Tenant gets refund of €12,000 in rent overcharged in RPZ

[Brendan Burgess]

Dublin landlord ordered to pay almost €12,000 to tenant after overcharging in rent pressure zone

Case of landlord hiking rent 90 per cent higher just one of 306 disputes lodged last year concerning rent reviews not being in line with rent pressure zones

www.irishtimes.com

It emerged that the landlord initially charged €700 per month for a tenancy which began in July 2015 before setting a rent that was more than 90 per cent higher, €1,350, for a subsequent tenancy which began in July 2018, the tribunal heard.

The second tenancy had commenced after the introduction of the relevant RPZ legislation, meaning rent could not have been increased from €700 by more than 4 per cent.
...

The tribunal report, published this month, found the appropriate rent should have been set at €840 per month. The landlord was ultimately ordered to pay the tenant €250 in damages and repay €11,654.09 in overcharged rent.

 

[Brendan Burgess]

It is well worth a landlord's while to charge a market rent and hope to get away with it. If you succeed you get €12,000 in extra rent. If you fail, you get fined €250.

Brendan

 

[Brendan Burgess]

The guy was a HAP tenant so not sure who gets the money.

Brendan

 

[jasdpace@gmail.]

It is well worth a landlord's while to charge a market rent and hope to get away with it. If you succeed you get €12,000 in extra rent. If you fail, you get fined €250.

I don't like that argument - you could say the same about shoplifting and a host of other illegal activities!

 

[Bronte]

And another reason not to have written leases:

The tenant gave evidence that the page containing relevant RPZ information within the lease agreement landlord had been left blank.

 

[Bronte]

The guy was a HAP tenant so not sure who gets the money.

In a HAP tenancy the council pays the rent directly to the landlord. And the tenant pays a small amount to the council. Basically the landlord has no contract with the council, the tenancy is directly landlord and tenant.

If the tenant stops paying his portion to the council the council will cut off the rent and the landlord might not know about it for months.

 

[Brendan Burgess]

I don't like that argument - you could say the same about shoplifting and a host of other illegal activities!

Just to be clear. I am not advocating it. I am just pointing out that there is little to be lost by trying it.

Maybe the sanction should be much higher. And it should be much higher for shoplifting as well.

Brendan

 

[Bronte]

The reporting in this case is woeful in the Irish Times. I have found the case. Looks to me like the article is based on a quick read of it.

(can't remember how to link it on here) DR1220-66967 TR0421-004906 5th April Tribunal.

What was happening was the tenant was paying €102.60 to HAP. Hap were paying the landlord €990 and 'on the side' the tenant was paying the landlord €410. Total to landlord was €1400.

A bigger question not covered is how a man assessed by HAP to pay only €102.60 was able to come up with an extra €410 - I won't make an opinion on that as Burgess doesn't want to be sued. One would 'hope' the relevant authorities are looking into that but my experience tells me otherwise.

But I will say this, any landlord doing side deals is pretty stupid because you leave yourself right open. I have had tenants wanting to muck about with HAP and I've always refused. No surprises that the 'smart' tenant stopped paying the €410, the minute he started looking for prior leases the landlord should have realised what a mess she had made for herself.

There is a glaring typo in the Tribunal order. Page 6. I wonder can the landlord use that to his legal advantage.

I don't like phrases like 'on the balance of probabilities'. Either it is or it isn't wrong. Legally.

On page 11 I see that the sum to the tenant is partly funded by HAP. Laughingly the Tribunal orders the landlord to pay the tenant and the tenant is then to discuss with HAP how much he owes them back. Instead the tribunal should have ordered HAP be paid first and then the tenant.

 

[Bronte]

Just to be clear. I am not advocating it. I am just pointing out that there is little to be lost by trying it.

Maybe the sanction should be much higher. And it should be much higher for shoplifting as well.

That landlord is paying dearly. They were not getting market rent, are penalised by the RPZ and that is why landlords do what this landlord did. I've no idea how widespread it is. Ever since RPZ has come in and indeed every single time the government interfers in the rental market there is the opposite effect to the one intended. The landlord who purchased from me and is going to renovate is aiming to go back to market rent by building a nonsense extension to suit the legislation on change of layout. I myself left the market due to RPZ, but will go back in at market rent, and meanwhile I'm close now to my 2 years empty on one property. Actively looking for properties not caught by RPZ. Very difficult to find and even though I'm willing to renovate to top spec it's not worth it.

The landlord has not just a solicitor but a barrister too. The whole point of the RTB was to do away with costly legal ventures, instead it's turned into another layer of court. The RTB is self justifying. Most of the cases are about rent arrears, every landlord will tell you one thing, you'll get no money from going to the RTB. The RTB refuse to fund court cases for landlords. It's a deliberate policy. RTB wants to justify it's existance and it's funded by landlords.

Having a look at the current tribunal case would do one's head in in the calculations of RPZ. Dealing with the RTB is one of the worst organisations I've ever dealt with.

 

[torblednam]

I don't like phrases like 'on the balance of probabilities'. Either it is or it isn't wrong. Legally.

Whether you like it or not the standard of proof, legally, in civil matters is "on the balance of probabilities" (as opposed to criminal proceedings, where the standard of proof is much higher; "beyond reasonable doubt").

