Renting to family

Does anyone know how it works when you sell a property that has been rented to family, therefore outside of the requirement to register with the PRTB? Do you have to provide proof of this to potential buyers or to anyone for that matter, to prove that it’s not subject to the RPZ rules based on the (well below market) rent that was in place for the previous tenants? Rental income is declared so all above board.

Are you selling the property with vacant possession?

Yes

Not sure about your particular case.

When I recently sold my rental property, I had to show proof / documentation to the solicitor relating to the rental - monthly rent, proof rental was finished, etc.

In your case, if you did not register rental to family member, the property should not be listed on the RTB site (https://www.rtb.ie/check/index.html) proving it was not rented on the market. Thus, new landlord can set rent appropriately in RPZ.

Thanks. What did you have to provide as proof that rental was finished?

A potential buyer may have no intention to let the house. If they do, they are obliged to not let it above the previous prevailing rent. The risk is that the new tenant will subsequently go to the RTB, provide proof of the lower rent, and force the landlord to reduce it to the previous (lower) rent.

This is a bit of a difficulty for the buyer, as the RTB will not tell them what the previous rent was, nor (usually) is there a previous tenant around to verify what the rent was.

In your case it looks like there is no chance of a family member providing proof of the previous rent. You aren't likely to do so yourself either So I would propose to say nothing at all unless asked. At worst the purchaser may look for a sworn declaration before closing the sale that the property wasn't let in the two years prior to sale. I am not encouraging you to tell any lies. But there is basically zero chance of the previous tenancy coming to light in a way that would damage the interests of the purchaser.

Thanks NoRegretsCoyote. Since the tenancy was not registered with the PRTB does the previous rent charged still fall within the RPZ rules? I thought it was only for properties registered so if not registered in the last few years then a landlord can set the rent without having to adhere to rules around previous rent. Is this not the case?

Revenue will have information on rental income so it might be hard to say it wasn’t rented. Who can access this information and do Revenue and the PRTB share information?

Opal** said:

Thanks NoRegretsCoyote. Since the tenancy was not registered with the PRTB does the previous rent charged still fall within the RPZ rules? I thought it was only for properties registered so if not registered in the last few years then a landlord can set the rent without having to adhere to rules around previous rent. Is this not the case?

Click to expand...

I don't know the legislation in detail. But I don't think non-registration is a way out per se.

Opal** said:

Revenue will have information on rental income so it might be hard to say it wasn’t rented. Who can access this information and do Revenue and the PRTB share information?

Click to expand...

AFAIK it's the other way round. Revenue are interested in properties registered with the RTB that are not tax compliant. In any case Revenue don't know very much about the tenancy. All they know is that you declared rental income of €x in a given tax year. They are interested in collecting tax, and not much else.



As I said in my previous post, there is basically zero chance of the previous tenancy being used legally against any potential purchaser who wants to let the house. Use that information as you see fit!