants such as references with callbacks to previous landlords. I also look for employee reference letters and payslips, and check that this tallies with what is on linkedin. I also do facebook searches - you would be suprised at what people leave visible publicly. I do inspections three times a year. I try to respond to their concerns and get things fixed by professionals.

This doesn't eliminate risk but it can mitigate it to a certain extent.


Landlording is of course a risky activity, but that's one of the reasons it has a good return. Gross yields on apartments outside Dublin are approaching double digits - what other asset class would give you that these days?


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## cremeegg (7 Jan 2019)

Gordon Gekko said:


> Use your existing network to find a tenant. Given the rental crisis etc, someone you actually know is probably looking for a place.



While I agree with the rest of Gordons post, I would suggest that any landlord stay far way from anyone you know. Any issue becomes personal grief.


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## PaxmanK (7 Jan 2019)

Leo said:


> Anecdotal evidence is often wide of the mark. Like any issues. Those who have positive experiences are far less likely to post on internet forums.
> 
> If the situation really was that dire you'd have to wonder why none of these landlords are taking cases to the RTB.



They are.  Look it up at the rtb.
And that's just the ones who could be bothered with the rtb.


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## Leo (7 Jan 2019)

PaxmanK said:


> They are.  Look it up at the rtb.
> And that's just the ones who could be bothered with the rtb.



The number of cases is a lot smaller than your dire warnings would suggest to be the case.

A total of 1,674 disputes dealt with last year, less than 40% of those initiated by landlords. There are more than 300k registered tenancies and more than 174k registered landlords. If the situation was as bleak as you describe, surely more than 0.2% of tenancies would be give rise to complaints, or are you suggesting there are thousands of landlords who are failing to collect rent yet couldn't be bothered filling out a simple form?


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## PaxmanK (7 Jan 2019)

Leo said:


> The number of cases is a lot smaller than your dire warnings would suggest to be the case.
> 
> A total of 1,674 disputes dealt with last year, less than 40% of those initiated by landlords. There are more than 300k registered tenancies and more than 174k registered landlords. If the situation was as bleak as you describe, surely more than 0.2% of tenancies would be give rise to complaints, or are you suggesting there are thousands of landlords who are failing to collect rent yet couldn't be bothered filling out a simple form?




You are obviously not aware that most landlords do t actually use the rtb as it is so biased .  You can read about that too all over fora.

Wait until reports about 6 months down the line and you will see the amount of rentals has plummeted.


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## Leo (8 Jan 2019)

PaxmanK said:


> You are obviously not aware that most landlords do t actually use the rtb as it is so biased .



So you believe the vast majority of landlords just sit by while their tenants refuse to pay rent? Any of them that use the RTB for overholding and can manage the basics of issuing a valid termination order seem the get the cases determined in their favour. 



PaxmanK said:


> You can read about that too all over fora.



Again, you seem to be getting caught out by a small number of disgruntled landlords posting on one forum as being an accurate representation of what is happening in the real world. I don't think there's a single forum anywhere on the internet with a balance that reflects the real world. You show me one with a few landlords complaining about their plight and I'll show you another that suggests all landlords are evil and should be among the first put to the sword when the revolution comes. Of course neither extreme comes anywhere close to representing reality.



PaxmanK said:


> Wait until reports about 6 months down the line and you will see the amount of rentals has plummeted.



That's really no surprise with a large shortfall in private housing supply, a rising population, and property values arriving at a point where many reluctant landlords can exit the market. If it really were as bad as you were suggesting, we'd see a drop of multiple times what is happening.


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## Dermot (8 Jan 2019)

Leo said:


> Anecdotal evidence is often wide of the mark. Like any issues. Those who have positive experiences are far less likely to post on internet forums.
> 
> If the situation really was that dire you'd have to wonder why none of these landlords are taking cases to the RTB.



