Landlords using 'constructive evictions' to reset rents to market

[Greenbook]

Just reading this decision now. It shows the mess a landlord can get in to with replacement tenants, and this is IRES Reit who have a whole infrastructure and top notch legal advice to deal with all this.

From the Tribunal Report

She stated that at this point Tenant B had been in the dwelling for over three months and it was evident that the relationship between the Tenant and Tenant B had started to breakdown and this was not helped by the fact that the Tenant gave a verbal notice of termination to Tenant B to vacate by the 30 May, 2024. She stated that the Tenant now wants to retrospectively claim that Tenants B and J were licensees, who she had given permission to live in the dwelling.

This is also the second Tribunal case involving these tenants.

Also Threshold's argument, which the Tribunal appears to have accepted - so if you accept separate rent, you have now created individual tenancies. Could this make you a large landlord?

Mr. Kane stated that when the Landlord arranged with B and J to collect rent separately from May2024 onward, the tenancy could no longer be considered a joint tenancy. He stated that pursuant tothe lease the Tenant was responsible for paying the rent to the Landlord, as head tenant. He submitted that once the Landlord accepted rent individually from each tenant, the nature of the lease changed and separate tenancies were created for each tenant and the joint and several clause no longer applied.

 

[Premos]

He submitted that once the Landlord accepted rent individually from each tenant, the nature of the lease changed and separate tenancies were created for each tenant and the joint and several clause no longer applied.

Just keep on giving... I currently have tenants that pay separately, they never asked, they just did... I only ever stated to them the full amount. But indirectly, I created several tenancies.... So what happens if only one pays, if we follow the same logic, there's no joint tenancy and the second tenant is just a licencee paying the first renter? I thought I read somewhere that with the new rules there could only be one tenancy per accommodation.

 

[Greenbook]

I thought I read somewhere that with the new rules there could only be one tenancy per accommodation.

Same here, but now it appears not to be the case, or maybe you can create multiple tenancies if it is pre-March. Honestly, who knows at this stage.

 

[stormy]

Based on the Tribunal decision, if A challenged me on that, I would lose. He doesn't have to pay the entire rent as I have prevented him from replacing B. Is that correct?

Yes

In scenario (b), the big loser is the private "large landlord" with a number of properties (>3) rented out to house sharers.

Exactly

Mr. Kane stated that when the Landlord arranged with B and J to collect rent separately from May2024 onward, the tenancy could no longer be considered a joint tenancy. He stated that pursuant tothe lease the Tenant was responsible for paying the rent to the Landlord, as head tenant. He submitted that once the Landlord accepted rent individually from each tenant, the nature of the lease changed and separate tenancies were created for each tenant and the joint and several clause no longer applied.

That's Threshold's submission but at least not what the Tribunal found.

Mr Kane argued that once IRES took rent individually from each tenant, the joint tenancy dissolved into separate tenancies and the joint-and-several clause fell away. But the Tribunal didn't accept that. It held it remained one tenancy - the change in how rent was collected didn't sever one dwelling into multiple tenancies. If the Tribunal had accepted Kane's argument, A wouldn't have been jointly and severally liable at all - but it treated her as liable in principle and then only relieved her of the vacancy arrears because IRES withheld the keys.

This is also the second Tribunal case involving these tenants.

Were you able to find the first tribunal report out of interest? It doesn't seem to be published?

I thought I read somewhere that with the new rules there could only be one tenancy per accommodation.

Both new and old rules state this, and the tribunal (by my reading) did hold on that point.

"...the change in the how the rent was paid in May 2024 did not alter the agreement between the parties or the nature of the tenancy. In accordance with paragraph 4.6 of the Tenancy agreement the Tenant remained joint and severally liable for the rent arrears in relation to the tenancy"



In any case, it is a mess. The fact that IRES - with in-house legal and full infrastructure - still walked into an invalid notice is the real story. It tells you how unworkable the one tenancy/replacement regime is.

 

[Greenbook]

In any case, it is a mess. The fact that IRES - with in-house legal and full infrastructure - still walked into an invalid notice is the real story. It tells you how unworkable the one tenancy/replacement regime is.

Exactly. Posters here spotted this from the start, I'm sure you were one of them @stormy, the new rules are fine in theory but don't work at all in reality. Most Irish tenancies are house shares with tenants coming and going.

The only safe way to operate going forward is:

1. One bed apartment or house rented to a single person or a couple
2. The tenants must be well off and mobile, so they'll buy their own house or move elsewhere.

Everything else, whether you are a large landlord or a small landlord is just too risky and complicated.

