Changes to rent controls announced - discussion

[Greenbook]

Tenants will now have different levels of security of tenure depending on when their tenancy started and the status of their landlord.

Excellent point there! Lets say that I am a large landlord so my 4 tenants have large landlord leases. I sell two of my properties? Do the tenants retain the large landlord leases even though I am no longer one. Likewise as a large landlord, I might sell one property to a single landlord with the tenant in situ. What is the status of that tenant. Or a married couple large landlord with 6 jointly owned properties might divorce and split the properties 50/50. What is the status of those tenancies?

And also, who keeps track of all this.

It is byzantine as another poster said - expect Residential Tenancies (Amendment) Acts No1, 2, 3 etc. as these questions turn up and have to be answered.

 

[Greenbook]

What I find really odd is that I haven’t heard a single politician, from any party, make the blindingly obvious point that rent controls are counterproductive - they make a bad situation worse.

The same thing happened in 2021 when the HICP/2% inflation cap was introduced in stages. I've read the Dail debates. Everyone thought it was a good idea (both government and opposition), the only question was whether it was strict enough. No one asked the very obvious question; who would invest long term in a scenario like that - we now have the answer.

It's groupthink again.

 

[Greenbook]

SF/Paul Murphy etc. will have a field day collecting the votes from all those with RPZ rents headed for reset in 2032.

100% correct. A promise of a rent freeze will be a sure fire vote getter in these circumstances.

 

[letitroll]

Rents in Ireland have become like income taxes and the minimum wage......the central government of the day sets them......and political parties compete to offer ever more generous rates to the cost of the country......the most dangerous thing about rent setting by central government is it comes with no overt cost to the ruling party of the day.....a government cutting income tax has to suffer the consequences of weaker exchequer returns which constrains its policy aspirations.

The magic of rent controls is that you are (in the short term) playing with other people's money (namely landlords).....but soon enough reality finds you....and you get wholesale exits from the private rental sector.....the same rental sector where the Government is the largest purchaser of rental services....

Sad day for the country.

My only hope is that there sits on the sidelines here a bunch of section23 style grants and VAT exemptions that they are going to throw at developers to build the apartment with existing planning that are ready to go. They blew this measure....time to get the bouzake out on subsidies and grants and tax breaks.

 

[letitroll]

What I would also say on foot of this reform - is that its high time a genuine party of the right was formed in Ireland.....FF/FG have been co-opted by the left & made weak by a decade plus in Government....deep down I know that FF/FG leadership know what they are doing is counter to the best interest of the country.....but every day they get up in the Dail they are faced down by a wall of leftist lunatics screaming at them that everybody can have cake and eat it too.

 

[Dr Strangelove]

It is byzantine as another poster said - expect Residential Tenancies (Amendment) Acts No1, 2, 3 etc. as these questions turn up and have to be answered.

Honestly there are retail businesses which need regulatory knowledge than landlording in Ireland soon will.

By the time the legislation is through the Oireachtas we could well have another president in place. Her first act should be to convene the Council of State and refer this pile of mess to the Supreme Court.

 

[letitroll]

A few bits of advise as I digest these changes and their implications:

My advice to landlords looking at these changes is that one should assume that the market rent reset in 2032 will never come - SF will be in control then and they will have campaigned on a nationwide rent freeze.

You should also assume that right now is the most freedom you will have for a decade plus to do with your rental property what you wish (sell etc.)....as the rental market becomes increasingly dysfunctional there will be increasingly draconian measures put in place by successive governments to trap landlords and their properties in the sector.

It shouldn't be so but now it is - it is contrary to your best interests to be a responsive/good landlord who looks after your property (upgrades, maintenance).....tenant turnover is your friend.

Finally landlords should prioritize foreign born nationals as tenants...preferably transient workers...on average their tenure will be shorter and so you can get back to market rents quicker. No Irish or dogs need apply for rental listings.

Sad state of affairs......this is how you nuke a property sector.....and a countrys aspirations to house its population.

 

[Persia]

Finally landlords should prioritize foreign born nationals as tenants...p

Prefer eastern European tenants anyway. I don't rent to my fellow Irish, messy, no discipline & entitled.

I'm a large Landlord ( 5 properties) my dear old Mum would have been happy.

Have 2 properties let to Ukrainians which I intended to return to the main rental market with a reset rent. Won't be doing this now. Will advise them of my intention now and sell when they have sourced alternative accommodation.

God knows when that will be but I've found Ukrainians to be smart and resourceful.

I really liked the monthly rents coming in, impossible to replicate but I cannot keep up or tolerate this constant meddling and tinkering by sucessive incompetent ministers, it reminds me of Fr Ted and Dougal trying to get a dent out of a raffle car.

"Shur no one will notice Ted"

 

[letitroll]

it reminds me of Fr Ted and Dougal trying to get a dent out of a raffle car.

"Shur no one will notice Ted"

Exactly....look where we are....what started with a few RPZ postcodes in central Dublin has expanded to the whole island......oh what a web we weave!

 

[Pauley]

I first thought these changes were a step in the right direction Now it seems that the gov have just made "bag holders" out of "small" landlords, esp those stuck in below market RPZ zones, who, it seems, have no path to returning to market rent any time soon...

