Landlords using 'constructive evictions' to reset rents to market

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Greenbook

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Irish Independent article here behind a paywall

We've heard of this before. When one tenant leaves in a flat with two tenants for example, landlords are refusing to let the remaining tenant bring in a new tenant. The new tenant must either pay the entire rent or leave ie. constructive eviction.

You can see why landlords are doing this, it ends a pre-March tenancy which could otherwise continue forever and brings the rent up to market when the brand new tenants move in.

Will this be the next thing to be effectively banned ie. a 'constructive' eviction is treated the same way as a no fault eviction and you can't increase to market for the new tenancy.

From memory, IRES Reit are being taken to the RTB by tenants over this issue.
 
Does this article discuss specific cases? To be fair, it's a bit rough on the remaining tenant to have to pay extra, and for this reason I think any judgement will be in favour of the tenant. But presumably it depends on the lease agreement (or it should do so). If both tenants had separate agreements it's different than if there is one agreement signed with two people. I suppose.
 
patfert1 said:
Does this article discuss specific cases? To be fair, it's a bit rough on the remaining tenant to have to pay extra, and for this reason I think any judgement will be in favour of the tenant. But presumably it depends on the lease agreement (or it should do so). If both tenants had separate agreements it's different than if there is one agreement signed with two people. I suppose.
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It is rough on the tenant, I agree. But we had one poster on here recently with a two bed in Cork, one tenant was paying €450 and the other tenant was paying €600. The second tenant left and the poster was wondering what the situation is. That €450 tenant is never going, he's been there for about 15 years already, This landlord will therefore never get an increase on his rent if he keeps allowing replacement tenants.

Also, we had many discussions here on how you work out when your 6 year term ends with tenants coming and going. I'm not sure that we came up with a definitive answer. It is much easier to keep track of that if you can end the tenancy cleanly because one tenant leaves and the other doesn't want to pay the full rent and leaves himself or the second tenant stays on alone paying the full rent himself and then leaves.

Landlords here spotted that the new rules would cause issues with house shares. We're seeing that now. Yet another unintended consequence because their impact wasn't thought throug properly by the designers.

Seperate agreements have, I think, been effectively banned. You're a large landlord if you have one 4 bed house and grant four seperate tenancies. I also don't think they are recognised by the RTB. It is one property, one tenancy.

You are right, though. This will end up being banned causing yet more complications.
 
Greenbook said:
You can see why landlords are doing this
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I’m wondering if anything similar happens in any other sector where there’s a joint contract eg. would it happen in a commercial lease or say it was a mortgage or joint loan, would a bank be happy to replace one borrower with another borrower selected by the customer?

How does it work in other sectors where joint contracts are in place, and the terms can’t be fulfilled by one side.
 
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patfert1 said:
it's a bit rough on the remaining tenant to have to pay extra
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TBF, renting here has been very laisez-faire for decades, tenants coming and going has always been facilitated by landlords. That wasn’t a problem when the typical residential lease was a fixed one year term and a rolling monthly term after that.

Now with 6 year cycles and possible unlimited tenancies, it should never come as a surprise to a share-tenant that if their co-signatory decides to move on, they are responsible for the full rent or the contract comes to an end. Their gripe is with their co-tenant who leaves them in the lurch, not the landlord who didn’t try to change the agreement in any way.

For sure if a landlord tried to change anything not legally permitted, the tenant would be justified in refusing and would have plenty of support from tenant advocacy groups and the RTB.

A lease is a two-way street. Many tenants don’t read the contract or possibly don’t fully understand the implications of what they’re signing. With the dice fully loaded in favour of tenants, imo landlords should insist that new tenants get independent legal advice on a lease T&Cs before they sign so there’s no misunderstandings later on.
 
This was inevitable under the new rules unfortunately. To be honest all they have succeeded in doing over the last few years is remove any kind of flexibility and leniency landlords can offer around rents and replacement tenants as it will just come back to bite them later on.
 
Daphne said:
This was inevitable under the new rules unfortunately.
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We're strapped into completely inflexible rules. As a result we now have to act inflexibly ourselves. That naturally results in cries of 'evil, greedy landlords'.

Aside from the rent setting, you do need the property to be completely free of tenants every number of years for a couple of months. The place will need repaintng, tatty furniture will have to be replaced etc. It is difficult to do that with tenants in situ.
 
Daphne said:
This was inevitable under the new rules unfortunately. To be honest all they have succeeded in doing over the last few years is remove any kind of flexibility and leniency landlords can offer around rents and replacement tenants as it will just come back to bite them later on.
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Exactly, no leeway offered at all now, its black and white from now on... unbelievable how the government have managed to achieve this, they havent improved anything, the crisis is worse now than anytime in the past, they are not addressing the issues... you couldnt make this stuff up lol
 
I'm quite sure Landlords will use "constructive evictions" in such situations. It isn't fair on the remaining tenant, and I doubt many landlords even want to be in this position, but the government have backed landlords into a corner. It will be more fuel on the fire to the claims of a "greedy landlord class".
 
patfert1 said:
I'm quite sure Landlords will use "constructive evictions" in such situations. It isn't fair on the remaining tenant, and I doubt many landlords even want to be in this position, but the government have backed landlords into a corner. It will be more fuel on the fire to the claims of a "greedy landlord class".
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It won't be seen of course that this is brought about solely by the new rules and that it is a reaction to the restrictions. Landlords for generations were quite happy to allow replacement tenants.
 
patfert1 said:
It isn't fair on the remaining tenant,
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That’s not the landlords fault though. We hear ‘buyer beware’ often enough, but in many tenancies the expectation is that the landlord will put the tenants interests first.

