# Can you or can you not rent out an affordable house?



## Andy_and_lou

Does anybody know?  I've tried ringing the council today and can't get onto anybody (nothing new) I've ask my Solicitor who said he really doesn't know the answer and will have to look into it.  Why is it such a grey area?  Nobody seems to know the answer....I've tried look up the internet etc. but can't find anything.

Can anybody shed any light on the situation?


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## shanegl

You can rent rooms, but the property must remain your PPR.


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## Andy_and_lou

But where exactly does it say that, it doesn't actually say anywhere you can't rent them out (not that I've seen) so can you just say that's you ppr and live somewhere else?


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## polo9n

whats ur reason for renting the AFFORADABLE HOUSE out?


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## jrewing

Surely, if you qualify for such a house, you would not have the means to have a second residence, where you can live while you rent out the affordable house ? Or am I missing something ?


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## Vanilla

In the affordable housing schemes that I have been involved there is both a clause in the transfer order and in the mortgage that the properties cannot be leased or alienated in any way without the prior written consent of the Council and must remain the 'ppr' of the transferee or their successor in title. The wording of the clauses would not seem to preclude renting out a room in the house as long as it remains your main residence.


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## Andy_and_lou

I got the house when I was single, now I'm married, have a baby on the way, the house too small, I'm trying to sell it and finding it difficult due to the fact it is an affordable house and there are mix of social and affordable houses in the same estate.  It's in a good convenient location but I'm running into trouble because of the social and affordable aspect.  I don't think I would have any trouble renting it out, I actually know of people who would rent it from me but I don't want to break the law either.  Really don't know what to do....


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## Vanilla

Contact the council, explain the circumstances and obtain their consent to renting it out. Your local councillor should be able to help.


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## ci1

I'm approved with Fingal.
When I went for my interview I was told that if I got a house that I could rent out a room once I was living in the house.
They said this does not apply to apartments.

I think the whole point of Aff housing is that they help you out at a reduced price for you to have a home.  Not for you to get the affordable house,  then move out and rent it out for probably a higher rate than what your mortgage is and then make money out of it.

Thats my understanding of it anyway.  But from what I've heard from people of this site, they could have told someone else something different.

C.


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## shanegl

Andy_and_lou said:


> But where exactly does it say that, it doesn't actually say anywhere you can't rent them out (not that I've seen) so can you just say that's you ppr and live somewhere else?


 
No, you can't. In such a case I believe you would have to pay the clawback figure to the council. You would have to register with the PTRB if you were renting it out.



I would be interested to know, however, if this would apply to people leaving the country for lets say a year, for work.


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## bradfield

I too own an affordable house and my understanding of this particular issue is that on the whole renting out the house is not allowed under the terms of the scheme. This is also detailed in my legal contract. However, it states that this is not allowed unless you first consult the council and from what I hear they are not unreasonable when it comes to giving such permission. It sounds to me like you have a good case to put to the council and that most likely they would look favourably on it. Each Council has its own approach so you will not know for certain until you speak to the Council. (My house is in the Fingal area).

D


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## Andy_and_lou

Thanks for the Info.

Bradfield I might just have to do that ie ring the council (if they ever answer the phone)and ask for there permission, hopefully they'll give it.


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## Lobby

By all means ring the council, but make sure you get it in writing from them.


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## jrewing

Are there not lists of people waiting for affordable housing ? You say that you're having trouble to sell it. Surely, if you work with the council you can pass it onto the next person on the affordable housing list, for the same/similar price to what you paid for it. You're not supposed to make money on this type of house anyway, as far as I know. These houses exist for a social reason, not to provide people with a second/rental property. 

Surely, if you received a house under this scheme, the right thing to do is to sell it on to another person under the scheme?


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## Andy_and_lou

I actually agree with you jrewing, but that's not how it works, I don't know why.  The council initially were interested in buying it back but then they backed down, not sure why.


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## snickers

I don't think it's fair for you to rent out your home as there are already 1,000s on lists for affordable housing and the whole point is that you live in it.  As far as i know that is in the contract you signed when you bought it.   you will either have to sell it and pay your clawback or else stay put but you can't rent out the whole house as you're just acting like all the other property speculators who are driving the prices up for the rest of us.


