My son relocated overseas for work during the financial downturn. Due to the negative equity of his house at that period, he was compelled to let it out. He’s now in a position where he requires the sale of that house to fund his new residence abroad, however, the occupant declines to vacate. Suspiciously, I think the tenant is granting sublets, a practice prohibited in their contract. His rent hasn’t been adjusted over the years, which means the house isn’t generating the level of income comparable properties in the vicinity are. Does he have any recourse?
During the financial crisis, what your lad found himself facing was a common ordeal. It’s commendable that he managed to retain possession of the property, despite being in negative equity, a feat not many were able to achieve.
As for the issue of the current rental income from the house, your son is legally allowed to raise the rent inline with the law. If the house is in a rental pressure zone, he is obligated to issue a rent increment notice to the current tenants via the approved format. This entails completing the Residential Tenancies Board (RTB) form related to rent adjustments, offering three similar properties that illustrate higher or equivalent rental prices to the proposed new rent, providing the tenants with a three months’ notice period of this increment and crucially, utilising the rent calculator tool provided on the RTB website to determine what new rent will be. The RTB webpage holds extensive information on the correct procedures and how to notify tenants of a rent raise, your son is encouraged to explore this.
However, from personal experience in property management, it’s unlikely to be a financial windfall for your son. This is due to rent increments over time only allowing for nominal increases. Nevertheless, it may assist in closing the disparity between the current rent he’s receiving and the market-standard rent for alike properties in that area.
Finally, the potential unauthorised subletting. If true, procedures are clean-cut. The law requires a landlord notifies the tenant with a written warning stating the contract breach and affording them adequate time to rectify the transgression. The appropriate timeframe is often determined by the severity of the breach.
Would it be the responsibility of the property owner or management firm to replace the windows in our flat? Can my neighbour be held accountable for any damage to my flat ensuing from their renovations? For instance, if a letter were written to tenants about their neglected duty to upkeep both front and back gardens, it would be rather agreeable to allow them a fortnight to set matters right. However, considering the current shortage of available properties, my counsel would be to grant the tenants a period of four to six weeks to mend this breach.
Should the tenants disregard your request and persist in breaking their lease agreement, a 28-day termination of tenancy notice can be issued. Further, if the tenants choose to remain, lodging a case with the Residential Tenancies Board (RTB) for overholding would become an unavoidable step. Unpleasantly, it is the least desirable outcome since the RTB currently requires several months for such cases to be seen through. Knowing well from past experiences of legally representing property owners dealing with overholding tenants, such proceedings could take up to a year or even longer.
Were I in your son’s position, I would overlook the subletting problems and instead proceed to issue a termination of tenancy with the intention of sale, ensuring the tenants are given due notice. Also, it is important to note that your son is considering selling the house to purchase a new residence. Keeping this consideration in mind, it might not be necessary to deal with these tenants via the methods mentioned above. From my perspective, of prime importance here should be acquiring complete vacant possession of the house at the earliest opportunity. This would allow your son to put the house up on sale in the presently robust real estate market.
Therefore, if I were in your son’s place, I would bypass the subletting complications and directly give notice to terminate the tenancy in an effort to put the property up for sale. As considerable time has passed since the recession, your son will likely have to grant the tenants the longest permissible period of notice before they need to vacate. If the tenancy exceeds eight years, a notice period of 224 days is required.
The law stipulates precisely the way a legitimate termination of lease for sales purposes should be conveyed. These guidelines can also be found on the website of the Residential Tenancies Board (RTB) outlining the procedure for issuing such notices. Among several actions that need to be taken is ensuring an original statutory declaration accompanies the tenancy termination and dispatching a duplicate of the notice to the RTB the same day it is given to the tenants.
Further counsel; if you suspect there may be additional occupants in the property who weren’t part of the initial lease agreement, simply request the principal tenant to disclose their identities. This is necessary for updating your yearly RTB registration, which is now legally obligatory. Upon completing this task and obtaining this crucial information, you’re able to issue the tenancy termination, specifically identifying all occupants of the property. This augments the authenticity of your notice, a factor that’s increasingly significant today.
The writer, Marcus O’Connor, is a certified land surveyor and a member of the Chartered Surveyors Society of Ireland.