Can you use the licensee rule to keep your property without a tenant for 2 years?

D

DannyBoyD

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@T McGibney raises an interesting point in this thread

https://www.askaboutmoney.com/threa...nth-is-this-a-house-share.232377/post-1838809

Creating another thread as I dont want to de-rail that one.

If licencees do not have to be registered with RTB:

Is the following possible

1.licensee arrangement for two years*, property owner has access / use of room

2.Property is not registered with RTB** for two years

3. At the end of two years, licencees leave & property is rented out at market rent as property has not had a registered RTB tenancy for two years.



*I'm aware licencees can request to become tenants after 6 months, though I don't see how that works in practical terms as they can't demand property owner gives up their room - update - see additional post on this, IANAL

** my accountant differs from t mcgibney in regards to mortgage interest relief & rtb registration, but I take their point that theres no facility to register licencees.

***not asking about rent-a-room tax relief, take it that there is full compliance tax wise.
 
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DannyBoyD said:
*I'm aware licencees can request to become tenants after 6 months, though I don't see how that works in practical terms as they can't demand property owner gives up their room
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I'm not an expert.

Is this to cover the scenario where the landlord has already moved out and 6 months later the licencee has acquired a tenancy? i.e. licencee(s) has/have been living in the house without the landlord being present for 6 months and can convert their arrangement from licence to tenancy
 
Extract from the relevant RTB form:

"a. Exemption 1 – No Tenancy in the Previous Two Years
No tenancy of the dwelling subject to tenancy existed during the 2 years
immediately preceding the date on which the current tenancy commenced."

So, if you have licensees for two years, there's no tenancy?
 
@Páid
This is what the RTB say

"There is a formal licence agreement where the owner is not resident, not entitled to exclusive use and has continuing access to the accommodation. The law gives a licensee the right to request the landlord to allow him / her to become a tenant provided:
  • He/ she is in lawful occupation of the dwelling.
  • A tenancy is in place for at least six months."
Reading it again, it says right to request, doesn't say property owner must comply.
 
MugsGame said:
How can a tenancy be in place for 6 months if they're not a tenant to begin with?
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That would have to be a question for the RTB.

on your Q2, not sure off the top of my head, will have to look it up - fiver says it ain't clear!
 
IANAL

I think, if I read this correctly, it refers to a licensee of a tenant and not the property owner. And that being the case, a licensee of the property owner cannot request to become a tenant with part 4 rights etc.,


Extract From 2004 act - Chapter 6
49.—(1) Subject to this Chapter, the provisions of this Part apply regardless of the fact that the dwelling concerned is occupied at the particular time by either or both—(a) multiple tenants,(b) one or more persons who are also lawfully in occupation of the dwelling as licensees of the tenant or the multiple tenants, as the case may be.(2) In particular, the fact that the continuous period of occupation, as respects a particular dwelling, by one or more of the multiple tenants is less than 6 months at a particular time does not prevent a Part 4 tenancy coming into existence at that time in respect of the dwelling if—(a) another of the multiple tenants has been in continuous occupation of the dwelling for 6 months, and(b) the condition specified in section 28(3) is satisfied
 
does anyone have the exact legislation where the RPZ exemptions are defined?

found it (I think - again IANAL)

S.I. No. 353/2019 - Residential Tenancies Act 2004 (Prescribed form) (No. 2) Regulations 2019​

link: https://www.irishstatutebook.ie/eli/2019/si/353/made/en/print

extract:
□ Exemption 1
An exemption under section 19 (5)(a) of the Residential Tenancies Act 2004 applies to this first rent setting under the tenancy of the dwelling concerned because:
□ no tenancy existed in respect of the dwelling concerned during the 2 years immediately prior to this current tenancy commencing;

and you can truthfully answer that no tenancy existed.

anyone want to poke holes in this?
 
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DannyBoyD said:
Is the following possible

1.licensee arrangement for two years*, property owner has access / use of room

2.Property is not registered with RTB** for two years

3. At the end of two years, licencees leave & property is rented out at market rent as property has not had a registered RTB tenancy for two years.
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IANAL but I don’t see an obstacle here.

Licensee could even become a tenant at the two-year point at market rent.
 
DannyBoyD said:
Extract from the relevant RTB form:

"a. Exemption 1 – No Tenancy in the Previous Two Years
No tenancy of the dwelling subject to tenancy existed during the 2 years
immediately preceding the date on which the current tenancy commenced."

So, if you have licensees for two years, there's no tenancy?
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Seems straightforward enough. If a property only had licensees for two or more years previously, ie the owner let rooms separately and had full access (eg b&b) or the owner lived in the property, and then wanted to let the property as a full tenancy dwelling, how could there be any issue with charging the full market rent? Presumably, licensees would have left and the property would be vacant or the owner would leave and the licensees could become tenants.
 
I think the tax position is different however if you have licensees.

You are more limited in what you can claim.

IANATE - but I think mortgage interest would be excluded.
 
DannyBoyD said:
I think the tax position is different however if you have licensees.

You are more limited in what you can claim.

IANATE - but I think mortgage interest would be excluded.
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I think a tenancy has to be RTB registered to claim mortgage interest and licensees are not registered. There's the rent a room option for licensees but the ceiling may not suit everyone.
 
@bipped I'm thinking along the same lines, however @T McGibney disagrees (they post their reasoning in another thread linked above).

I'm excluding rent a room here - different scenario.
 
DannyBoyD said:
@bipped I'm thinking along the same lines, however @T McGibney disagrees (they post their reasoning in another thread linked above).

I'm excluding rent a room here - different scenario.
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From my reading a licensee type rental situation would either be Schedule D Case I (income from a trade) or Case IV (Miscellaneous Income). It looks as though occasional bookings would be Case IV whereas intention to run a licensee rental as a business would be Case I.

I'd be interested to see @T McGibney 's explanation detailed further than RTB registration Vs compliance with the Residential Tenancies Act 2004.
 
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