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## Dreamerb

snickers said:


> I don't think it's fair for you to rent out your home as there are already 1,000s on lists for affordable housing and the whole point is that you live in it. As far as i know that is in the contract you signed when you bought it. you will either have to sell it and pay your clawback or else stay put but you can't rent out the whole house as you're just acting like all the other property speculators who are driving the prices up for the rest of us.


Arguing with or condemning the OP, who has - in response to rather personal questions - set out the reasons for wanting to rent the house out, having been *unable *to sell it, is not helpful. The OP has also been quite clear that they want to do everything in an above-board fashion. 

Andy_and_Lou, while much of the advice on setting out the precise situation to your local authority and seeking their express written permission to rent out seems sound, I think you might have difficulty from the mortgage perspective as well, so do check that out with your lender. You'll also need to check not just Revenue's, but the Council's position on clawback on any ultimate sale.


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## DirtyH2O

Andy_and_lou said:


> I actually agree with you jrewing, but that's not how it works, I don't know why. The council initially were interested in buying it back but then they backed down, not sure why.


 
That seems to be a complete contradiction to the government's recent announcement to put billions into providing social and affordable housing in the next development plan. Your local politician(s) might be of assistance to you.

They should provide a facility to buy back property that the original purchaser has outgrown as in your situation where a one bed apartment is unsuitable for a family. This will be a very common problem in five years I'd guess.


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## snickers

personal circumstances aside, it is not right that an affordable housing purchaser can rent out their house and move on to a new place having used the discount from the local authority to move up the property ladder!


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## Dreamerb

snickers said:


> personal circumstances aside, it is not right that an affordable housing purchaser can rent out their house and move on to a new place having used the discount from the local authority to move up the property ladder!


I do have sympathy with your point, but target your ire at the Government and local authorities, not at the hapless OP who's trying to do everything honestly and above-board [unlike, generalised venom here , so much of the property industry].


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## JohnJay

jrewing said:


> Are there not lists of people waiting for affordable housing ? You say that you're having trouble to sell it. Surely, if you work with the council you can pass it onto the next person on the affordable housing list, for the same/similar price to what you paid for it. You're not supposed to make money on this type of house anyway, as far as I know. These houses exist for a social reason, not to provide people with a second/rental property.
> 
> Surely, if you received a house under this scheme, the right thing to do is to sell it on to another person under the scheme?


 
Only* new* properties are available under the affordable housing schemes.


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## Andy_and_lou

Exactly Johnjay, that's what I was trying to say when I said 'that's not the way it works'

I can totally understand where people are coming from, there is no sense or meaning to the system in place.  I too was one of the people on the list for an affordable house, for 4 years.  I got a house and I was delighted to get it but to give a person a house they will more than likely outgrow just doesn't make sense either.  Most of people living in the 2 bed houses where I am are older single people.  I'm young and have a child already, I didn't foresee that I would end up getting married and having another child when I accepted the house, unfortunately I can't see into the future.  But the likelyhood of me meeting someone and having more kids is alot higher than some who is in there 40s/50s.  I'm not trying to rip off the system, as I said if the house was bigger I would stay no prob, location is great etc and we are actually moving a good bit out to buy a bigger home.  I just wanted to know if there was another option if I couldn't sell the house, I mean who wants to be stuck paying 2 mortgages.


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## Howitzer

Andy_and_lou said:


> Exactly Johnjay, that's what I was trying to say when I said 'that's not the way it works'
> 
> I can totally understand where people are coming from, there is no sense or meaning to the system in place. I too was one of the people on the list for an affordable house, for 4 years. I got a house and I was delighted to get it but to give a person a house they will more than likely outgrow just doesn't make sense either. Most of people living in the 2 bed houses where I am are older single people. I'm young and have a child already, I didn't foresee that I would end up getting married and having another child when I accepted the house, unfortunately I can't see into the future. But the likelyhood of me meeting someone and having more kids is alot higher than some who is in there 40s/50s. I'm not trying to rip off the system, as I said if the house was bigger I would stay no prob, location is great etc and we are actually moving a good bit out to buy a bigger home. I just wanted to know if there was another option if I couldn't sell the house, I mean who wants to be stuck paying 2 mortgages.


 
Err, why don't you just sell the thing? 

