Can anyone advise,what are the rules around the 4% increase

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lopin

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Hi All

Can anyone advise,what are the rules around the 4% increase.
The following is my situation. Tenant has moved out and I will have to spend around 4 to 5k doing up apartment. It was rented at about 80% (1150 pm) of market value however if I have to spend around 4 to 5k I would expect to get 100% of market value (1,500 pm)

Thanks
 
4-5k is unlikely to qualify as sufficient to exempt you from the 4% limits. The works needs to be much more significant than redecoration, see here.
 
Who polices this rule? If you spend money redecorating to make the place suitable for re-renting and charge 15% more who will knock on your door to see you've been a naughty boy... that was more than 4%. For example a new tenant may not know the previous rent and the details at the RTB may be old and not even sure if they show rent levels. I'm unsure of penalties but can't you always say you felt that the changes you made were substantial?
 
So if new tenants don't know previous rent what are the consequences for the landlord?
This is a very unfair rule for the decent landlord. I have a property let at E1300 and the market rate is 2000. I'd have no problems pushing the interpretation of it to the limits as it is unjust and besides as I said who is there to report me for being a 'naughty' boy in perhaps renting it 500 euro below market rate as opposed to 700. It's nuts...
 
You seem unfamiliar with how the system works. If you are a Landlord you should be aware of the PRTB and how it works. They have judgments on their site you should read through some of them at least. They are enforced through the courts. Some of the fines for some offences like illegal eviction can be into 5 figures. There are no figures on how often judgments go to court or if they are successful. For either LL or Tenant.

I can't find an exact link, but it been suggested that the LL is obliged to tell the new tenant the old rent and can be fined if they don't. They can be fined if they raise the rent outside the rules. If any one has been fined and been brought to court I don't know. How tenants deal with this, I have no idea, some might ignore it to get the place, some will manipulate it to their advantage as will LLs. Human nature and all that.

It not simply about the rent. It has to effect the selling prices of properties also.
 
Leo said:
4-5k is unlikely to qualify as sufficient to exempt you from the 4% limits. The works needs to be much more significant than redecoration, see here.
Click to expand...

That is a guide. That is the PRTB's interpretation. It may be incorrect. Only a court could decide.

I would suggest that 'substantial refurbishment' could be spending 5K on redecoration in a property where the rent is say 10K per annum.

Substantial change is more clear cut. And note how the PRTB gave examples of those but did not for 'substantial refurbisment'.
 
lopin said:
Hi All

Can anyone advise,what are the rules around the 4% increase.
The following is my situation. Tenant has moved out and I will have to spend around 4 to 5k doing up apartment. It was rented at about 80% (1150 pm) of market value however if I have to spend around 4 to 5k I would expect to get 100% of market value (1,500 pm)

Thanks
Click to expand...


Part of Leo's link mentions how the rent would be reflected in the new value following refurbishment. It is without doubt easier and more financially beneficial as a landlord to refurbish once a tenant leaves. This often costs well in excess of a couple of grand. 5K gets you a full house painted, a full cleaning, new cooker or other furniture, repairs, some tiling, maybe a regrouting of the bathroom.... A large cost when your rent is 14K. Meanwhile as the work has to be done without a tenant you're out of pocket for at least a month on rent.

So then you might think to yourself, will I bother doing it at all as the rent stays at 1150 instead of market rent, plus your house is now less valuable than another because it's value is linked to it's rental value in the rental market.
 
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