Why in most cases would a landlord take a case of non payment of rent to the RTB when after all the hassle of getting it into the RTB system and winning it the Landlord will very rarely ever get any payment.  I know of quite a number of small landlords who were happy to see the back of tenants like that and getting their property back and hopefully with better tenants.  On the other hand there are a small number of tenants who will see landlords as a good "mark" to see what they can extract out of them.  Rtb has yet to earn the confidence of landlords


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## Gordon Gekko (8 Jan 2019)

I’m ashamed to say that it warms the cockles of my heart when I hear stories of rogue tenants being run out of properties by people who take matters into their own hands.

A personal favourite of mine is a tale of someone who managed to get four tenants fired from their jobs for acting the maggot...magnificent stuff.


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## NoRegretsCoyote (8 Jan 2019)

If you take a rogue tenant to the RTB you are carrying out a public good as judgements are on a publicly searchable database and can be checked by future landlords.


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## JoeRoberts (8 Jan 2019)

Bronte said:


> How do you do that?


Get a solicitor to draw up the document.
Ideally a parent that already owns a property should provide it so that it can be enforced ( even against the estate down the line). Just the concept itself should be enough to keep tenants in line.
Very common in France.


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## NoRegretsCoyote (8 Jan 2019)

JoeRoberts said:


> Get a solicitor to draw up the document.
> Ideally a parent that already owns a property should provide it so that it can be enforced ( even against the estate down the line). Just the concept itself should be enough to keep tenants in line.
> Very common in France.



Are these legally enforceable in Ireland?


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## Leo (9 Jan 2019)

Dermot said:


> Why in most cases would a landlord take a case of non payment of rent to the RTB when after all the hassle of getting it into the RTB system and winning it the Landlord will very rarely ever get any payment. I know of quite a number of small landlords who were happy to see the back of tenants like that and getting their property back and hopefully with better tenants.



I think the question is why wouldn't they as the first step? If a landlord can't be bothered with the hassle of a simple form, they really shouldn't be in the business. So how are they getting their properties back? Are they acting illegally or offering non-paying tenants sums of money to leave?

As NRC says, initiating the case gets the tenants' names published giving other landlords a valuable resource in identifying problem tenants. If every landlord did this and tenants became aware that their actions could see them effectively blacklisted, you might see a behaviour change.


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## Dermot (9 Jan 2019)

Leo said:


> I think the question is why wouldn't they as the first step? If a landlord can't be bothered with the hassle of a simple form, they really shouldn't be in the business. So how are they getting their properties back? Are they acting illegally or offering non-paying tenants sums of money to leave?
> 
> As NRC says, initiating the case gets the tenants' names published giving other landlords a valuable resource in identifying problem tenants. If every landlord did this and tenants became aware that their actions could see them effectively blacklisted, you might see a bahaviour change.



Ive been down the RTB road myself and it is not all that simple as described in your post to get a tenant blacklisted.  Check all the steps that ere available to a bad tenant between appeals and other delaying tactics and with zero financial results.  Despite the inference that I have and others I know have acted illegally or borderline illegally I categorically deny this and resent the implication.  
I have been in the business for over 30 years and I think I am capable of making certain decisions. 
Will soon start my exit from it as it is becoming a nightmare with paperwork and constantly changing regulation


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## Leo (10 Jan 2019)

Dermot said:


> Ive been down the RTB road myself and it is not all that simple as described in your post to get a tenant blacklisted. Check all the steps that ere available to a bad tenant between appeals and other delaying tactics and with zero financial results.



You just need a judgement published. Surely if a tenant is not paying that isn't so difficult, the dispute reports published would suggest these cases don't end go through an unreasonable number of steps. Of course I accept the awards to landlords are in all likelihood rarely enforced, but that's a different matter.



Dermot said:


> Despite the inference that I have and others I know have acted illegally or borderline illegally I categorically deny this and resent the implication.



You're reading an inference that doesn't exist, it's a simple question. If landlords are not going through the RTB process, how are they dealing with tenants who simply don't pay? Another poster is suggesting this issue is rampant, I'm simply questioning that assertion and asking what they are doing instead.


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## NoRegretsCoyote (10 Jan 2019)

It's probably time consuming but it is really, really simple for a landlord to prove non-payment of rent at the RTB. It's not like damage or damp or lack or repair where you could have a 'he said/she said' situation.