I know there's a clawback but you knew that when you bought it. There's nothing wrong with the system. The state gave you a step up onto the housing ladder. You now want to move to a bigger place, so move! Do you NEED to rent the place and become a landlord? Your desire to become a property investor has nothing to do with your need for a bigger place for you and your family. Sell it and move on and be gratefull that the state gave you the helping hand when you needed it. 

People move up the "property ladder" by selling their existing property and buying somewhere else. People become property investors by buying properties and renting them out. Which do you want to be? Do you want the state to give you a helping hand in becoming a property investor as well as a property owner? It's an Affordable Housing scheme, not an Affordable Investment scheme.


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## Card

Andy and Lou
have you had any offers at all on the property?


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## Andy_and_lou

You obviously haven't read the thread, I am trying to sell the house.


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## Andy_and_lou

Card, yes I have which I accepted twice but they've fallen through because of whole social and affordable thing.:-(


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## Card

am interested in this whole area as am thinking of applying for such a home
can you explain why the sales are falling through because of the social and affordable aspect?
thanks


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## Andy_and_lou

There is no real explanation, it's just society, alot of people don't want to live in a 'Council Estate' and unfortunately that's just the way it is.  As I said I don't have a problem I would still live there if the house was big enough.  To me the estate is fine, I've never had any trouble, a few cheeky kids but I suppose that's in every new estate.


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## Card

so what's happening is that people are seeing the house and liking it and putting in offers but once they realise that its an affordable home they are not interested in purchasing it? I though most people would be familar with estates in an area and would  know beforehand which estates they would like in live and which they would not. I'm guessing situation would be different then if it was an affordable house in a regular estate in which 20% or whatever the proportion is were set aside for affordable housing. Perhaps something to keep in mind?


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## Andy_and_lou

Sorry pinkybear and to everyone else, I wasn't aware of the caps thing.  I was just trying to make it clear that I am trying to sell the house.  

I am just looking for answers to my original post not a moral lecture from anyone.


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## pinkyBear

> There is no real explanation, it's just society, alot of people don't want to live in a 'Council Estate' and unfortunately that's just the way it is.


 
I lived in one myself, you are experiencing the current down turn in property values, and yes given a good location people will still look at council houses are a step on the ladder. 

In what condition is the house in, does it need to be reapinted, have you alot of clutter in the house when viewings are happeing? If so you need to address this.

The good thing about council houses is they are very close to city centres, however you are cometing with new build.


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## Howitzer

Andy_and_lou said:


> You obviously haven't read the thread, I AM TRYING TO SELL THE HOUSE.


 
Fair enough, I missed that point, the gist of the thread suggested otherwise. But houses don't fail to sell because of the area, they fail to sell because they're asking too much for the area.


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## Andy_and_lou

Card, it was the engineer who put off one purchaser, I'm not sure if the purchaser knew what kind of estate it was initially, I have an estate agent dealing with the sale, so I have no direct contact with people, the other person was interested initially but then backed off for the same reasons.  TBH I don't know if alot of people realise there are social and affordable houses in that estate, I don't know for sure.  This estate has all social and affordable houses, there is no privately owned houses there. HTH


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## Andy_and_lou

Pinkybear, house is in great condition, very well presented, modern etc.  It's in a great location too.  That's why I can't understand why it hasn't sold, it's the perfect house for someone starting off or an investor.  Maybe I'm jumping the gun but when 2 people pulled out it got me a bit worried and I wondered if I couldn't sell would I have options.  There are more people looking at it today so please keep your fingers crossed!


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## Vanilla

Also of course investors can't buy these houses ( at least not in the first such sale from the original owner) because of clauses preventing this in the title so that's a whole market closed off too.


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## pinkyBear

Hi there,


> It's in a great location too.


 That will stand to you, give it time, I have a friend who has just sold her place in a social and affordable area. YOu must realise there is a down turn and all areas are affected.


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## Andy_and_lou

Vanilla said:


> Also of course investors can't buy these houses ( at least not in the first such sale from the original owner) because of clauses preventing this in the title so that's a whole market closed off too.


 
I would say that only applies to me, not to someone who's buying the property for the market value.  It isn't an affordable house then, it's a privately owned property and doesn't have anything to do with the council anymore....


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## Vanilla

Don't think so. The norm is that on selling both the purchaser and the seller have to obtain council consent- the seller covenanting not to be a burden on the council for housing in the future and the purchaser covenanting that they are in need of housing, don't own another home, are going to use this as their ppr etc. This new purchaser can then usually sell on without consent of the council though.


