PRTB status for self contained room in owner occupier home

J

joker

Registered User
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7
Hi,
I have trawled the web to get answers before posting here,hoping for some pointers.
The situation is this :
I own a house that I and my family live in, attached is a garage that I have converted into a self contained room with a small kitchen and bathroom.
A social welfare tenant is occupying since April 1st 2010. The rental agreement was titled rent a room. According to revenue this qualifies for rent relief under rent a room scheme and am not required to register with PRTB.
See: revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-32.pdf?download=true[/url].

The section is:
4. Qualifying Residence
4.2 Self-contained unit
It is not possible to let an entire residence because the room or rooms that are let must form part of the residence and the residence must be occupied by the individual receiving the rent as his/her sole or main residence. The room or rooms can comprise a self-contained unit within the residence such as a basement flat or a converted garage attached to the residence. However, a self-contained unit that is adjacent to the residence but not actually attached to it cannot qualify for the relief.

I am having trouble with the tennant, he has fallen behind rent, he has been paying only part rent and owes around 900 euros. I belived I do not fall under PRTB, but I still served him 14 day and then 28 day termination notice with the rider that even though I believe this does not fall under the purview of PRTB, I was voluntarily following the PRTB to give him due process, I even made an agreement to write off the arrears and give him his deposit back provided he left on 31st aug. but he dit not vacate,but he has maintained since the dispute began that this comes under PRTB and is refusing to go.

I believe it is not,and I have not registered with PRTB.
I have approached a lawyer and after taking the initial fee of 100 euro still won't say if this tenancy comes under PRTB. I am keen to keep it out of PRTB, the process there is a disgrace and I will take for ever.
What are my options ?
Can I just cut off electrify to the conveted garage to force him to go? What is the position regarding this ? The converted garage is attached to our house, water, electricity and garbage bins are all shared. Since it is a converted garage it has a separate enterence like a patio door.
The moot question is does it come under PRTB act ? I have lodged a query with PRTB from their website, but I am sure if I will get a reply.

Any opinions?

Grateful for any advice and pointers.

Thanks a mil.
 
I'm going to go out on a limb here and say just because you qualified the rental agreement by calling it rent-a-room, it isn't. Its effectively like renting a granny flat, or annex to someone. Its a self contained unit.

I think you are going to find yourself in trouble.
 
If you read the link below, it appears the PRTB view such tenants in granny flats as tenants with associated rights, rather than licencees under Rent a Room. There dies seem to be a conflict between this and Revenue guidelines. I would proceed with caution, definitely don't cut off the electricity.

[broken link removed]
 
SarahMc said:
If you read the link below, it appears the PRTB view such tenants in granny flats as tenants with associated rights, rather than licencees under Rent a Room. There dies seem to be a conflict between this and Revenue guidelines. I would proceed with caution, definitely don't cut off the electricity.

[broken link removed]
Click to expand...
As SarahMc believes, she is correct -
In the RTA 2004, a dwelling for the purposes of the Act is defined as:
‘‘dwelling’’ means, subject to subsection (2), a property let for rent or valuable consideration as a self-contained residential unit .....‘‘self-contained residential unit’’ includes the form of accommo-
dation commonly known as ‘‘bedsit’’ accommodation;
Click to expand...
Thus, as your tenant is in a self-contained residential unit, you have a tenancy with the tenant and are within the remit of the PRTB.

However, Section 25 states:
25.—(1) This Part does not apply to a tenancy of a dwelling where
the conditions specified in subsection (2) are satisfied if the landlord
of the dwelling opts, in accordance with subsection (3), for this Part
not to apply to it.
(2) Those conditions are—
(a) the dwelling concerned is one of 2 dwellings within a
building,
(b) that building, as originally constructed, comprised a single
dwelling, and
(c) the landlord resides in the other dwelling.
(3) A landlord’s opting as mentioned in subsection (1) shall be
signified in writing in a notice served by him or her on the tenant
before the commencement of the tenancy.
Click to expand...
However, I have seen PRTB cases where is section was applied and it determined that the building was converted into 2 flats, the owner in one and the tenant in the other - they both used the same front door thus, the hallway was communal.

In your case, the tenant is in a completely self contained unit it it must not only comply with the RTA 2004 but also with the Housing Standards for Rented Accommodation.
 
Hi facetious ,
Do you not think I qualify under section 25 ? I satisfy all those conditions and by making agreement as rent a room scheme I have made condition 3 clear ? No ?.
The converted garage is such that any problem like water pipe burst, electrical issues, bins not being picked up etc in the part of the house i live in will effect the other converted garage dwelling. So how is that separate ? Some switch/ overload in the part of the house can trip the electricity in the part of the house rented out.
Besides being attached to the house one of the bedrooms we use is right above the converted garage.
The tennant also uses our garden shed to store his bicycles and has used our back garden to dry clothes.
Going by the PRTB route will take months and even after that compliance is not guaranteed, and almost no hope of recovering back rent. Given that loss, I am indeed think thing to go ahead and register with PRTB and then disconnect electricity..and let the tennant do the running around and when it goes go to PRTB, pay the fine and be done with it..atleast the tennant is out of the house. Any idea how much the fine I would be? Only other way is somehow frustrate the tennant to go of his own accord. Everything is stocked against the landlord here..the tennant can do anything. My options are pretty narrow here. Two government agencies (revenue and PRTB) hold contrary interpretations of the same act.
Really frustrated here..

