Tenant Over Holding - Can't afford to keep renting/Can't Sell!!

[Queen St Bribie]

Hi First time poster long time stalker.

We have a rental apartment property in Dublin, which we have propped up for 15 years. Through this whole time it has been tenanted to one long term tenant.

We are now at the point where we can sell it and just break even and ultimately walk away with "only" the losses of the supplementary payments made over the 15 years, topping up the balance of debt payment to mortgage income.

Like many other Mum and Dad landlord's we only have been driven to this due to rental price caps. We would have continued to prop it up believing once debt was paid down enough we would eventually start to get some pay back, but there is just no visibility on this ever happening as we are locked into an extremely low rent and fixed increases way below inflation and market price.

We have served legitimate end of lease notice on the tenant, but he is well aware of the law on Overholding, and also aware of the back log with the RTB. We have lodged our application to the PRTB in April and we still wait......

Now effectively we cannot even sell the place, he is still paying rent, as such we know he is fully aware on how to play the overholding game. He also knows he has limited options to move to if any, and if he did he would pay significantly more rent, ie fair market rent.

What we are trying to seek is eventually he will have to move out and the above reality will dawn, its just how long and how much he costs us.
However one option remains, is it possible for the tenant in lieu of legally being evicted legally allowed to mutually agree a higher rent ?

As the landlord it seem ludicrous our only option is evict him and sell. Particularly given ultimately he would like to stay, and we would have him stay, however the rent just needs to start getting closer to market to more cover our cost.

Or is the law so messed up that we may only continue to make him homeless and sell ?

Many Many thanks

cheers
25Q

 

[Rasputin]

However one option remains, is it possible for the tenant in lieu of legally being evicted legally allowed to mutually agree a higher rent ?

Personally, I would stay well clear of this option as you are putting yourself in a very precarious position and handing all the cards to your tenant. The tenant could easily turn around and start paying the original rent and argue at any point that you extorted excess rent from him on threat of making him homeless. It sounds terrible without context, and isn't what you are doing, but I believe you could find yourself in trouble and potentially be giving yourself multiple potential headaches in the future.

Personally I would push through and get out now while the market is very much in your favor - it may not be forever.

 

[wondering]

As the landlord it seem ludicrous our only option is evict him and sell. Particularly given ultimately he would like to stay, and we would have him stay, however the rent just needs to start getting closer to market to more cover our cost.

As a tenant, if a landlord emailed me explaining the situation - assuming everything else is ok with the tenancy - I would definitely think about it and be willing to come to an agreement. As you mention, the options for moving at the moment are limited.

 

[imalwayshappy]

It pains me to say this but have you considered paying a cash incentive for them to leave the property €5k/€10k? The law is very much against you here (as is the case with all Landlords).

 

[NoRegretsCoyote]

As a tenant, if a landlord emailed me explaining the situation - assuming everything else is ok with the tenancy - I would definitely think about it and be willing to come to an agreement.

Except that would be illegal!

(and a landlord would be a bigger fool to leave written evidence of such a request).

 

[NoRegretsCoyote]

It pains me to say this but have you considered paying a cash incentive for them to leave the property €5k/€10k? The law is very much against you here (as is the case with all Landlords).

I've read about these situations a few times on AAM over the years.

I've always felt that a lot of these tenants can be bought off at a price that is cheaper than the alternatives of dealing with arrears, overholding, damage, keeping house off market, etc.

 

[Horatio]

Might your Tenant consider buying it off you?

Asking him directly is showing your cards but maybe he might have the idea all on his own. Somehow.

 

[wondering]

Except that would be illegal!

(and a landlord would be a bigger fool to leave written evidence of such a request).

That's why I said "assuming everything else is ok with the tenancy". If both parties are reasonable then no reason not to negotiate in my opinion.

It's not easy for anyone at the moment, people should be able to compromise and especially when it's a long term tenancy. Either eviction or litigation, should be last resorts in my opinion.