 

[LarryScott]

First: the rent wasn't due while the landlord disabled her ability to earn it. The "one dwelling, one tenancy / joint and several liability" rule everyone assumes is purely landlord friendly has a hard limit: yes, the remaining tenant is in principle liable for the whole rent - but not where the landlord's own actions prevent her from generating it from vacant bedrooms. IRES tried to turn co-tenant departures into a whole-house arrears termination.

I read the TR0001066 report, and a big question I would have is what did the lease say about sub-letting.

The report clearly stated that the lease was joint and several.

What it didn't say was what the rules were for sub-leasing. From the sounds of things, the expectation was that it was the tenant's responsibility to find new tenants.

The Tenant cannot be held liable for the outstanding arrears for the October/November 2024 period as the contract between the parties was effectively frustrated due to the Tenant inability to perform the obligation to rent the two other bedrooms so that the full monthly rent could be achieved.

I think perhaps the lease says that the tenant(s) has to find new tenants. The report uses the word "obligation".

Since it wasn't raised as an issue, by either party, I wonder if this ruling would apply to a case where the lease says there is no subletting (or licensees) allowed. The landlord will find new tenants.

The warning letter also appears to have gotten the amount owed wrong, which would probably kill the warning letter, and thus the NoT anyway.

The ruling seems to be

August 1st 2024:
No rent arrears (previous tribunal)

Oct/Nov 2024:
The two leaving tenants didn't pay their "share" and gave the keys to the landlord's agent

Jan 2025:
2 new tenants moved in
rent review applied

They ruled:
The rent review for January was valid and the landlord was owned back rent
The failure of the tenant to replace the two departing tenants in Oct/Nov was the landlord's fault and so no arrears were due

I don't think the technical joint and several issue really applied. It was that the tenants were entitled to get new tenants to replace the departing ones and the landlord made that impossible. This meant that the lost rent was the landlord's fault, so they were entitled to arrears.

There is an interesting section.

The Tenant was unable to rent the dwelling as she did not have keys for prospective tenants and communications between all the parties was poor or non-existent. The Landlord did not mitigate their loss in that they did not return the keys to the Tenant to enable the Tenant to fulfil her obligations to rent the former Tenant's rooms.

There was a breakdown in communication between the tenant and landlord. Therefore, it was the landlord fault.

 

[Greenbook]

What it didn't say was what the rules were for sub-leasing. From the sounds of things, the expectation was that it was the tenant's responsibility to find new tenants.

As it is IRES Reit, it is hard to imagine that the lease didn't contain a prohibition on sub-letting. That is something an ordinary landlord might miss, but not a fund. The tenant hardly had carte blanche to sub-let to anybody she wanted to.

Also, IRES Reit are currently heading to the RTB with tenants challenging them for not allowing them to find new tenants. That lease must contain a prohibition on sub-letting and they must be using a standard lease.

It is hard to understand why the issue wasn't dealt with in the current case.

There was a breakdown in communication between the tenant and landlord. Therefore, it was the landlord fault.

It always is. It would be interesting to see in what percentage of cases does the landlord win outright. I'd say very few. The Tribunal always has to find something in favour of the tenant.

 

[Bronte]

Just keep on giving... I currently have tenants that pay separately, they never asked, they just did... I only ever stated to them the full amount. But indirectly, I created several tenancies.... So what happens if only one pays, if we follow the same logic, there's no joint tenancy and the second tenant is just a licencee paying the first renter? I thought I read somewhere that with the new rules there could only be one tenancy per accommodation.

Personally don't understand the rent being paid separately for one tenancy. But it's one tenancy all the same, as you only have one registration with the RTB. Let's see what the RTB says:

There's a bit about tenants having to register a sublet, which the head tenant must do. What happens if the tenant does not do this, and can the landlord object.

 

[Greenbook]

There's a bit about tenants having to register a sublet, which the head tenant must do. What happens if the tenant does not do this, and can the landlord object.

With the rent controls, there is sub-letting by tenants. The landlord is told, but the head tenants charges in excess of the RPZ rate and pockets the difference. You can bet these sub-lets are never registered and the RTB never pursues this even though it is a real problem. I had an experience of this myself and moved to separate leases and separate payments because of it.

 

[Bronte]

You can bet these sub-lets are never registered and the RTB never pursues this even though it is a real problem. I had an experience of this myself and moved to separate leases and separate payments because of it.

But each property is one tenancy? You just have separate leases?

