Renting affordable housing

[yellowroses]

My friend is renting a house privately which his landlord bought under the affordable housing scheme. I always thought this wasnt allowed. Can my friend be made leave the house or what penalties are there for the landlord? Thanks

 

[stonecoldk]

Depends which county council, Fingal allows the AH to be rented out.


I can't see your firend being turfed out, once the mortgage is being paid, the county council won't care.

 

[zen]

@Yellow Roses-There’s a big difference between; not allowed, breach of contract and illegal.

Contrary to what stonecoldk stated, once you breech ANY contract it becomes null and void and gives the drawer of the contract full discretion of what to do. I have asked the council what the penalty for breach of contract was but they never answered this. So, given my experience with them I reckon they'll make Satan look like an arch angel if you do. It’s always "just business".

You’re not allowed to lease out Affordable Homes, period. It’s a government scheme partially financed by the tax payer through the HFA.



I'd understand this under normal economic times but we are in an economic nightmare situation where the policy is "just don’t tell them anything". This scheme is rotting to the core and destroying families.

However this is completely an arbitrary decision by the council(s) and I'll take it at face value that there has been amendments to Fingals existing contracts as mentioned by Stonecoldk. I personally have been told by DCC that they are just "agents" to the state and cannot permit it. So how can Fingal Co Council make exceptions...!?!?



I'd love to hear more from anyone who was given explicit permission from Fingal Co Council to lease out their unit, what guise it came under and what are the reviewed T&C's.

In saying that, it is true that the councils are knowingly, deliberately and conveniently (for them) turning a blind eye to people leasing out they AH homes as mentioned as long as the money is coming in.

However if, the economy recovers they will come hunting for those who breeched their contract and will have full discretion on what to do with those who did lease their units. I have them recorded saying they will turn a blind eye but they cant give it to me in writing. May not be valid in court but in the public arena it will demonstrate what kind of beast your dealing with.

How will they know your leasing it out?

a)someone could report you, simple

b) anti-social behaviour

c) The Revenue Commissioiners, which I'll explain now:-

Any informed Tenant will look for a number of things before renting or signing a contract; a BER cert and confirmation that the "Landlord" is registered with the PRTB. This gives the Tenant protection by legislation. This is important to note.

It is for this reason that the councils won’t allow leasing. (but it can be changed)

For instance, if a tenant falls behind on the rent the landlord cannot just throw them out (especially a family unit due to the constitution), thus, no rent to the landlord means no mortgage payments to the council. The council would also not have authority to throw out a 3rd party renter...this is the biggie.

Since the AH scheme stipulates that it must be your PPR you are entitled to TRS. This will raise a huge flag with the Revenue when they see TRS on what will actually become an "Investment Property" which does not qualify for TRS (and breaches the AH scheme T&Cs). i.e. a property registered with the PRTB and claiming TRS..... And the council will be privy to this info at the revenue. Especially at your final mortgage payment.... youve been warned.


So in a nutshell

Given your place will have most likely have lost 50% (70% in my case) of its value you will be effectively working ILLEGALLY for the state, FREE OF CHARGE, and if you get caught working for them, you will pay the price, they get the asset and all funds. You will also be landed with the legal bill that dragged your sorry backside to court.

Great isn't it

I'm not advocating it but I have been on mortgage strike for 2 years now and they still haven't repossessed my unit, I think they know there is something wrong/unconstitutional or even morally wrong with this contract/scheme.



My Conclusion


I think that they are not prepared to make adjustments to the scheme be it on letting or anywhere else as its already a nightmare. Most councils dont even have the money or resources to take people to court!! I think they want the changes to be made from the bottom, i.e. by the people, through the legal channels, these are civil servants dont forget, they'll be paid weather they work or not..... dont see that happening anytime soon.



Take a mozie down to the High Courts twice per week and watch people being made bankrupt and others loosing their homes.


This is us, the regular people being held accountable on so many levels for the mistakes of bankers, property devolpers and politicians.


NONE OF THIS IS ON THE MAINSTREAM MEDIA. This is the Just dont tell them anything policy.




Shamed to call myself Irish.

 

[Brooklyn]

Contrary to what stonecoldk stated, once you breech ANY contract it becomes null and void and gives the drawer of the contract full discretion of what to do.

That is factually incorrect. You're still under contract, and the Council can if it wishes seek a court order compelling you to abide by the contracts terms. It can also choose to ignore the breach, and that's what most of them seem to be doing now - as long as you're abiding by what they consider the more important term i.e. paying off your mortgage.

DCC's official position is that you can rent out if your mortgage is with a bank, but not if it's with them, because they can't be sure where to go after you if you don't pay your mortgage.

Fingal's policy and T&Cs are on its website.

 

[Cheeus]

I don't have my contract to hand, but from memory the way it works is that clawback will apply for 20 years. If you rent out your place, the period for which clawback applies will be extended by the number of years you've rented out. My memory is also that clawback reduces by 10% a year from year 10 of living in your affordable home? I never hear mention of this, is it correct? I think there's actually very little in the contracts about this, it all comes to legislation. But it's what we were told at the time.

TRS issues are different and of course you'd need everything to be above board with revenue. As long as clawback is extended for people who rent out, there will be no profiteering for owners of affordable housing. You own the property, your mortgage is with the bank. I can't see how the council could force a sale, or if they eventually did I can't see how they could take anything more than the clawback is due them.

