Legal issue: Long Term Lease with Council

C

Clueless Clive

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Hi All

After recently purchasing an investment property with intent to lease on a long term basis to the council, ive now been told that since the 'Housing for All' policy, the Department of Housing has ordered the halt to any further long term leases.

I have received the requirements back in July for what work to do to the house (B3 BER rating, new kitchen / bathroom, floors, painting etc etc) and have put around 50k into renovations on top of the purchase price, to bring it up to council specifications.

I've obviously not signed anything, just have email correspondence from the council as to what spec it needs to be before they'll inspect it, which i've completed, now they have told me this.

Wondering do I have a leg to stand on / where to escalate / how to escalate?
 
Why do you say that, because of the futility of dealing with councils, the cost of legal action, stress of both, or for some sort of moral reason?
 
You have this idea that you've found the perfect investment, it can't go wrong by renting to the council, and it's all their responsibility to make sure the place is kept well and maintained to a good standard. What you forget is, an awful lot of tenants stop paying the council after a short while and if that happens the council stop paying you. Next is trying to get those tenants out of your property? Ha ha, good luck with that. That's only for starters. I'd imagine the councils don't want to go down the long leasing road anymore because they're up to their necks in money owed
 
Clueless Clive said:
Thats not how it works.
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There are a number of factors in how the long term leasing works. Firstly if there is an over concentration of council tenants be they HAP, rent allowance, ras etc the council will not have additional properties. The last time I checked it was no more than 40% of properties on any given road.

I suspect the council are holding off entering any new arrangements until the new legislation is approved. This is the indefinite leases, the max 2% rent increases etc.

I am interested in the 50k to bring the house to ber b and the other requirements in the report. I was not aware of min ber requirements.

If you are putting in new kitchen, bathroom, floors etc the question I would have ask is are these all needed.

As a final thought I would sit down and work out how little you can spend on it and if the return is worth the work. If not then just sell the property on and hopefully make a profit or at a min break even.
 
Council requirements for 10+ year leases are new kitchen, new bathroom, BER B3, Combi Boiler, new floors, doors, ETIC cert (which meant the hosue required a full rewire). The council were invovled before purchase, where they confirmed if there was a need for a house in the area or not, on that basis I bought it. They then confirmed the requirements for leasing, which i've complied with at my own expense.

At this point i'm considering legal action, for all the good it will do, perhaps a decently written solicitors letter will suddenly find the property eligible for long term lease. I was hoping someone with more experience could assist.

Thanks
 
I would consider renting it privately (work out the cost of the refurbishment for that) and make a decision or sell it on and save yourself the stress and heartache.

I have dealt with council for 10 plus yrs and you need to be very careful with them and don't let them away with anything.
 
losttheplot said:
I would imagine if you haven't signed anything then there's no legal agreement in place. Nothing stopping you taking legal action or getting legal advice but without a contract, probably little chance of success.
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Probably correct just looking at it through the prism of basic contract law. However, as the council is a public body, you might have a case based on legitimate expectation and your incurring of expenditure based on representations made to you. (Detrimental reliance.)

A consultation with your local solicitor and a ferocious letter from him/her to the council threatening fire and brimstone will set you back one to two hundred euro or so and might well get a result for you. No guarantees though. Getting an opinion from a junior counsel specialising in public body affairs and/or contract law would probably cost another 500 or so.

Hard to say whether it's worth doing or not. OP has already sunk 50k into the project. Lot of variables in terms of likely sale value, likely private rental value, etc etc. If it were me, I'd at least chat to the solicitor.
 
Reading your first post I would think hat you have no basis for any claim against the council. You invested money in the hope of securing a contract, you didn't get a contract. Thats business, people often invest huge sums to open a new shop/restaurant etc. but customers are not interested. Thats business.

In your second post you say that the council were involved before the purchase. What was the extent of their involvement, is there any correspondence. This make give you a (week) basis for a claim.

Council policy will probably evolve. You could rent privately for now and approach the council again. I wouldn't alienate them with legal threats
 
Are you for real? You bought a house and contacted the council to see what was required standard to enter a long term lease arrangement. You then went off and dud the house upto the standard.

At this point, I presume you discovered the council weren't taking additional houses under long term lease. There's no contract. No agreement. Nothing. And you want to sue the council for not accepting your house?!

Would you consider suing a bank for being closed on a Saturday, when you had an opportunity to buy something on sake in a shop that subsequently was sold out come Monday morning.

As advised by an earlier poster, you must be in the small majority of individuals who are considering entering the rental sector at such a volatile and uncertain time for landlords. My advise, sell the property and consider yourself availing of a lucky escape. If you have done as good a job renovating it as you imply in your post, you should still turn a profit on the transaction.
 
You probably won't be much out of pocket if you sell up and walk away.

House prices have increased a bit since whenever you bought and you have added value as well.

It's a shame but this stuff happens.
 
Clueless Clive said:
I've obviously not signed anything, just have email correspondence from the council as to what spec it needs to be before they'll inspect it, which i've completed, now they have told me this.
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As others have said, you have no case here and the council will have deeper pockets than you, so legal action will be expensive as well as futile.

Advising you of the requirements for a property to qualify for the scheme puts them under no obligation. Even the fact that they told you there would be an inspection before it would be considered should be enough to confirm they're under no obligation.
 
Clueless Clive said:
Department of Housing has ordered the halt to any further long term lease
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These long-term council leases entail a large-scale transfer of public funds to build private wealth and are one of the most degenerate & exploitatative aspects of the housing crisis. It's hard to empathize with landlords who thought they could get a slice of the profiteering pie and now got burnt.
 
tomdublin said:
These long-term council leases entail a large-scale transfer of public funds to build private wealth and are one of the most degenerate & exploitatative aspects of the housing crisis.
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Or they are a clever way of allowing the cost to be spread over many years and don't leave local authorities with a large refurbishment bill in 25 years for a property they may not even need anymore.
 
NoRegretsCoyote said:
for a property they may not even need anymore.
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Given that a vast supply of high-quality public housing is clearly just around the corner it makes sense for councils to worry that they will soon own too many houses and to give them away for free right now to deserving rentier citizen-landlords in recognition of their enormous personal sacrifices.
 
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