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## annR

snickers said:


> personal circumstances aside, it is not right that an affordable housing purchaser can rent out their house and move on to a new place having used the discount from the local authority to move up the property ladder!


 
The discount provided is used to get on the property ladder in the first place!  If you sell it ( as the OP is trying to do) there is a clawback to cover the original discount.  So there is no way to use the actual original discount to trade up to somewhere else.

There seems to be a lot of ignorance around about affordable housing like people complaining that it brings down the price of their own houses etc.  Total snobbery.


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## annR

I'm in the same situation as the OP.  I bought my affordable apartment before I even met my fiance but am now getting married this year.   Trying to sell it with no luck but I don't think it's anything to do with it being affordable as the development is a mix.   I also had two offers which I accepted but went nowhere!   Lots of people are having difficulty selling places.


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## Andy_and_lou

Well good news is, I just got another offer which I've accepted but I'm very sceptical as you probably imagine.  AnnR, at which point did these puchasers pull out from buying your property?  Do you know the reason?


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## pinkyBear

> I just got another offer which I've accepted but I'm very sceptical as you probably imagine


 
Hi there, Many congrats, most of the panic is over.
Some advice, until things are signed sealed and delivered - only then you can relax....


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## ally34

Didn't relaise you could rent out ROOM only can you please give me more information on this


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## ally34

Can anyone advise me on rent out a ROOM only in an affordable house... as I did not realise this was acceptable


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## Dreamerb

ally34 said:


> Can anyone advise me on rent out a ROOM only in an affordable house... as I did not realise this was acceptable


I believe it is; what is not allowable, I think, is to rely on the rental income in calculating the maximum mortgage amount.


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## JohnJay

Vanilla said:


> Don't think so. The norm is that on selling both the purchaser and the seller have to obtain council consent- the seller covenanting not to be a burden on the council for housing in the future and the purchaser covenanting that they are in need of housing, don't own another home, are going to use this as their ppr etc. This new purchaser can then usually sell on without consent of the council though.


 

This only applies to Social Housing, not affordable. (in other words, to council houses where you pay a small amount of rent and eventually buy it out from the council)


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## Andy_and_lou

Thanks for clearing that up Johnjay, thought it was strange as the purchaser will be paying the full market value and therefore the property will have nothing to do with the council anymore once they are paid what they are owed from me.


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## Vanilla

Actually, _as I said before_, there is a covenant in the title to the affordable houses I have dealt with that the property cannot be alienated ( inter alia sold) without the consent of the local authority for a period of 20 years from the date of vesting of the house. So the local authority can seek whatever evidence it likes in relation to the new purchaser before giving consent.

I don't find this strange. This is a house made available to you as an affordable house. Presumably the idea was that if not for this scheme you could not have bought a similar house. Therefore you bought it with those conditions attached- which should have been explained to you fully at the time.

Perhaps to save time you should contact the housing department of the local council and ask them just what they require before giving consent to the sale, since the sale will be conditional on their consent being given. Then presumably if they do require certain qualifications in a purchaser you will be in a position to find out whether your purchaser qualifies without wasting too much time and legal costs in issuing contracts to someone who cannot qualify. Also you can send in your own undertakings to the council not to be a burden for rehousing in the future so that the consent can issue without delay and therefore not hold up your sale.


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## Sammie

Andy_and_lou said:


> Does anybody know? I've tried ringing the council today and can't get onto anybody (nothing new) I've ask my Solicitor who said he really doesn't know the answer and will have to look into it. Why is it such a grey area? Nobody seems to know the answer....I've tried look up the internet etc. but can't find anything.
> 
> Can anybody shed any light on the situation?


 
I know that on the list of dwellings on offer, from the council in May, there were a number of units in certain areas that HAVE to be owner occupied and if not then the owner must sell it. So does that mean that the other dwellings can be rented out further down the line if there is a change in situation? What if someone wants to go off travelling for a year or so? does this mean that they have to sell their dwelling because of this? I doubt it! You will have to pay tax on the rental income that you receive for renting out your house like any other landlord/lady. The clawback only comes into it when you are selling the property.


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## Vanilla

Sammie- why don't you re-read this thread again. You are wrong.


