# County Council Housing Auth pay RAS landlords in excess of SWA limit (mkt rate -8%)



## Dozo (15 Dec 2013)

Hi,

I have been contact with the department of Environment and with the housing unit of my County to ask them if it was allowed to pay landlords in excess of local SWA rent supplement limits. They confirmed that they are offering market prices minus 8%. 

I know of houses in my area (Kildare) where landlords have been offered €1,100, which is in excess of the local SWA rent supplement limit and as far as I can see also the upper limit of the current market price.

Is this not going against the rule that the upper limit should be the SWA rent supplement for the area?


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## Dermot (15 Dec 2013)

Is there a supply and demand issue in the area. SW rent supplement limits can be a blunt tool and not fit for purpose where there is a shortage of supply


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## Dozo (15 Dec 2013)

That might be the case, it is still against the rule it can't be higher than the SWA rent supplement limits and at the same time it is driving up the rental prices.


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## Dermot (15 Dec 2013)

That is the trouble with rules that are inflexible. If the demand is higher than the supply then you have price increases.  
Do you think that the rules should remain inflexible and leave people without a roof.
If there is suitable accommodation in the area that can be rented at the social welfare rates then you have a point.
There is no gun to anyone's head to pay rent over the going market rate for the area.


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## Dozo (15 Dec 2013)

Well, you are talking about your and mine hard earned tax payers money here.

So the situation is that if you are under 18 months unemployed you have to live in a cheaper dwelling but if you are over 18 months unemployed you can find something nicer (as long as the house under RAS). 

In the free market I do not have a problem with it, but when houses are snapped of the market for RAS than there is a problem.


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## Dermot (15 Dec 2013)

It still comes down to the situation of supply and demand.  Not everyone wants to be a landlord either.  A lot of landlords are currently accidental landlords. A lot of other landlords are in severe financial difficulty.
There are a high percentage of private and sw tenants who are in the good tenant category but there is a small percentage of hardcore tenants who abuse their rights and leave a lot of bills for landlords before they leave.
As a landlord you have a lot of expenses that are not often seen by the tenant.
You have Buy to let Insurance which is dearer than the normal Insurance.
Property Tax which is not allowed as an expense and is taxed as a profit. (crazy)
PRTB registration,
You are only allowed 75% of your interest as an expense. The 25% of the interest that you pay to the bank is deemed to be a profit and taxed (which is crazy)
Prsi
Accountants fees.
Service charges to management co.
Profit if any taxed
Replacing of white goods and furniture.
Repairs
Bank repayments.
Boiler servicing etc
Now the Government have it as a priority to set up another quango to hold deposits.  This will be sport if they are as efficient as the PRTB.  I have always fixed up with Tenants within a few days of leaving with their deposit.  I can see tenants waiting for 3 months for their deposits from a quango in all cases. None of my family want to inherit that part of my life.
Yes there a some bad landlords who disgust me but the only landlords who will suffer are the good ones.  
Legislation rarely sorts out rogues


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## cremeegg (17 Dec 2013)

I really don't get this idea of a quango to hold the deposit.

Even leaving aside the issue of bureaucratic inefficiency.

From my own experience as a landlord in the vast majority of cases, I repay the deposit with no issue. Even if there is some minor issue, like the oven or fridge are dirty, you give back the deposit, it is easier than arguing. If there had been a good landlord tenant relationship for 6 months or perhaps much longer, who wants to end it with an argument.

The tenant often does not pay the last months rent, saying "take it from the deposit". I don't like this but the landlord is totally powerless in this situation, again usually there is no real issue..

Enter the quango. When the lease is up what happens? Will they write to me asking if it is ok to release the deposit. Will I be given time to inspect the premises. I generally give back the deposit when on the day the tenant leaves, this will hardly happen with a quango in place.

As a landlord any premises can be faulted, I have never received a house back that didn't need to be cleaned. Thats €400 straight away.

Dirt that a tenant leaving really does not notice, behind the fridge for example, stands out a mile when a potential new tenant comes to look.

I think it will become routine for deposits to be withheld, for reasons that can easily be explained in correspondence to an anonymous quango, reasons that would never be mentioned face to face between people who have had a satisfactory relationship over months.

Just as a further piece of evidence that this deposit holding Quango will not improve things. A relative of mine rented a property in Belgium. The system there is that an "independent" agency inspects the place when you leave. The agency then prepares a report to say what part or all the deposit should be withheld/repaid.

In this case, the agency suggested that an amount of 110% of the deposit was owing to the land lord for damages. i.e. that my relative should lose the deposit and pay another 10%. Obviously I am biased but I rely do think that any reasonable person would say the the property was handed back in excellent condition.

After enquiring from other people who had rented in Belgium, they were told that this is normal 110% is what they alway say unless there is a real issue when the say more.

And the normal thing to do is dispute the finding and move on. You won't get your deposit back but they won't pursue you for the extra 10%.

I admit that on principle I hate the idea of a government agency interfering in a private contract between landlord and tenant. But in practice, this will be good for landlords, it will be come normal practice to say that the house needs cleaning after the tenancy and that you want to keep the deposit.


