What should a landlord with tenancy ending now, do?

Brendan Burgess

Brendan Burgess

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Am I right in saying that if they leave it empty, or rent it to Ukrainians, until 1 March, they can then charge what they like?

They might not like the new regime then - this minimum 6 years tenancy, but at least they will get market rent.

Brendan
 
Brendan Burgess said:
Am I right in saying that if they leave it empty, or rent it to Ukrainians, until 1 March, they can then charge what they like?
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Yes, I think that is right. If you enter into a new tenancy after 1 March you can charge market rent. The previous rent under the RPZs is irrelevant.

Keep in mind though you will have to front load it to an extent. If the tenant stays for 6 years, the increase is CPI or max 2% per year, so if there is high inflation you are still losing out. You reset to market rent at the end of the 6 year period, but if there is a Sinn Fein government, there is likely to be a rent freeze.

Long term tenants are a real disadvantage
 
Correct by artificially capping rent and implementing long rentals, landlords will try to solve this by asking for extremely high rent so the average over 6 years is acceptable.

Now there will come absolute uproar when the first rental prices start to appear.

Harris was asked if housing was an emergency and he said yes. He was asked would gov declare an emergency and he said no.

Perhaps brave leadership would be declaring an emergency and forcing all stakeholders to build a blank page solution. We seem totally incapable of getting out of this crisis by pulling individual levers in isolation without regard for the secondary implications
 
JoeRoberts said:
Especially as discussed on Rte this morning that new builds may now hold off coming to rental market until March
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I read the relevant date is today, for the commencement notices. Imagine you're a large builder in Dublin put in your commencement notices in the last couple of months.
 
Folks - I think the resetting of market rents for new tenancies on or after 1 March 2026 is being misinterpreted above and in much of the commentary I have read thus far. The government press release indicates that you can only reset at the end of the new 6 year lease…….not at the beginning of a new lease post 1 March 2026.

Excerpt from press release below (see end of paragraph):

“all landlords who have entered into a new tenancy arrangement on or after March 1st 2026 will have the right to reset rent where the rent is below market at the end of each six-year tenancy, ….”

If this is the case, then this represents a further shifting of rights/power from landlord to tenant…..on the promise of a higher rent from 2032 (at the earliest)….with the political uncertainty than comes with that!
 
…..which would also appear to be consistent with this legal view:

Residential Rental Sector Reforms: What’s Changing and Why It Matters

The Government’s much-anticipated proposals to reform the rules on rent and security of tenure in the residential tenancy sector were finally announced on 10 June. At a high level, there’s something for everyone. There is a relaxation of the rent control rules for new apartments and future...
www.mccannfitzgerald.com www.mccannfitzgerald.com
 
So to Brendan’s opening question, I don’t think they can charge market rent on 1 March 2026. But the right course of action may still be to avoid entering a new tenancy until 1 March (assuming they have discounted the option of selling now)….as at least that way, there is a (slim) chance of achieving market rent at some point thereafter.
 
But keep in mind that if you enter into a new tenancy post 1 March 2026 in the hope of achieving market rent at some point, if you are a large landlord you are granting forever tenancy to your tenant (if the tenant is permanent, you'll only ever sell to another landlord at a steep discount and are 100% 'trapped' if the tenant is difficult). If you are a small landlord and rent to a long term tenant you can't get possession back to sell etc. for 6 years and God only knows what the political landscape will be then.

Personally, I think the security of tenure issue is of far more importance than the rent increase aspect. I've been careful to avoid long term tenants for a while now due to the uncertainty. I would now never take a risk on anyone who in any way indicated that they might be very long term or permanent. In fact, I'll probably be exiting entirely. I think the risks have increased by an order of magnitude.
 
Look at it this way - if you are a large landlord especially and you grant a tenancy to a low income couple, you've created a life long tenancy. Where are they going to go? They can't afford to buy and have a low entitlement to social housing because they are housed. You've devalued your asset massively. It can only ever be sold to another landlord and who would buy? Where is your exit in all this?
 
Apologies for going on about this, but in the life long tenancy situation, as the property ages you'll have to carry out more and increasingly expensive upgrades and the inspection regime will force you to do this. You may even have to do energy efficiency upgrades. You can't avoid these as you can't sell. You may end up turning an asset into a liability as you'll be a long time recouping these costs from the rent.

The government had to go relatively easy on inspections up until now and the mooted requirement to bring rented properties up to a certain BER never went anywhere. The reason was landlords would sell if the costs were too high. That risk no longer applies to a large landlord with a permanent tenant and only applies to a small landlord every 6 years.

Plus tenant's children become tenants themselves when they reach 18 so you could end up becoming the landlord for a second generation.

Finally, even if you try to avoid this by taking only well-heeled mobile tenants, an economic downturn could mean that that tenant loses his job and you'll have them as tenants for far longer than you think. Life events can turn what looks like a short term tenant into a very long one.

The security of tenure issue has changed the landscape far more for both tenants and landlords than the rules around RPZs (that's just more of the usual tinkering).
 
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My parents may more into a nursing home, mid next year, we planned to let their house to help cover the costs. I’m not sure we can risk that now.
The draft plans included €3k a month in rent. We’ll have to put some work into the house to get that. We need to revisit!
And see if there’s a family member who might rent it instead, legally they’d have the same rights of course but might be less risky for the family.

If we let it on the market and in maybe 3-5 years want to sell up, and repay the fair deal.. could get messy. We might just leave it empty.
 
The security of tenure point has changed the landscape completely. Even if you are a small landlord you have to be willing to take the risk of a very long term tenancy. In 6 year's time, you may find that there is an eviction ban in place either because of an SF led government or an FF/FG government in desperate housing straights.

I think the government is hoping that the lure of market value rents will mean that landlords will accept the security of tenure parts and help solve the homelessness problem for them. I'd be extremely wary of it, personally. If they can't solve the supply issue, you'll end up with a large cohort of permanent PRS tenants.
 
Annieindublin said:
My parents may more into a nursing home, mid next year, we planned to let their house to help cover the costs. I’m not sure we can risk that now.
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It's not something I would have recommended before and it's not something I would recommend now. Renting is risky. Between non paying tenants, damage to the property, over holding situation, change of tenant situation... It also requires work and when several people are involved, it can get difficult to know who does what. When one parent went to a nursing home, some siblings would have been happy for my husband to organise the rental of the family home. Knowing what was involved, he refused. Once your parents are in a nursing home, you could organise the sale if so they wish.
 
Greenbook said:
Apologies for going on about this, but in the life long tenancy situation, as the property ages you'll have to carry out more and increasingly expensive upgrades and the inspection regime will force you to do this. You may even have to do energy efficiency upgrades. You can't avoid these as you can't sell. You may end up turning an asset into a liability as you'll be a long time recouping these costs from the rent.
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Many years ago I spent some time working in Berlin where lifelong rental is common and rent controls were in place.

People would all complain of the same situation. Tenants would grumble to the landlord about the shabbiness of the apartment or common areas. Landlord would grumble back about the very low rent he was charging.

I already see this near where I live in Dublin where there are a few institutional landlords at the bottom and of the market. It’s a constant struggle to get basic things like rubbish collected or overgrown hedges cut back. Landlords just won’t spend on the maintenance
 
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