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## Andy_and_lou

My Solicitor told me I didn't need consent from the council to sell.  He has the contracts/Title Deeds etc, he is very thorough and never mentioned anything to me about the purchaser having to be a first-time buyer or owner occupier, which I would think to be vital information if it was an issue.  Also I don't think anyone would be willing to buy a property at the full market value if there was a condition like that on it, it doesn't make sense.  It does make sense however for the condition to be there for me, the person who bought the house at a discounted price under the affordable housing scheme but not for the person I'll be selling too.  Saying that I'm going to double check with my Solicitor.


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## Vanilla

As I said before, once a new purchaser buys it, that condition will no longer apply.

Just ring the housing department.


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## Andy_and_lou

Another update, rang my solicitor and he told me that the above does not apply (thank god) he said it may apply to other schemes the council have but not to this one, as long as the clawback is paid back in full, the council have no further involvement in the property.


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## Mel

Vanilla said:


> Don't think so. The norm is that on selling *both the purchaser and the seller have to obtain council consent*- the seller covenanting not to be a burden on the council for housing in the future and the *purchaser covenanting that they are in need of housing, don't own another home, are going to use this as their ppr* etc. This new purchaser can then usually sell on without consent of the council though.


 
Please tell me that this isn't true... why does the purchaser need consent? 
I am purchasing an ex-council house - have my details been supplied to the County Council? Why did my solcitor not tell me this?


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## Vanilla

I know that in the affordable housing schemes that I have dealt with for clients that these clauses are in the transfer deed and in the mortgage deed. Perhaps different councils have different covenants. Find it very strange though that the consent to sale is not applicable.

Mel- if your purchase is the second purchase, then it no longer applies- in other words the consent procedure is only applicable to the first purchase from the first tenant, thereafter it no longer applies.


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## Andy_and_lou

Mel, as in my case if your solicitor did not advice you of this issue, there obviously isn't an issue there. Just ring you Solicitor to be sure but I'm sure they would have adviced on this if it was true.


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## Mel

Vanilla said:


> I know that in the affordable housing schemes that I have dealt with for clients that these clauses are in the transfer deed and in the mortgage deed. Perhaps different councils have different covenants. Find it very strange though that the consent to sale is not applicable.
> 
> Mel- if your purchase is the second purchase, then it no longer applies- in other words the consent procedure is only applicable to the first purchase from the first tenant, thereafter it no longer applies.


 
I would think the house predates any affordable housing schemes. 
I'm not sure if it is still an actual council property or if it was bought through shared ownership scheme - I know that two previous owners were listed on the contract. 
Would the same covenant apply to the sale of a council house? 

(apologies for hijacking)


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## Andy_and_lou

BTW My solicitor has been dealing with council on the Sale of my house and they have never mentioned 'permission for me to sell'  My Solicitor just received the Clawback amount from the Council today in relation to the sale of my property, they know it's been sold and have never asked for any permission etc.


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## Mel

Andy_and_lou said:


> Mel, as in my case if your solicitor did not advice you of this issue, there obviously isn't an issue there. Just ring you Solicitor to be sure but I'm sure they would have adviced on this if it was true.


 
It's not clear to me whether it's a council house or under shared-ownership. My solicitor did mention that the seller needed a letter of release from the council, as he said these can be slow to produce, but not that my own details would be released. I'll check it with him, thanks!


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## RitaC

just regarding the issue on renting out affordable houses.  I know of a development in dublin 15 of 16 affordable houses, 1 of which has been rented out for last 4 years (since house was built) other approx. 3 years.  Council are aware of it but turn a blind eye to be honest


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## Sammie

can someone tell me if you can rent a room out, if you are an owner occupier, under the Rent-A-Room scheme in an affordable house - Part V Scheme - from DCC?


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## Mel

double post


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## Mel

Andy_and_lou said:


> Mel, as in my case if your solicitor did not advice you of this issue, there obviously isn't an issue there. Just ring you Solicitor to be sure but I'm sure they would have adviced on this if it was true.


 
I've spoken to my solicitor today - as this was a council house, then the sellers need to complete the form described by Vanilla above, stating how much they have sold the house for, where they are moving to etc.
I also need to add my details to this form. 
As you say, may be different for Affordable, 
Something to note if you are considering purchasing an ex-council property. This stands for 25 years from first purchase of the house.


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