 

[galway_blow_in]

I've read about these situations a few times on AAM over the years.

I've always felt that a lot of these tenants can be bought off at a price that is cheaper than the alternatives of dealing with arrears, overholding, damage, keeping house off market, etc.

Anyone untroubled by overholding is unlikely to be affronted by the idea of being paid off so it should be an option for the landlord

 

[wondering]

Anyone untroubled by overholding is unlikely to be affronted by the idea of being paid off so it should be an option for the landlord

It's not really about money these days, it's about keeping a roof over your head. There are no places available at the moment to move to.

Just to be clear, I am not overholding and would never condone such a thing (The OP has said their tenant is overholding, I will take their word for it, however at the same time it's not clear from the rest of what she says that he is actually overholding).

 

[galway_blow_in]

It's not really about money these days, it's about keeping a roof over your head. There are no places available at the moment to move to.

Just to be clear, I am not overholding and would never condone such a thing (The OP has said their tenant is overholding, I will take their word for it, however at the same time it's not clear from the rest of what she says that he is actually overholding).

I’m saying that a tenant who overholds is unlikely to be outraged at the idea of being paid off

 

[NoRegretsCoyote]

That's why I said "assuming everything else is ok with the tenancy". If both parties are reasonable then no reason not to negotiate in my opinion.

Except it's illegal to raise the rent by more than permitted limits in an RPZ.

Even if a tenant signs their name in their own blood on a contract they can still renege and the RTB will support them.

Believe me I think this law is daft. But landlords should be alert to it's existence!

 

[Pinoy adventure]

And some folks think being a landlord is a walk in the park.

 

[PebbleBeach2020]

is the tenant stops paying rent, damages the property and lives there for free for say 2 years, wouldn't it have been cheaper for the landlord to retake the property (when tenant is out or something) change the locks, pack up the tenants belongings and leave them on the footpath for collection.

Let the tenant deal with the issue thru RTB. You can sell the property and yes you will be fined, but I don't think you would be fined in excess of 2 years rent, plus damages and the personal stress of dealing with all this.

Just my opinion.

 

[wondering]

Except it's illegal to raise the rent by more than permitted limits in an RPZ.

I am aware of this. The landlord of where I rent has tried to do exactly that, to hike the rent above RPZ limit. The way he went about it was to demand and throw his weight around rather than approach it in a civilised manner. The situation now is I won't deal with him. Biding time until the market changes to move.
Don't want to hijack the thread, but wanted to make the point in general that the way things are approached is important.

Even if a tenant signs their name in their own blood on a contract they can still renege and the RTB will support them.

Anyone can renege on anything. If a landlord reneges - as in my situation - it's not easy for a tenant to go to RTB while there is no option to move. Only if they can be sure that a landlord is decent enough, won't break into their home etc, but then, catch-22, if they were they wouldn't be reporting them in the first place!

Believe me I think this law is daft. But landlords should be alert to it's existence!

Agreed, they should be alert. As a tenant I prefer dealing with a landlord who is aware of the law as opposed to not aware!

 

[Queen St Bribie]

thanks all for replies, Im aware of the law on the rent limits within RPZ, I guess another way to broach the same point is; can the RTB in the mediation process or after they eventually rule he is in breach and must move out, can they grant the tenant this option should it be presented in lieu of homelessness ?

He will be homeless otherwise, he is an ok tenant, but he is by no means going to get a tenancy over many sexier / better on paper and in person, with better jobs other tenants in an application situation.

With regard to paying him off to move, I feel apart from the principal and the lump of cash, this is also ultimately illegal, he is currently in breach of lease and benefitting from a back log in a flawed system, I feel he could use this act further and claim to RTB he was being coerced to leave, again, as other noted for him, its a bit less about the cash and more a bout a roof over his head, if he a few grand from me, where is he going ?