 

[Bronte]

the RTB never pursues this even though it is a real problem

As there has been a wide discussion on here I had a look at the RTB on subletting

Subletting and assignment - Residential Tenancies Board

rtb.ie

Seems to me

- head tenant can sublet, and is responsible for registration
- landlords has to give approval
- nothing happens if head tenant doesn't register the sub let
- because it's illegal, the RTB cannot deal with it (does this mean the landlord can evict the unregistered 'non tenant' with no come back from the RTB? )

 

[Greenbook]

But each property is one tenancy? You just have separate leases?

I know, but I decided going forward that I would rent to each room individually myself. There was an awful row when the sub-tenant found out what was happening, so I didn't want to go through that again.

 

[Greenbook]

- because it's illegal, the RTB cannot deal with it (does this mean the landlord can evict the unregistered 'non tenant' with no come back from the RTB? )

Incredible, it is a criminal offence for a landlord not to register.

If it is a tenant, who is in effect acting as a landlord, no criminal liability and the landlord must sort it out via the court system presumably.

Likewise, overcharging tenants in breach of rent controls is common in sub-letting situations. If a landlord breaches the rent control rules compensation, repayments to tenants and criminal liability.

If a tenant breaches the rent control rules, nothing happens via the RPZ, any issues with the sub-tenant because they overpaid is for the landlord to sort out.

You could not make this stuff up.

 

[stormy]

overcharging tenants in breach of rent controls is common in sub-letting situations

It's even worse. They can charge whatever they want, there is no legal cap on market rate as it's not a tenancy. In addition, if under 14k, it's tax free for the head tenant as it qualifies under the rent a room scheme.

 

[Bronte]

I know, but I decided going forward that I would rent to each room individually myself. There was an awful row when the sub-tenant found out what was happening, so I didn't want to go through that again.

So the Head Tenant overcharged on RPZ to the subtenant. The subtenant was never vetted by you. Not agreed by you. And the subtenant was raging. Have I got that right? So now you tell each tenant how much they each pay per room. But it's one tenancy.

The beauty is the sub tenant who over paid on the RPZ to the Head Tenant cannot sue the Head Tenant or you? Mad stuff.

 

[Bronte]

In addition, if under 14k, it's tax free for the head tenant as it qualifies under the rent a room scheme.

Are you sure about this? Surely you have to be an owner occupier for that scheme.

Edit: you are correct

 

[Greenbook]

So the Head Tenant overcharged on RPZ to the subtenant. The subtenant was never vetted by you. Not agreed by you. And the subtenant was raging. Have I got that right? So now you tell each tenant how much they each pay per room. But it's one tenancy.

Sub-tenant was recommended by the head-tenant. I vetted the sub-tenant (previous landlord and employer references). The lease plus a copy was given to the head-tenant for the new tenant to sign and I got it back signed. That may have been a forgery or perhaps the new tenant wasn't shown the full lease. The head tenant continued to pay the full RPZ rate. What was actually happening was only discovered by accident later.

And yes, I was way too trusting of my lovely head-tenant.

 

[polecon]

Incredible, it is a criminal offence for a landlord not to register.

If it is a tenant, who is in effect acting as a landlord, no criminal liability and the landlord must sort it out via the court system presumably.

Likewise, overcharging tenants in breach of rent controls is common in sub-letting situations. If a landlord breaches the rent control rules compensation, repayments to tenants and criminal liability.

If a tenant breaches the rent control rules, nothing happens via the RPZ, any issues with the sub-tenant because they overpaid is for the landlord to sort out.

You could not make this stuff up.

The landlord who is renting the place from the owner is the right sort of person, someone striving to do the best for themselves, someone broadly presumed to be honest and trying to use common sense to utilise available accommodation. The state needs to stay out of the way for these people. We want to help these people. They are worthwhile people. Our people.

The owner is effectively landed gentry neoliberal rentier scum, and all right thinking people understand they have more than they need and it is any just society's duty to redistribute any power and wealth that they have. They need to be taught a lesson. Have manners put on them.

This is what happens when one group in society is subjected to demonisation for a decade and doesn't engage in the PR battle.

 

[Greenbook]

Are you sure about this? Surely you have to be an owner occupier for that scheme.

Plus they get the rent credit as well!

And the RTB has no powers at all to investigate this.

Possibly the landlord is liable for allowing the RPZ rules to be breached, something I was worried about when I had the over charging head tenant.

 

[stormy]

Plus they get the rent credit as well

Exactly! A tenant couple would get €2000 tax credit and no need for any tax clearance certificate or any clawback period!

A property owner would only get 600 (less if they partially own it), would need to have a valid tax clearance certificate and is subject to having it RTB registered and subject to a multi year clawback.

It's truly a joke.