Key Post What are the additional restrictions for individuals with a few properties but 4 or more?

Brendan Burgess

Brendan Burgess

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I understand why institutional landlords might be treated differently.

But what about a person with half a dozen properties? They will be classified as big landlords.

What are the additional restrictions facing them?

They will not be able to terminate leases at any time for any reason other than non-payment of rent.

So if they want to sell the property, they will not be able to terminate the tenancy. They must sell the property with the tenant in-situ.

If they want one of their properties back for a family member, they won't be able to get it back.

If they go to work abroad and want to rent out their home, they may never get it back.

Caveat: Some believe that if you have 4 or more properties before the new legislation comes into effect, those tenancies will not be covered by the "large landlord" rules. If this is correct, your rights as a landlord to sell the property will not be impacted. But if you let the property again after 1 March 2026, you will be a large landlord for that tenancy.
 
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Unfortunately I now come into this category as being classified as a big Landlord with more than 3 properties as one is divided into apartments.
All this new legislation is a lot to understand but my gut feeling right now is that I should serve 180 days notice on all properties and sell up when vacated (unfortunately leaving 16 people without homes including a special needs child).
All of these tenancies bar 1 have commenced before June 2022 but I now think this will be my only option going forward to sell with vacant possession.

What I am concerned about is do I have to then have each house sold within 9 months or just on the market.
I think many Landlords will also now try to sell up so there may be a glut of property on the market and no investors interested.
Anyone know when this legislation will be signed into law so we can read the finer print.
I would appreciate people's thoughts on the above before commencing with termination notices
 
Meath Lady said:
Unfortunately I now come into this category as being classified as a big Landlord with more than 3 properties as one is divided into apartments.
All this new legislation is a lot to understand but my gut feeling right now is that I should serve 180 days notice on all properties and sell up when vacated (unfortunately leaving 16 people without homes including a special needs child).
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Well, no, if you want to not be a big landlord, all you need to is dispose of all but your properties in excess of three. You can keep three of them, including the one that houses the special needs child.

And you don't necessarily have to sell them. Who were you planning on leaving them to? Is there scope here for a bit of estate planning, by transferring properties now to the next generation of your family? (And it wouldn't require you to give notice to the tenants; you could transfer subject to the tenancy.) Obviously that might not suit your circumstances or your objectives, but it's a course of action that might suit others in your position.
Meath Lady said:
What I am concerned about is do I have to then have each house sold within 9 months or just on the market.
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At worst, I think you just have to not have a tenant in it. And it may be sufficient to have a tenant in it, but to have served a valid notice of termination.
 
Has anyone seen anything in relation to the treatment of jointly owned properties and this classification? For example, an inherited house jointly owned by 4 siblings. Is that a property each or a quarter property?
 
I wouldn't be too worried about a glut in the market due to a lot of landlords selling and no-one interested. People are desperate for homes. I sold 2 rental properties in the last 2 years and both were sold to buyers for their own private use.
 
Brendan Burgess said:
It would make sense to change the definition to 11 or more.

Or better still scrap the proposal to limit a landlord's freedom to sell. That must be the biggest disincentive to investing.
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Seems to me that what they may be trying to do here is to foster/work towards a renting culture in which landlords can sell their interest subject to a subsisting tenancy, and this is normalised.

If they think a part of the solution to the housing crisis is normalising European-style long-term renting, and if they also want to professionalise the landlord side of the equation, then I think a market in which properties with subsisting tenancies can be traded is essential. If landlords can't realise their investment without evicting their tenants, then you can't have both commercially-driven landlording, and secure long-term tenure for tenants.

I think this is the reason for the small/large landlord distinction. The small landlord category is for people who have a spare property for whatever reason, and want to be able to let it while retaining the possibility of using it themselves or for family members; the large landlord category are for those who are commercial investors in residential property, who will operate professionally, and who will not require their properties for personal use.

There is no proposal to limit a landlord's freedom to sell. There is a proposal to limit a landlord's freedom to evict a tenant in order to sell, but thaty may make sense if it comes with an intention to facilitate the development of a market in which properties are sold with sitting tenants.
 
TomEdison said:
the large landlord category are for those who are commercial investors in residential property, who will operate professionally, and who will not require their properties for personal use.
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But we have plenty of cases where people invest in property with a view to having it available when their kids go to college. They can still do this, but they will have to make sure that they don't have 4 or more properties.
 
Bronte said:
This makes no sense because if she or her estate is forced to sell with tenants in situ it devalues the property.
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I'm suggesting that, if she thinks creatively, she may find that she's not forced to sell.

If the problem is that she has four or more properties, she could perhaps fix that problem by transferring some of her properties to other family members — family members who, perhaps, are expected to inherit the properties in due course anyway.
 
I have more than 3 properties and am in the same boat as Meath Lady.
Brendan Burgess said:
They will not be able to terminate leases at any time for any reason other than non-payment of rent.
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I believe this is incorrect. Or at least incomplete.
Meath Lady. Unless I have misunderstood but according to Sarencos posts in another thread, with your current tenants and current rental contracts in place your are free to evict these tenants, in 5, 10 or 20 years time, according to the existing rules (for example for a family member to move in).

If the tenants move out and new tenants move in before March 1st 2026, the paragraph above is still applicable.