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## Dermot (17 Dec 2013)

cremeegg. I agree with you.  As a landlord I get over it that I have to clean the house and dispose of rubbish when a tenant leaves and I am generally happy that there is no major damage done.  
I think I will be taking a tougher line when the "Quango" takes over. 
I think I will have to upgrade the memory cards in the camera and get in the cleaners. The minister will probably prohibit this in the new legislation. 
The peculiar thing about this is that Labour are pushing this with the backing of Threshold who I think have a Labour senator on their board. 
From my own experience when tenants leave me it is about moving to another area and they often need the deposit immediately.
Yes I would love that system in Belgium. 
I cannot see that an independent system would be allowed to operate here. That would be too much to expect in Ireland


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## ajapale (17 Dec 2013)

Dozo,

Am I right when you say you object to the CoCo housing authority paying more than market rate less 8%?

Because this is a waste of taxpayers money and distorts the market for young single people who do not quality for rent allowance. And is not fair on landlords who abide by the rule as it breaches the local scheme rules.



Dozo said:


> Well, you are talking about your and mine hard earned tax payers money here.





Dozo said:


> .... houses are  snapped of the market for RAS than there is a problem.



aj


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## ronaldo (17 Dec 2013)

The limits placed on rents for the purpose of rent allowance are set based on county when it's obvious that the 'market rate' for rent varies wildly within each county.

In the area I live, the limit under which rent payable must fall for a tenant to be in receipt of rent allowance would qualify a person for very little - and, by this, I mean that it's very unusual for a property to come on the market for rent within the limits.

Just 25 miles away, there is another major town where properties are readily available within those limits. Some would advise people to move to these towns but that becomes very difficult, especially where children are involved.

In the town where I live, the majority of tenants are secretly paying additional money on top of the 'allowable rent'. Otherwise, they'd have nowhere to live.

So, in this case, it becomes a question of "should the government pay market rate less 8% under the RAS scheme or should they have a policy where the tenant has to stump up the difference?"

Don't get me wrong, there has been a decrease in rents over the past 7 years in my area. However, when rents dropped from the levels they were at that time to current levels, which are about 25% above the SWA limit, a lot of people I know who aren't in receipt of rent allowance moved out of parents homes and into rented accommodation because it became more cost effective.

There is a level at which dropping SWA rent allowance limits any more will not result in a reduction in market rates and, in my area, it looks like SWA limits have already dropped below that point.


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## Bronte (18 Dec 2013)

ronaldo said:


> In the town where I live, the majority of tenants are secretly paying additional money on top of the 'allowable rent'. Otherwise, they'd have nowhere to live.
> 
> or should they have a policy where the tenant has to stump up the difference?"
> 
> .


 
There are landlords who will take the top ups, but they are probably those who are not declaring any rent whatsoever to revenue.  Even if you are properly declaring it, then you are falsifying a document for social welfare.  

There is a reason why they don't allow the tenant's to stump up the difference, I think it prevents SW tenants from living in mansions, while apparently only having dole as income.  Also I guess it controls rents somewhat.  

As for rules and laws.  Last year or the year before, they reduced all the SW rates and told all their tenants to demand rent reductions off landlords, which tenant's cannot do, but what are us landlords to do, evict tenants.  That's what obviously happened I guess for some people.  And now they've increased the rates again recently.  It's a lot of messing around.


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## Dozo (21 Dec 2013)

The current social housing model is unsustainable.
Not with RAS or HAS or whatever.
It most definitely should not be dependent on private landlords. More in hands of not for profit organisations with professional maintenance teams, administration and fair queuing mechanisms.

it creates a false market . And yes, the money spend on private landlords could better be spend on sustainable social housing.
Private landlords an fight for the rest of the market then or actually just give it up if it is too expensive to keep up a house anyway.


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## Dermot (21 Dec 2013)

Very few people advocating social housing take into account the capital cost for the state of providing social houses and this capital cost has to be borrowed and interest paid on it. There is also ongoing costs of repairs and a bureaucracy of administration in managing them and collecting rent. There is also insurance costs. I wonder what the real costs of a social house taking the capital and running costs into consideration
Local authority tenants end up doing repairs themselves and most local authorities do not replace a lot of white goods etc and have it as a condition of the tenancy that this is the case. I have no doubt that there is a very high percentage of local authority tenants that a very unhappy with their houses/areas.
I just have one tenant who is dependant on social welfare and they are excellent tenants but I give them a very special deal as it makes me feel good to help them.  There is room for both sides in the market (private and local authority) but you cannot have a situation where you have PRTB, Threshold etc on the backs of landlords and taking forever to deal with situations and on the other hand social welfare telling tenants to effectively tear up contracts and walk away.  That is the sort of B......t that Joan Burton was advocating not too long ago.  
A contract is a contract whether you are the state or a landlord or a tenant and until this is recognised by all sides in the spirit that it was originally entered into there will not be much trust. If there is no trust you have nothing.


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## Bronte (3 Jan 2014)

cremeegg said:


> I admit that on principle I hate the idea of a government agency interfering in a private contract between landlord and tenant. But in practice, this will be good for landlords, it will be come normal practice to say that the house needs cleaning after the tenancy and that you want to keep the deposit.


 
While I agree with most of your post, there is a problem.  You can be sure that the tenant will still not pay the last months rent.  So while in other European countries, the deposit could be used in lieu of damage, and I agree with you that there is no property that doesn't require some work when a tenant's leave, it will not happen.  

If the deposits were held by a quango, in all likelyhood the tenant would never get it back.  Most landlords I know, including me, just give back the deposit, and get on with the cleaning, repairing and repainting.


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