Thanks very much for your time and your replies .
 
As you now believe that your rented property comes under the remit of the PRTB, you will I presume be prepared to refund to Revenue the tax relief you obtained under the rent a room scheme.
 
joker said:
Hi facetious ,
Do you not think I qualify under section 25 ? I satisfy all those conditions and by making agreement as rent a room scheme I have made condition 3 clear ? No ?.
The converted garage is such that any problem like water pipe burst, electrical issues, bins not being picked up etc in the part of the house i live in will effect the other converted garage dwelling. So how is that separate ? Some switch/ overload in the part of the house can trip the electricity in the part of the house rented out.
Besides being attached to the house one of the bedrooms we use is right above the converted garage.
The tennant also uses our garden shed to store his bicycles and has used our back garden to dry clothes.
Going by the PRTB route will take months and even after that compliance is not guaranteed, and almost no hope of recovering back rent. Given that loss, I am indeed think thing to go ahead and register with PRTB and then disconnect electricity..and let the tennant do the running around and when it goes go to PRTB, pay the fine and be done with it..atleast the tennant is out of the house. Any idea how much the fine I would be? Only other way is somehow frustrate the tennant to go of his own accord. Everything is stocked against the landlord here..the tennant can do anything. My options are pretty narrow here. Two government agencies (revenue and PRTB) hold contrary interpretations of the same act.
Really frustrated here..

Thanks very much for your time and your replies .
Click to expand...
I had visualised that your ex garage was attached only by one wall at the side of the house and not integral. In this new senario, as an integral part of the house, you may well be exempt from PRTB remit.

Your best bet is to contact the PRTB, explain the exact layout of the rented room (or a potentially to be rented room) and get their advice on the situation - though don't be too reliant on what one person says initially, it may necessitate several phone calls or emails.
 
It seems a tricky situation.

However, you seem to think you can have the best of both ways. By this I mean, to let under the rent a room to avail of the tax free income or go with a standard lease that falls under the realm of the PRTB (and had less favourable tax treatment) to get the Tenant out when the relationship has soured.
I dont think its as simple as this. You have an agreement with this tenant under rent a room (ie a licence to occupy) of which the PRTB have no remit. How can you retrospectively change the agreement with the tenant to get it to fall under the remit of the PRTB? If this is possible, will you also retrospectively declare all the rent a room income as rental income subject to tax?


You really need to get the solicitor you paid money to for advice to give you the advice you need.
 
round1 said:
As you now believe that your rented property comes under the remit of the PRTB, you will I presume be prepared to refund to Revenue the tax relief you obtained under the rent a room scheme.
Click to expand...

Why?

Did you not read the extracts quoted in the opening post?
 
T McGibney said:
Why?

Did you not read the extracts quoted in the opening post?
Click to expand...

Because the PRTB does not apply to 'rent a room' schemes. As far as I know because you are not bound by the PRTB you can lodge a claim with the small claims courts.
 
From revenue document (link posted in my opening post), this makes it clear this tenancy does not need to be registered:
--------
9. Requirement for tenancies to be registered
Most landlords are required to register details of their tenancies with the Private Residential Tenancies Board (PRTB)14. One of the exceptions to this requirement is a dwelling in which the landlord also resides. As the individual who avails of the rent- a-room relief scheme must occupy the premises as his/her sole or main residence, he/she does not have to register tenancies with the PRTB.
-------
Further, I lodged a query with PRTB via their website for clarification regarding the need to register, they would not say either way, what they said was that I need to interpret the act myself and decide for myself of the requirement to register.
So really from everywhere it feels like I am hung out to dry.
In ever way the converted garage is an integral part of the house, it also has a door for the converted unit to the part that I live in, but temporarily boarded up. To convert the garage to a self contatined unit, I had to do very little modifications structurally, externally I only had to replace the rolling garage shutter door with a patio style door, and do the flooring and dry walling inside.
The converted unit gets power, hot water, water from overhead tank and my hot water tank. The converted garage and rest of house are one address, the tenets letters arrives through my letter box and I drop his letters to him.
The converted unit is very much a integral part of the house.
So, given the circumstances, in my view the best course weighing all the costs etc would be to register with PRTB then to disconnect the electricity, have the tennant take the case. At the hearing I would argue that it does not come under PRTB, if it is ruled that it is then pay the fine and be done with it (at least the tennant is out of my property ). I am assuming PRTB if it rules against me will consider mitigating factors (rent arrears,over holding etc)
The best outcome will be that the tennant gets frustrated and leaves. I would not be entering the property or changing locks, just doing changes in the part of the house I live in.
I am increasing leaning towards this course of action.
Every one I ask, even paid lawyers, want to play safe and give the standard advise to register with PRTB.
The question boils down to this :
Revenue has clearly determined this to be rent a room scheme but PRTB has officially no stance on this situation, so what should an ordinary punter make of this ?
 