If any posters would like to refer us to an appropriate lawyer we are happy to engage and take formal advice.


cheers all

 

[Brendan Burgess]

I am missing something here.

You have a tenant who is paying rent. OK, it's not the full market rent, but it's rent.

Why do you say you can't afford to keep renting it? The rent is covering the interest I presume so you are making a profit.

There are many landlords who have tenants who are refusing to pay rent and refusing to move out. It's little consolation, but it could be a lot worse.

You just have to bide your time. You will get him out eventually and then you can sell it.

Brendan

 

[Brendan Burgess]

is it possible for the tenant in lieu of legally being evicted legally allowed to mutually agree a higher rent ?

I hope it's absolutely clear that it's illegal to do this. You cannot mutually agree to break the RPZ limits.

If he does agree and pays the extra €500 per month for 2 years, he can then go to the RTB and will get it all back.

Brendan

 

[Queen St Bribie]

Personally, I would stay well clear of this option as you are putting yourself in a very precarious position and handing all the cards to your tenant. The tenant could easily turn around and start paying the original rent and argue at any point that you extorted excess rent from him on threat of making him homeless. It sounds terrible without context, and isn't what you are doing, but I believe you could find yourself in trouble and potentially be giving yourself multiple potential headaches in the future.

Personally I would push through and get out now while the market is very much in your favor - it may not be forever.

Totally agree, that was our plan in April, when his 9 months of notice lapsed, we had planned our exit a long way out, and did everything by the book. He is still there and we have not even had a peep from RTB, we have not engaged with him in any way since the RTB dispute was lodged for caution of this being used against us in the process.

My real concern is the market may be dipping currently and we miss the boat.

is the tenant stops paying rent, damages the property and lives there for free for say 2 years, wouldn't it have been cheaper for the landlord to retake the property (when tenant is out or something) change the locks, pack up the tenants belongings and leave them on the footpath for collection.

Let the tenant deal with the issue thru RTB. You can sell the property and yes you will be fined, but I don't think you would be fined in excess of 2 years rent, plus damages and the personal stress of dealing with all this.

Just my opinion.

we are not far off that TBH, we have no faith now in the system, and there is absolutely no visibility of time frames from the RTB, we ring up fortnightly to be told the same thing, just wait, and there is no firm feedback or update, its very tempting to just do what you have said, and flip the broken system back on the tenant

is the tenant stops paying rent, damages the property and lives there for free for say 2 years, wouldn't it have been cheaper for the landlord to retake the property (when tenant is out or something) change the locks, pack up the tenants belongings and leave them on the footpath for collection.

Let the tenant deal with the issue thru RTB. You can sell the property and yes you will be fined, but I don't think you would be fined in excess of 2 years rent, plus damages and the personal stress of dealing with all this.

Just my opinion.

You have a tenant who is paying rent. OK, it's not the full market rent, but it's rent.

Why do you say you can't afford to keep renting it? The rent is covering the interest I presume so you are making a profit.

There are many landlords who have tenants who are refusing to pay rent and refusing to move out. It's little consolation, but it could be a lot worse.

You just have to bide your time. You will get him out eventually and then you can sell it.

Brendan

Thanks Brendan, no the rent does not cover the mortgage ( its capital and interest ) and there are Body Corp fees of over 2.5k also, so it costs us thousands per year and we have done everything by the book, we even engaged with him a few years back when we nearly evicted him for failing to keep up rent, we worked this out with him.

It could be worse, but we all must strive for our own best outcomes, and thats all we are trying to do is garner facts. We are now very clear that no add rent can be paid, still un clear however can the RTB grant this option in lieu of him being homeless.

It is meant to be an investment not us funding social housing, and we have propped this for a long time now we cannot even sell it when we may finally claw some of the losses back.

 

[gipimann]

Would it be possible to put it on the market as a tenanted property (with a view to selling to another landlord)? Price might not be as keen as an empty property, but you never know.