This is why the determination needs to use the phrase "balance of probabilities", so that it is clear, legally, what standard of proof is being applied.

 

[torblednam]

There is a glaring typo in the Tribunal order. Page 6. I wonder can the landlord use that to his legal advantage.

That's not the order, it's the report, and while it is a bit of a clanger, it is quite clear what the finding is, who's to pay whom, and how much. And the order itself is quite clear.

 

[landlord]

If the tenant stops paying his portion to the council the council will cut off the rent and the landlord might not know about it for months.

Twice over the last few years my HAP tenant stopped paying their portion of the rent to the county Council and both times both myself and the tenant received letters warning that the rent to Landlord would be stopped if they tenant didn’t pay the arrears.

Regarding the timeframe when this payment to the landlord ceases things have improved….

Finally something that benefits landlords (RE HAP payments)

Many landlords, who have HAP tenants will have just received an email from HAP regarding the ending of the winter emergency period. However, it’s the two paragraphs underneath that interest me. Finally correcting a gross injustice against those landlords who have chosen to take on HAP tenants...

www.askaboutmoney.com

 

[Fortune]

It is well worth a landlord's while to charge a market rent and hope to get away with it. If you succeed you get €12,000 in extra rent. If you fail, you get fined €250.

Brendan

€250 borrowing costs on a loan of €12k for over 4 years. Not too bad.

 

[landlord]

A bigger question not covered is how a man assessed by HAP to pay only €102.60 was able to come up with an extra €410 - I won't make an opinion on that as Burgess doesn't want to be sued. One would 'hope' the relevant authorities are looking into that but my experience tells me otherwise.

But I will say this, any landlord doing side deals is pretty stupid because you leave yourself right open

This side deal as you call it is normal and legal practice. I have many properties with homeless HAP and HAP.
When letting a property to homeless HAP or HAP, the landlord sets the rent (limited by RPZ) and if the rent is more than the amount paid by HAP, the tenant decides if the want to pay the top up. All my homeless HAP and HAP tenants have jobs. However I guess they earn less than the threshold that would cancel their HAP payments.

 

[Bronte]

This side deal as you call it is normal and legal practice. I have many properties with homeless HAP and HAP.
When letting a property to homeless HAP or HAP, the landlord sets the rent (limited by RPZ) and if the rent is more than the amount paid by HAP, the tenant decides if the want to pay the top up. All my homeless HAP and HAP tenants have jobs. However I guess they earn less than the threshold that would cancel their HAP payments.

It may be normal but it’s illegal to charge more than the RPZ.

 

[Bronte]

Twice over the last few years my HAP tenant stopped paying their portion of the rent to the county Council and both times both myself and the tenant received letters warning that the rent to Landlord would be stopped if they tenant didn’t pay the arrears.

Regarding the timeframe when this payment to the landlord ceases things have improved….

Finally something that benefits landlords (RE HAP payments)

Many landlords, who have HAP tenants will have just received an email from HAP regarding the ending of the winter emergency period. However, it’s the two paragraphs underneath that interest me. Finally correcting a gross injustice against those landlords who have chosen to take on HAP tenants...

www.askaboutmoney.com

Yes it happened once to me. At that time they were slow to send the warning letters, but luckily we got it sorted. Otherwise it could get very messy. It’s good the HAP now recognise this and have a better system. And of course, despite the HAP being paid directly to the landlord, your tenancy is with the tenant and not the council. The one advantage is the tenants no longer get the money directly, so are less likely to be tempted not to pay a landlord. Another advantage for me was the tax deduction of 20%, so when doing tax returns you had that money pre payed.

 

[Bluecup]

All my homeless HAP and HAP tenants have jobs. However I guess they earn less than the threshold that would cancel their HAP payments.

I am sure I read elsewhere that once you are eligible for HAP, even if your financial circumstances improve, they will only reduce but not remove your HAP support.

Something about how removing HAP completely it would be a deterrent to people improving their circumstances.

 

[RonnieShinbal88]

The government is clearly using the rental legislation to reduce the cost of its housing obligations.
This case clearly shows how the state is saving money on HAP by controlling rents at half the market rate.
It's an obvious conflict of interest that the state is fixing prices in a market it is an active buyer in.

The endless delays in evicting tenants for non-payment is another example where the legislation is stalling/maximising the time that people, that often the state should be housing, are housed for free by private property owners while endless tribunals and court cases are dragged out.

 

[Magillagorilla]

It would be interesting to know if this landlord will be allowed to claim back the tax, prsi and usc paid on the excessive rent over the normal previous four years span.

 

[lff12]

It is well worth a landlord's while to charge a market rent and hope to get away with it. If you succeed you get €12,000 in extra rent. If you fail, you get fined €250.

Brendan

They were directed to repay the overcharged rent though. Which I assume would make a mess of their tax returns if already made.

But I agree in general, if the rent is increased, generally a subsequent new tenant will have no way of knowing what the original tenant was, especially if the landlord didn't register with RTB.

This is probably why there is a persistently high percentage of tenancies going unregistered and large numbers of "new" tenancies each year.