HOWEVER IF NEW TENANTS MOVE IN AND CONTRACTS ARE SIGNED AFTER MARCH 1st 2026 then you can only sell with tenants in place.

The important thing here is landlords like myself and Meath lady have time !!! We are currently safe with our existing tenants in place (who probably won’t move out for a considerable amount of time as there is no where for them to go).

I am hoping this info is correct and someone can confirm it. Thanks.
 
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Now I think Lorcan Sirr might have the new rules a little wrong here (I'm not criticising him for that, it's very unclear), but if rents have jumped in 6 year's time, this type of thing will be all over the airwaves and the increases will be 'postponed'. Think about it, if your tenant has been paying €1500 plus 2% max for 6 years, and they are then told that the rent is increasing by €600 (the sub-inflationary previous increases will make big jumps likely to happen), they will fight it tooth and nail, and who can blame them. Their lifestyle has been based on this rent for the past 6 years. They won't accept handing over an extra €600 just like that, and again who can blame them.

Lorcan Sirr
 
Sister Sara said:
The focus rather should be on providing long-term, secure accommodation for their tenants in exchange for rent.
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I would be delighted to do this and I did this in the past! But the constantly changing rules are making it impossible.

I moved to short-term tenants a number of years ago. Not because I'm anxious to evict and sell, but because the situation was becoming so risky that I had to make sure I had an exit. Those risks have now materialised in full and as my short-term tenants leave, I will be exiting.

The fixation here on evicting isn't because we're mad to evict, I think it is fear of being trapped in the following situation which I've outlined a number times:

1. Long, long term tenancy (possibly multi-generational)
2. No real rent increases, 2% rent increases max when inflation is higher ie. the rent is in reality falling
3. On the hook for all repairs, maintenance, refurbishment and improvements.

That is not an investment. That is a liability. The landlord has stepped into the role of the State and is providing life long subsidised accommodation to a tenant.

The risks of trapping yourself as a landlord in a situation like this have massively increased. That is the only reason why I come across as being obsessed with evicting tenants, it is to protect myself from this and not impose this situation on my wife and family after I am gone.
 
Greenbook said:
if your tenant has been paying €1500 plus 2% max for 6 years, and they are then told that the rent is increasing by €600
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A reset to market rates after 6 years will likely mean a bigger jump than 2% but I doubt we're talking €600 in most cases. You can cherry pick examples of that but I don't think that represents the reality of many landlords.

But yes there is the chance that tenants will refuse to pay a big increase and the PRTB won't stand in their way of fighting it for a year or two, while they refuse to pay rent entirely, before they can be replaced.
 
CharlieMac said:
A reset to market rates after 6 years will likely mean a bigger jump than 2% but I doubt we're talking €600 in most cases. You can cherry pick examples of that but I don't think that represents the reality of many landlords.
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Very possibly, but no one likes a hike in their expenses, so even if it is a 10% increase on rent of €1,500 there will be complaints aided by the charities, NGOs and academics. Very attractive for the government of the day to 'postpone' or cap the increases. If you are entering into a lease after March, I just wouldn't be thinking I'm guaranteed to get market value rent in 6 years time. However, if market rents have fallen (not likely but not impossible either, it has happened in the past), you can bet that will be passed on to the landlord and if you have a permanent tenant you'll just have to swallow it.
 
landlord said:
according to Sarencos posts in another thread, with your current tenants and current rental contracts in place your are free to evict these tenants, in 5, 10 or 20 years time, according to the existing rules
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I will amend the original post to reflect this viewpoint. It's very uncertain, but I don't see where it is proposed that existing large landlords will continue to operate as small landlords.
 
I have moved the discussion on the valuation of tenanted properties to a separate thread

It will be very difficult for large landlords to find buyers for properties with tenants in situ

There is no proposal to limit a landlord's freedom to sell. There is a proposal to limit a landlord's freedom to evict a tenant in order to sell, but thaty may make sense if it comes with an intention to facilitate the development of a market in which properties are sold with sitting tenants...
www.askaboutmoney.com
 
As the other thread was closed by Brendon, I wanted to repost information from that thread here which is critical to large landlords like myself decision-making regarding whether to sell properties immediately or wait. This post will also have a significant impact on the value of that rental property at point of sale.

Unless I have misunderstood and according to Sarencos posts in another thread, for large landlords, with your current tenants and current rental contracts in place your are free to evict these tenants, in 5, 10 or 20 years time, according to the existing rules (for example for a family member to move in).

If the tenants move out and new tenants move in before March 1st 2026, the paragraph above is still applicable.

HOWEVER IF NEW TENANTS MOVE IN AND CONTRACTS ARE SIGNED AFTER MARCH 1st 2026 then you can only sell with tenants in situ.

The important thing here is landlords like myself and have time !!! We are currently safe with our existing tenants/contracts in place (who probably won’t move out for a considerable amount of time as there is no where for them to go).

I am hoping this info is correct and someone can confirm it. Thanks.
 
This is not the first time that Ireland has gone through this.
The Rent Restriction Act was introduced after the second world war for 6 months. It remained in place until 1960.
In 1980 a group of Landlords challenged this. It was deemed to be unconstatutional. The Act could not be changed retrospectively. Those who had homes under the original terms had them for life.
 
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