Colin4444 said:
The bank would treat the mortgage application like any other mortgage application!
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Agree. Should it not be the same for a tenancy if the parties to the lease have changed? If an existing tenant and a potential replacement are to be the new joint-occupants, is it not clearer for everyone if the previous lease ends and a completely new lease starts?
 
bipped said:
Should it not be the same for a tenancy if the parties to the lease have changed? If an existing tenant and a potential replacement are to be the new joint-occupants, is it not clearer for everyone if the previous lease ends and a completely new lease starts?
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Landlord signs a single lease agreement with Tenants A and B. Tenant B leaves and tenant A wants to replace her with Tenant C. Tenant A asks for the original lease agreement to be amended. The Landlord insists on a new lease agreement with A and C. He terminates the previous agreement and asks them to sign the new agreement, which they do, otherwise they would have nowhere to live.

Pre-March, the Landlord would not have been allowed to increase the rent. Post-March the landlord is now allowed to increase the rent for the new tenancy. He does this.

Next, Landlord informs the RTB that the existing tenancy registration has ended and registers a new tenancy.

Then, Tenant A complains to the RTB about the rent increase, claiming that the landlord refused to modify the previous lease and keep the original rent level, arguing that it is not a new tenancy but a continuation of the previous one.

Who do you think the RTB will side with? The new lease agreement may even be irrelevant in their eyes, they may decide it was not a new tenancy.
 
patfert1 said:
Who do you think the RTB will side with? The new lease agreement may even be irrelevant in their eyes, they may decide it was not a new tenancy.
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The RTB have stated that as long as at least one original tenant remains, the original lease remains in place. I'm assuming this has a legal basis, so in your scenario, the tenant would win hands down.

That is partly I think behind the recent spate of NoTs. Landlord has one long term tenant on a low rent. He was holding out for the end of the RPZs. That's not going to happen, so he decides to sell. The other tenants in the house may come and go, but that one tenant will remain so the original lease will always be in place and the rent can never increase beyond 2%. I'd think that this is a common enough situation.
 
I would think that so long as one original tenant remains, the original lease remains. This has always been my experience.
So long as the full rent is paid and the tenant is not a problem type of person, the landlord would ordinarily trust their judgement on sourcing others to take the newly vacated rooms.
 
jman0war said:
I would think that so long as one original tenant remains, the original lease remains. This has always been my experience.
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I think that is the legal position as well, it is likely somewhere in the huge consolidated Residential Tenancies Act

jman0war said:
So long as the full rent is paid and the tenant is not a problem type of person, the landlord would ordinarily trust their judgement on sourcing others to take the newly vacated rooms.
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That was always the case as well. The remaining tenant or tenants would source a replacement. The landlord might do some vetting, but if the existing tenants were reliable and knew the new person, that would often be that. That system doesn't fit with the new rules for various reasons, hence the problems we're starting to see this now.

It would not surprise me if the 2027 Residential Tenancies Act allows tenants to pick the replacement (landlords will have a theoretical right of reasonable refusal) combined with a Right to Buy.
 
Actually the RTB is pretty clear on the scenario I described. https://rtb.ie/renting/rental-law-changes-from-1-march-2 end of page.
Whether or not there is a new lease agreement would appear to be irrelevant.

Under the Residential Tenancies Act 2004 (as amended), a landlord can only grant one lease or tenancy over a self-contained dwelling at one time. Where one tenant leaves and is replaced by another tenant, the new tenant joins the existing tenancy. After six months, the new tenant will gain security of tenure rights under Part 4 of the Residential Tenancies Act.

A new tenancy can only begin in the dwelling once all tenants that were party to the existing tenancy, and that had acquired Part 4 rights, have left. Until then, all tenants in the tenancy remain subject to the rules that apply based on the date that the tenancy began, rather than the date that the tenant joined the tenancy.

A tenancy that started before 1st March 2026 will continue to be governed under previous security of tenure rules until a new tenancy begins. The rent for this tenancy will also remain subject to a cap on annual rent increases of 2% or inflation, whichever is lower. Re-setting to market rent is not allowed for a tenancy created before 1st March 2026 for as long as the original tenancy continues.
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patfert1 said:
Whether or not there is a new lease agreement would appear to be irrelevant.
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Thanks @patfert1, that was my understanding as well.

So a landlord grants a lease to tenants A, B and C. 20 years later, there have been 100 tenants through the property but tenant A remains. If that was a pre-March lease, the rent remains as what it was 20 years ago plus 2% max pa. That can happen. You can have tenant who through choice or necessity stays forever.
 
Greenbook said:
So a landlord grants a lease to tenants A, B and C. 20 years later, there have been 100 tenants through the property but tenant A remains. If that was a pre-March lease, the rent remains as what it was 20 years ago plus 2% max pa. That can happen. You can have tenant who through choice or necessity stays forever.
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Indeed. By the RTB rules, if tenant A and B take the lease, after 2 years tenant C replaces B, then 10 years later, A moves out, then the landlord can also put out C who has been there 8 years and/or let them stay but with a new tenancy and significantly increased rent. If C complains to the RTB, I wonder what would happen...
 
Indeed. By the RTB rules, if tenant A and B take the lease, after 2 years tenant C replaces B, then 10 years later, A moves out..

Probably depends, did tenant C sign the lease?
If not, then I expect the original lease is over after the original signees exit.
 
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