I just mention it because a solicitor I know said that is what he is doing if his current tenant doesnt move out when he wants his property back. Im sure it would be a real friend and they wouldnt actually move in there anyway. Its just to have the last tenant end the lease themselves. I dont know the legality of it myself. I wont need to do that myself. Just thought it was a good idea when I heard it.
New Residential Tenancies Bill
- Thread starter Greenbook
- Start date
We had an email today that tenants have given notice. It almost feels like we’ve won the lottery! Just 2 more to go now
Why? I'm not understanding what you expect to achieve here?
LarryScott
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The rule is that you can only reset to market if the last tenant leaves voluntarily, or due to tenant fault.
If you no-fault evict a tenant, then the rent for the next tenant has to be the same as the previous tenant's rent.
If a "friend" was to rent out the house for 1 month (at the low rent) and then leave voluntarily, it would mean that the most recent tenant left voluntarily and the rent for the next (non-friend) tenant could be raised to market.
In theory, it follows the rules, but the next tenant could easily raise a dispute with the RTB on the basis that the tenancy for the friend wasn't real. Even a completely neutral RTB could take issue with it on the basis that it was a sham tenancy.
But @JamieB_ in their post then advises owner to sell?
Property worth more vacant and without the rent locked.
I did point that out when discussing it but was asked what is a tenancy.
Ok, it would be vacant after 1st tenant left.
Achievable rent would only be of interest to investor.
So not sure its worth the hoop jumping.
But I understand yr point.
LarryScott
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Uh, that is a pretty horrible thing to do to the buyer. A BTL buyer could end up buying the house and then being burned when they set the rent to market for their first tenancy.
A BTL buyer is likely to require that the house is unencumbered for rental, but that won't help them with their new tenant if the seller gave a technical truth.
In practice, a BTL buyer would be strongly recommended to verify that it was not-rented for at least 2 years. That is much safer, and you don't need to deal with the continuation of a previous tenancy that you have no documentation for.
It isn't like the seller would make that much more by doing it. The key is vacant possession. If you have vacant possession, you will get almost as much if you restrict your sale to just owner occupiers. Maybe you end up with slightly less bidders, but the owner occupiers are likely to be willing to pay more than the BTL anyway.
Just add it to all the other hoops I guess.
Wont be a problem for me as I will be selling once the council lease is up. I wont be having anything at all to do with the RTB. Its just what someone in that position told me they were going to do should they decide to sell. They have a timeline when they want to sell (based on the max age they want to be when they sell), so that was their way of ensuring they get full value for their property. One of several ideas that we discussed, which were all very interesting from someone who clearly has examined this as well as the possibly could have.
When I asked questions the gist of it was that a tenant is a tenant when they agree to rent from you and you register them with the RTB. And thinking about it some more, I can live in my own house Dublin and rent a place in Cork as a tenant. I can give notice any time I want whether I actually lived in the place or not. I might just stay the odd night for a party night
. Afterall I have exclusive use of the property for the period of time agreed on the lease as long as I pay the rent. I can leave early if i want. The RTB arent going to come after me for leaving early. They hardly would even if someone actually reported me to them for leaving early. Hell I could even stop paying the rent and I would still be a tenant. So the question of "What is a tenancy?" is a thinker there. There is no minimum duration for a tenancy.The idea of it was that it is always better to have a totally unencumbered property when it comes to putting it up for sale. The selling environment could change for the better or worse at any time.
Property is worth more vacant and may not be saleable at all with a tenant in place, so I'm not sure that the rent level is important for most properties. The market is owner occupiers, rent levels are irrelevant to them.
The few BTL buyers out there will be very careful. I'd imagine their solicitor will ask for copious information and proof as to the circumstances of the final tenancy and how it came to an end. Somebody in place for a month after a fault eviction would ring alarm bells.
If the selling environment gets worse, say a recession, especially with all the restrictions and risks, what remains of the BTL market will be hit earlier and worse than the owner occupier market. People have to buy houses to live in, BTL is an investment completing with all other types of investment and investors become very wary during recessions, cash is king etc. You bring up another important point, in a recession the chances of selling with a tenant in situ at any money will be even more reduced than they are now.
Well I do not understand how anyone can be mystified by the new Bill is not designed to make improvements or help solve the housing crisis the Bill is to protect tenants who finished up in private rental sector who should be housed by the state,
LarryScott
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Since there should be way more owner occupier sellers than sellers of vacant but formerly rented properties, the best plan for BTL buyers is to just ignore formerly rented properties entirely. It just makes things much less risky. Even ones empty for 2 years might be slightly risky, though they are probably OK.
Let owner occupier buyers buy the formerly rented properties. That is safe for the buyer.
| Dwelling for sale | Buyers |
| Former rented but vacant | Owner occupiers only |
| Owner occupied | Buy to let and owner occupiers |
| Rented with tenants in-situ | Specialist buy to let buyers |
The specialist BTL buyers will check all documentation like a hawk (and obviously bid much lower). They may just not exists in certain areas.
As pointed out before, one of the specialist BTL buyer strategies could be to "launder" houses to re-sell.
If a person buys a house with tenants in-situ, they can evict to sell/landlord move-in. Even if they buy from a large landlord, they still count as small landlords (as long as they stay below 4 tenancies).
At the most extreme, you could see a person making a tidy profit from this:
1. Buy a property with a rogue tenant very cheaply from a landlord desperate to sell
2. Evict the tenant via the RTB or by paying him off and move in yourself
3. Sell the property to an owner occupier at full market value
4. Repeat the exercise
I'm not advocating this by any means, but if you had cash and someone to stay with until you got possession, it's a reasonable enough scheme. I can see it being done.
LarryScott
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Right, that too. In fact, a professional reseller would probably be much less emotional about it.
The original owner may have refused to do the deal, in the end, due to emotions about not wanting the tenant to win (after years of a frustration filled process).
A professional reseller would just see it as a cost of doing business. They want to buy, then convince the tenant to leave as fast as possible, and then resell. The faster they can complete the process the shorter they have their capital tied up.
They could use the evict for landlord move-in NoT as the stick to convince them to accept the carrot and leave voluntarily.
Risky business though. I remember a lot of people got burned in the GFC when they were flipping houses. Things can change in a short time period and if your capital is stuck for any period of time when thing turn you are i deep trouble.
Yes, but if you can buy cheaply enough and get the tenant out cheaply enough as well, even if prices fall, you'll make a small profit or break even. A professional as well doing this will have a fair idea what is going on it in the market and if the news on the ground (as opposed to what is in the media) is becoming negative will pull back. What was going on during the GFC was madness. The people here will me much more focused and as @LarryScott says unemotional.
I can certainly see people doing this, not hordes, it will be a niche play as they're called.
I also think that some tenants will deliberately act the maggot so that the landlord will have to sell them the house on the cheap.
A permanent tenancy with a difficult tenant, say a record of RTB complaints and missed rent payments which are rectified quickly, will be unsaleable to anybody accept the tenant himself or one of the professional operators discussed in the earlier posts.
Most tenants are fine and wouldn't even think of this, but there are definitely some who will try this.
A permanent tenancy with a difficult tenant, say a record of RTB complaints and missed rent payments which are rectified quickly, will be unsaleable to anybody accept the tenant himself or one of the professional operators discussed in the earlier posts.
Most tenants are fine and wouldn't even think of this, but there are definitely some who will try this.
But its having the opposite effect, all the tenants being evicted as a result of the new laws.... I doubt they feel protected! They are trying to lock the landlords in to providing housing for tenants that as you say should be housed by the state...
Not just tenants. Councils will be getting cheap property on the back of this too.