I'm unsure why people need to see both sets of legislation reconciled i.e. it being a rent-a-room for the purposes of income tax, but falls to be registered under landlord/tenant/prtb legislation.

By the way, rent-a-roomers typically only have a licence. Giving anyone a lease denotes them having tenancy rights. There's a world of difference between a licence and lease - the fact the tenant has a lease, swings it for me in favour of PRTB registration (with consequent benefits for the leasee).
 
This is pretty clear cut. You have been letting out a self contained dwelling and you owe revenue quite an amount of back tax and fines.
If you don't want a stranger mooching around in your house then you are not entitled to the tax benefits of a rent a room. You can't have it both ways.
 
Ok, agreed it may be my ignorance for not entitling the memorandum of agreement as "license", but it does have it the title of the agreement as "agreement under rent a room scheme", also, the rental period mentioned is 12 months starting from march 2010., the agreement also has the clause that in the absence of fresh agreement after 12 months, it will continue on a rolling basis for 30 days, and either party can end the agreement giving 30 days notice.
PRTB act also states that it cannot become a license or rent-a-room scheme merely by titling it as such.
 
TommyB,
Revene is very clear cut, I do not owe any taxes, and I have declared this income. I have spoken to revenue, their document in my opening post could not have been more clear. In fact they mention that I may voluntarily opt to be accessed, but not necessary, and that my mortgage relief too is not effected.
On the revenue side of things there is absolutely no ambiguity. They have made it pretty clear what constitutes rent-a-room scheme.
 
And yes, I must mention that an official from revenue had last year actually visited my house looking for the tenant, although I do not know if it was under that pretext to check if it indeed qualifies. it has been more than 16 months since that, and I have continued to declare this income under rent-a-room scheme to revenue, i have not not any issue with revenue. Besides I have run this by two different accountants, and their interpretation is the same as mine.
 
Hi Joker,

You absolutely want to keep away from the PRTB and every suggestion that it isn't a rent to room scheme - particularly in light of what the Revenue has said. If you try to register with the PRTB and acknowledge they have power / a role in this situation then you are giving your rights away... as you have more rights under the 'rent-a-room' than as a landlord.

So get rid of the person. I think there are two options... 1) Small Claims Court, 2) Police??
 
Small Claims and Police won't deal with this.

I reckon you need to set a date and have some burly handymen to help assist. I trust you have copies of all notices given ? If there's no movement by that date, wait until he leaves and then move in and change the locks.

Drastic? Yes. Other options ? None, I can see.
 
Kildavin said:
Small Claims and Police won't deal with this.

I reckon you need to set a date and have some burly handymen to help assist. I trust you have copies of all notices given ? If there's no movement by that date, wait until he leaves and then move in and change the locks.

Drastic? Yes. Other options ? None, I can see.
Click to expand...

You may be absolutely right about the small claims court, but it is supposed to be the legal recourse.

**

2) Lodger vs. Tenant: A person renting a room in your home isn’t a conventional “tenant" but is instead classified as a lodger. This means the arrangement is not captured by the Residential Tenancies Act 2004 or the PRTB. From a practical point of view, you don’t have to register with the PRTB and you are subject to far less legal obligations and duties than a conventional landlord. On the other hand, your lodger will not have the statutory obligations that a “tenant” must abide by.

Because of this, your arrangement with the lodger will be governed by what you agree in the Lodger or Licence Agreement and hence the importance of having a written agreement. Include things like the lodging fee, payment dates, licence period and house rules as well as a minimum notice period which each person must give if they want to end the arrangement. You should also allocate responsibility for items like the utility and household bills.

If a dispute arises, your lodger can’t lodge a claim against you in the PRTB and vice versa. Instead, your avenue for redress is to pursue your lodger in the Courts and vice versa. If, for example, a dispute arises regarding deposit retention or reasonable notice periods, your lodger can lodge a claim in the Small Claims Court.

[broken link removed]
 
I have asked PRTB that if I were to register with PRTB, would that construe that this indeed is governed by the PRTB Act ? would the registration staff verify if a registration is valid under the ACT ? his reply was that it would not be checked but that only the adjudication tribunal could rule on that. so I think even if were to register it would not automatically mean that PRTB act applies. But I take your point TTI.
I looked in PRTB FAQs, for non compliance in registrations, there is a process, so if my tenant were to approach PRTB with a dispute, they would first issue me with a notice to register, it is at that point that I could contest their jurisdiction. if it was ruled that I need to, then I could pay the late fee and register, if after their determination against my position I fail to register then there is a fine of euro 4000. But I would pay the late fee and register.

Also, as far as possible, I would like the tenant not to create a scene in front of my house.
I have copies of all notices given, he should have left on the 1st Aug, but he has since texted me he will will quit on 1st sep. So I will on 1st sep disconnect power to the rented part, making the place unusable, and hopefully that should make him go, or else he can do the running around to PRTB etc., I have have had enough of running around.
 
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