I cannot see why a landlord would not pursue this option.


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## Bronte (10 Jan 2019)

Leo said:


> . Of course I accept the awards to landlords are in all likelihood rarely enforced, but that's a different matter.
> 
> .



Which was entirely my point. Waste of time.  And it takes ages. With zero result.


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## Bronte (10 Jan 2019)

NoRegretsCoyote said:


> It's probably time consuming but it is really, really simple for a landlord to prove non-payment of rent at the RTB. It's not like damage or damp or lack or repair where you could have a 'he said/she said' situation.
> 
> I cannot see why a landlord would not pursue this option.



Yep, pretty easy to prove you've not received the rent for months.  And then what?


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## Leo (10 Jan 2019)

Bronte said:


> Which was entirely my point. Waste of time.  And it takes ages. With zero result.



Do you not look up the disputes list as part of your vetting of new tenants? Would you not like if the names of all tenants who stopped paying their rent were published there so that you could avoid them for future lettings?


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## Bronte (10 Jan 2019)

Leo said:


> Do you not look up the disputes list as part of your vetting of new tenants? Would you not like if the names of all tenants who stopped paying their rent were published there so that you could avoid them for future lettings?



How on earth Leo could one hope to do that when you'd have to go into each individual dispute.  In any case most of my tenants are there for years so I've no need.

And yes I'd love such a list.  But I'm sure that would fall foul of Data Protection or something like Human rights.

If the RTB took court cases for landlords I'd support the RTB. Instead I and others fund them for no benefit.  But we all know why the RTB does not take tenants to court.


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## NoRegretsCoyote (10 Jan 2019)

Bronte said:


> Yep, pretty easy to prove you've not received the rent for months.  And then what?


Then you get an RTB judgement. This will increase the probability, though not guarantee, that you will get any money back at all.

There is also the public good aspect, which has been well explained.


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## NoRegretsCoyote (10 Jan 2019)

Bronte said:


> How on earth Leo could one hope to do that when you'd have to go into each individual dispute.  In any case most of my tenants are there for years so I've no need.
> 
> And yes I'd love such a list.  But I'm sure that would fall foul of Data Protection or something like Human rights.



You literally put a potential tenant's name into this database to see if it appears.

In Ireland it is much, much easier to find out if someone has a bad record as a tenant than to discover a criminal record or a poor credit history.


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## cremeegg (10 Jan 2019)

NoRegretsCoyote said:


> You literally put a potential tenant's name into* this *database to see if it appears.
> 
> In Ireland it is much, much easier to find out if someone has a bad record as a tenant than to discover a criminal record or a poor credit history.



Brilliant. I didn't know that could be done. Thank you for the link.


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## Bronte (10 Jan 2019)

NoRegretsCoyote said:


> You literally put a potential tenant's name into this database to see if it appears.
> 
> In Ireland it is much, much easier to find out if someone has a bad record as a tenant than to discover a criminal record or a poor credit history.


Wow, that brill. I hadn't looked on there for years.  They've really improved it.  Very impressed. Thank you very much.  And well done the RTB.


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## Bronte (10 Jan 2019)

cremeegg said:


> Brilliant. I didn't know that could be done. Thank you for the link.



Indeed, my sentiments too.  Two very pleased landlords today. And praising the RTB too !!

Isn't AAM fantastic sometimes.


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## Bronte (10 Jan 2019)

NoRegretsCoyote said:


> Then you get an RTB judgement. This will increase the probability, though not guarantee, that you will get any money back at all.
> 
> There is also the public good aspect, which has been well explained.



Right so, you, eventually, get your RTB decision, you know what happens next don't you?


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## NoRegretsCoyote (10 Jan 2019)

Bronte said:


> Right so, you, eventually, get your RTB decision, you know what happens next don't you?



That's why I couched it in probabilistic terms.

An RTB judgement will *increase* the chances of a landlord getting the unpaid rent, but not *ensure *it.


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