 

[Brooklyn]

I don't have my contract to hand, but from memory the way it works is that clawback will apply for 20 years. If you rent out your place, the period for which clawback applies will be extended by the number of years you've rented out. My memory is also that clawback reduces by 10% a year from year 10 of living in your affordable home? I never hear mention of this, is it correct? I think there's actually very little in the contracts about this, it all comes to legislation. But it's what we were told at the time.

No, the contracts say simply that you have to maintain the home as your principal residence. It follows from that that you are not allowed rent it out. I think that during the boom years some councils may have adopted informal policies to deal with people who rented out their properties, such as making them pay back the clawback and perhaps also extending the clawback out. This may have been presented to people as what the Council would be willing to accept in order to avoid litigation for breach of contract. But the formal contractual position remains that you can't rent out, full stop.

 

[zen]

@Brooklin, I disagree and am a little confused.

Your saying if you breach ANY contract the ONLY thing one can "choose" to do is bring you to court to honour the original terms and conditions? I dont think so, they can tear up the agreement?

The council also told me that “technically” they could also make you pay the original market value of the house/apartment... that’s something to think about. That’s even before the Revenue get wind of what you may have been doing.

So can they choose to blatantly not tell you what they selectively choose to ignore...? I don’t see that written anywhere. Explicit consent should be given. You may be (not deliberately) misleading people into believing that the council can choose to turn a blind eye and there will be no ramifications in the future.

So I'm very confused with the bendy/greysih approach in your first response compared to the second statement "the formal contractual position remains that you can't rent out, full stop".

Lets not digress, AH is supposed to be your PPR the councils cannot selectively choose to ignore this, so how can you lease out your PPR, it immediately becomes an investment property no?

Paper does not refuse ink. If you sign a contract with explicit T&Cs then that’s the agreement, not a partial agreement "just pay the mortgage". This is what gives a contracts it’s power. Otherwise what’s the point of a contract!!! I don’t see any grey areas in contract law. It’s also why the law is an ass. However amendments can be and should be made through negations and compromises, again, given the circumstances we are ALL in.

And this, my fellow askaboutmoney blogger is what is at the root of it all. Lenders are not talking to borrowers and are in absolute denial of any risk.


As I said before, no co-responsiblity.


Recession, what recession?

 

[Brooklyn]

Your saying if you breach ANY contract the ONLY thing one can "choose" to do is bring you to court to honour the original terms and conditions? I dont think so, they can tear up the agreement?

No, that's not what I said. I said that was an option. Terminating the contract is also an option if the breach is serious enough, but it doesn't happen automatically as you suggested.

The council also told me that “technically” they could also make you pay the original market value of the house/apartment

Unless that's in your contract, they couldn't do that without an order of the court.

So I'm very confused with the bendy/greysih approach in your first response compared to the second statement "the formal contractual position remains that you can't rent out, full stop".

I don't see why it's so confusing. With Fingal, if they allow you to rent it out you are signing an additional contract that modifies the first. Under the "blind eye" approach, you're still formally bound by the original terms. It's possible that the Council's acquiescence to your breach of the principal residence term could be viewed by a court as acceptance of a change to the terms, but that hasn't been tested AFAIK. So there is an element of "at your own risk" if you don't get the Council's written agreement to let you rent out. But the last thing the councils want is to get in litigation with their AH purchasers which is (I assume) why people who rented out in the past were given options like "pay us back the clawback and we won't take to court to enforce that term". It's effectively an out-of-court settlement for damages.

 

[zen]

Fair points Brooklyn, so it basically boils down to its not a crime unless you get caught

"With Fingal, if they allow you to rent it out you are signing an additional contract that modifies the first".

Is this true with FCC?! I'm absolutely baffled now but not surprised. How can councils act independently on a state ran scheme with universal T&Cs? Each time I speak to DCC they say they are just "agents" to the state and in order to permit the like, amendments must be made at a legislative level.

I was a director in our complex and Repo is rampant. The councils are gettling landed with these units that and are setting them aside for social housing and will also have to pay the management fees on the reposessed units. Makes no sense to me but there is obviously a reason for it.

Anyway, I dont think this thread can do anymore for this subject. Thanks for your feedback!

 

[Brooklyn]

How can councils act independently on a state ran scheme with universal T&Cs?

That's a good question and one I can't really answer. Only thing I can think of is that the Department of the Environment is also turning a blind eye.

 

[superfan]

How can councils act independently on a state ran scheme with universal T&Cs?

that's the million dollar question zen and one i've tried to get an answer to but failed.
i had to start renting my AH out a few years ago because i could no longer afford to pay my mortgage.
registered with PRTB,cancelled my TRS ages ago and pay income tax on my rental income so at this stage they have to know i'm renting it out. i've no idea if i'll face a baclklash in the future but sure what other choice did i have?
while i was on the phone to them one day they actually told me that for some reason my TRS had been stopped and i'd need to get on to them to get it reinstated so they obviously check these things.

which is (I assume) why people who rented out in the past were given options like "pay us back the clawback and we won't take to court to enforce that term". It's effectively an out-of-court settlement for damages.

do you have any examples of this brooklyn?