 

[Nordkapp]

Have 2 properties let to Ukrainians which I intended to return to the main rental market with a reset rent. Won't be doing this now. Will advise them of my intention now and sell when they have sourced alternative accommodation.

Will that not put you in the small landlord category at that point?

My own situation is that I held onto my BTL due to the change in government, but now regretting not selling up.

Daft thing is that I raised the rent in February after years of not doing so, but indicating that I would be selling it in 2028. Again that plan is thwarted as effectively I cannot sell with tenants in situ for 6 years.

They are entitled to 227 days notice but in order to avoid being stuck in a 6 years cycle from March when is the latest date that notice of termination can issue?

Really hate this meddling by the government of the day in these areas, very hard to create and maintain any form of wealth in this country.

 

[Sarenco]

It seems fairly clear that the 6-year cycle will only apply to tenancies created after 1 March 2026 so is not relevant to your circumstances.

Having said that, I would keep a close eye on the draft legislation once published as this could change.

 

[letitroll]

I have an idea - if rents can only go up 2% p/a......wouldn't it be fair that if rents ever we're to start falling....that landlords like tenants are protected....and so they could only fall 2% p/a and reset to market every six?

 

[TomEdison]

I'm the tenant. If rents fall by 10%, and when rent review time comes around my landlord says "I'll only reduce the rent by 2%", I'll give notice and go and rent a similar property elsewhere at the market rent, which will be 10% below what I'm paying now. And the landlord can relet the property I'll have left, but he won't get more than the market rent for it.

Tl;dr: the law may have some success in requiring landlords to charge less than the market rent. But it won't be able to compel tenants to pay more than the market rent.

 

[letitroll]

I'll give notice and go and rent a similar property elsewhere at the market rent, which will be 10% below what I'm paying now.

Under my law you can’t do that…. Your old rent would follow you around (minus 2%) to your next rental.

But thank you for proving my point.

Intellectually people have no issue with rent controls….when the movement being controlled is upwards….why not downward?

 

[TomEdison]

Under my law you can’t do that…. Your old rent would follow you around (minus 2%) to your next rental.

I'm not sure how you're going to make a law like that work. Never mind whether it's desirable or justifiable; I don't think it's even possible.

But thank you for proving my point.

I'm not sure why you think I've proved your point. (To be honest, I'm not sure what your point is.)

Intellectually people have no issue with rent controls….when the movement being controlled is upwards….why not downward?

I think, because we don't see the landlord-tenant relationship as being a level playing field.

This isn't unusual. We don't see the employer-worker relationship as being a level playing field, for example, so we have unfair dismissal laws under which an employee can quit for any reason, but an employer can only terminate on limited, legally permissible grounds. Parents can withdraw their child from a school for any reason, but schools can only expel children for limited reasons, and/or after following certain processes. Etc, etc.

What these situations have in common is that, on one side, we have someone who relies on the relationship to access some fundamental need — a home, a job, an education — and on the other side we have someone whose interest in the relationship is primarily commercial (he wants to maximise his profit) and who generally has the greater economic muscle.

In circumstances like these, we tend not to leave the free market to operate. The stakes are too high for one party, and their bargaining position too vulnerable, for us to be comfortable with that. So we intervene through the law to put a finger on the scales, so to speak, to prevent them tilting more than a certain distance against that party.

You can argue about whether we ought to do this or whether, in a particular instance, we're doing it well or wisely. But if you ask why we do it at all, well, that's why.

 

[Bronte]

Excellent point there! Lets say that I am a large landlord so my 4 tenants have large landlord leases. I sell two of my properties? Do the tenants retain the large landlord leases even though I am no longer one. Likewise as a large landlord, I might sell one property to a single landlord with the tenant in situ. What is the status of that tenant. Or a married couple large landlord with 6 jointly owned properties might divorce and split the properties 50/50. What is the status of those tenancies?

And also, who keeps track of all this.

It is byzantine as another poster said - expect Residential Tenancies (Amendment) Acts No1, 2, 3 etc. as these questions turn up and have to be answered.

What if you die! What kind of leases exist then.

 

[faketales]

What I would also say on foot of this reform - is that its high time a genuine party of the right was formed in Ireland.....FF/FG have been co-opted by the left & made weak by a decade plus in Government

I think it is important to look at every thing from a political perspective.

The 6 year date is clearly to kick it into the next government.

The saying is the FFG are in government but SF are in power.

That FFG don’t really believe in these measures or previous ones but are under so much pressure from opposition they have to do something.

I some what agree but a good majority at the start of the government cycle is exactly the time to do what you want. The thing is I don’t think they have any real beliefs themselves. They are more political machines than parties with strong beliefs. Pros and cons of that.

 

[abracadabra]

Just wondering if a notice of termination in order to sell can be made right up to the time of this proposed legislation. Obviously it would take time to be declared valid, meaning termination would occur after the legislation was enacted. Maybe someone could enlighten me

 

[Capricorn 1]

The possibility of extending the rent pressure zone immediately to the whole country is being mooted in the Independent this morning. This is to stop any rent increases due up to 1 March 2026. My rental is in a non rent pressure zone and I am due to raise the rent on 1January 2026, 2 years after the last rent increase. If this comes to pass, I will issue a notice of termination immediately.