Rent pressure zone affecting my property value

[lff12]

I know someone who sold a house that was rented out well below market rent. To the amount of between €550-€600 pcm.
He sold up anyway and the estate agent did tell him that when people rang up enquiring about the property, once they heard the rent (it was in a RPZ) they weren't interested. If was purchased as a buy to let again and the rent was quoted on daft as the market rent. That is, the new owners just upped the rent by €550-€600 pcm. The property was renter in three days. RTB are beyond useless. There's no enforcement. My advice is just raise the rent. The only people who will know are the old tenants, who will be long gone.

This happened to a rental beside me (the old tenants had just bought their own home. New tenants are paying 900 euros a month more than the previous tenant.
The RPZ system only works where the existing tenant is still in place, and believe me, they will hang on as long as they can because they have no real choice given the circumstances. There is no enforcement whatsoever if the old tenant moves of their own accord, because its no longer of any interest, and the new tenant will not know what the previous rent was. This would only work if there was a publicly available register of rents that was accurate, but nobody has suggested that.

 

[lff12]

Of course they do, they know it's not truly reflective of reality, but the crazy numbers make much better headlines.

More's to the point, there is more to the rented sector than Daft.

 

[Brendan Burgess]

If was purchased as a buy to let again and the rent was quoted on daft as the market rent. That is, the new owners just upped the rent by €550-€600 pcm. The property was renter in three days. RTB are beyond useless. There's no enforcement. My advice is just raise the rent. The only people who will know are the old tenants, who will be long gone.

Not only is this illegal, but very risky.

The tenant could agree and then just challenge it and the RTB would set the rent at the earlier rent.

Brendan

 

[Brendan Burgess]

As the rent was so low, the offer was 10's of thousand lower than market value.

You haven't put it on the market?
Investors will be put off, but potential owner occupiers won't.

It's hard to know the impact of this. But with a lot of owner occupiers trying to buy, I doubt it would have a huge impact.

To judge it, you would need to see an identical apartment which has not been let being sold at the same time.

Brendan

 

[NoRegretsCoyote]

It's hard to know the impact of this. But with a lot of owner occupiers trying to buy, I doubt it would have a huge impact.

If it's an apartment complex with a lot of rentals it can make a difference.

But any landlord trying to sell a 3-bed semi will almost certainly be selling to an owner occupier so negligible impact.

 

[PebbleBeach2020]

Not only is this illegal, but very risky.

The tenant could agree and then just challenge it and the RTB would set the rent at the earlier rent.

Brendan

There is no enforcement. At least in my experience. Does the RTB have the resources, will and powers to do anything about it????

 

[Brendan Burgess]

OK, so I am a tenant paying €1,000 a month for a property which should be €2,000 a month.
I leave to buy my own house and the landlord puts it up on DAFT at €2,000 a month.
I tell a friend and he signs a lease at €2,000 a month.
When he is in, he says "Hang on, I got a copy of the lease and the relevant rent is €1,000 a month."
He pays €1,000 a month while referring it to the RTB.
You can be absolutely sure that the RTB will uphold the €1,000 + whatever it is 2%?



Brendan

 

[PebbleBeach2020]

I don't know would somebody draw that on themselves knowingly. Tenants usually move out, get on with their lives and don't go onto daft to see the property they used to live in was rented for.

 

[Baby boomer]

On the other hand, a tenant will know well if they are renting a property for half the market rate. Why wouldn't they want to pass that benefit along to a friend? Brendan's scenario is entirely plausible and the outcome will be exactly as he says.

 

[NoRegretsCoyote]

I tell a friend and he signs a lease at €2,000 a month.

Most likely the new tenant will be a complete stranger and the old tenant (unless they have a massive grudge) won't be in the business of going to the new tenant with details of the lease. The RTB won't know because tenancies are only registered once at commencement as it stands. There is very little risk of a landlord being caught.


The incoming requirement of annual registration by the RTB will make this much more easy to police of course by the RTB.

 

[Leo]

More's to the point, there is more to the rented sector than Daft.

Yep, but it would require more than 5 minutes on Daft.ie for a journalist to figure out what was going on in the rest of the market.

 

[Frank]

RTB have changed rules and website.

Annual registration and penalty of 10 per month if late.

I have registered again, now need to find RT numbers :-(

1 more reason to get out.

 

[PebbleBeach2020]

So if you currently have a tenancy, then on the annual anniversary of that tenacy commencing, you need to now pay €40 each year to re-register the tenancy. There's a month grace period to register. So if your tenancy began on 1st May 2015, then you need to register by 1st June 2022 and pay €40 or you will be liable for penalty charges of €10 per month thereafter. If your tenancy began on 1st November 2021, then you need to register by 1st December 2022 and pay €40 or you will be liable for penalty charges of €10 per month thereafter.

If you have a new tenancy starting on say 1st May 2022, then instead of the €90 registration fee, you now pay €40 and then need to pay €40 again by 1st June 2023 (annual anniversary thereafter) to meet current requirements. So the initial registration has dropped from €90 to €40. So landlords who tenants turnover less than every 2 years will save money, while landlords who have long staying tenants, this new administrative requirement will cost them money.

 

[Lockup]

So if you currently have a tenancy, then on the annual anniversary of that tenacy commencing, you need to now pay €40 each year to re-register the tenancy. There's a month grace period to register. So if your tenancy began on 1st May 2015, then you need to register by 1st June 2022 and pay €40 or you will be liable for penalty charges of €10 per month thereafter. If your tenancy began on 1st November 2021, then you need to register by 1st December 2022 and pay €40 or you will be liable for penalty charges of €10 per month thereafter.

If you have a new tenancy starting on say 1st May 2022, then instead of the €90 registration fee, you now pay €40 and then need to pay €40 again by 1st June 2023 (annual anniversary thereafter) to meet current requirements. So the initial registration has dropped from €90 to €40. So landlords who tenants turnover less than every 2 years will save money, while landlords who have long staying tenants, this new administrative requirement will cost them money.

RTB screwing decent LL's ...never ..

 

[NoRegretsCoyote]

So if you currently have a tenancy, then on the annual anniversary of that tenacy commencing, you need to now pay €40 each year to re-register the tenancy. There's a month grace period to register. So if your tenancy began on 1st May 2015, then you need to register by 1st June 2022 and pay €40 or you will be liable for penalty charges of €10 per month thereafter. If your tenancy began on 1st November 2021, then you need to register by 1st December 2022 and pay €40 or you will be liable for penalty charges of €10 per month thereafter.

Bear in mind this will make it much, much easier for the RTB to identify breaches of rent review legislation either during tenancy, or when a new one commences.

If new rent is above maximum allowable you will need to demonstrate evidence of substantive improvements, etc, to justify it.

 

[PebbleBeach2020]

Bear in mind this will make it much, much easier for the RTB to identify breaches of rent review legislation either during tenancy, or when a new one commences.

If new rent is above maximum allowable you will need to demonstrate evidence of substantive improvements, etc, to justify it.

that's a cod. I know of properties that have breached the rental increases. A simple match of addresses in the database could give you any property whose increase is above the permitted amount.

 

[AlbacoreA]

There is no enforcement. At least in my experience. Does the RTB have the resources, will and powers to do anything about it????

Anyone I know who was brought to task by the RTB paid a fine that still made it worth the hassle. That's obviously anecdotal.

I suspect someone low bidding on a place with low rent, will likely ignore the rules, so the low rent is largely irrelevant to them.

 

[lff12]

The daft rent is the market rent.

Indeed the legislation governing rent reviews includes (or at least included) an obligation on the landlord to provide examples of equivalent properties at or above the rent they were wishing to increase it to.

But they still cannot increase to the market rent if that is more than the legal % they are allowed to raise the rent by.
They are indeed obliged to define market rent for the area, but only because tenants can challenge a rent rise if it is above market rent. That requirement is for the benefit of the tenant, not you as a landlord. You not allowed to rise the rent above the permitted rate.

 

[lff12]

This is a clear breach of the law, and while they might be getting away with it anybody (it doesn't even have to be the tenant) can report to PRTB and there is a determination order against them the fine is 15k plus up to another 15k in expenses, plus they will be ordered to refund the tenant the overpayment and reduce rent. The only cases I know of where this has happened is where a longtime tenant left who had been there 10+ years and was under market rate because the rent had not been raised, ever, left and the landlord re-let to new tenants at nearly double the rate. (Old tenant was gone so neither knew nor cared). I'm guessing that the majority of cases would be similar - where previous tenants had left of their own accord, so there was nobody to know that the rent had changed. Still a lot of unregistered tenancies so until there is a proper public database of actual rents there is no way to know if the landlord is telling you the truth if he/she says the rent was X.

that's a cod. I know of properties that have breached the rental increases. A simple match of addresses in the database could give you any property whose increase is above the permitted amount.