You Might Want To Sit Down For This

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From top: Daft ad: Dr Michael Byrne

Tenants have more rights when buying a chicken sandwich from a deli than when renting a home.

Dr Michael Byrne writes:

Budget 2017 was another slap in the face for tenants in the private rented sector.

The main housing initiative was the so-called ‘help to buy’ scheme which will make it possible for people spending €600,000 on a three bedroom semi-detached home get €20,000 for the state (although this will ultimately be absorbed by the developer via increased house prices).

Landlords got some nice additional tax breaks. But tenants, who have seen average rent increases of 40% in the last three years, got nothing.

Many of us were already left speechless when the government’s Rebuilding Ireland housing plan failed to include a single measure for the private rented sector. This leaves all hope resting on Minister for Housing Simon Coveney’s forthcoming National Strategy for the private rental sector.

For this strategy to have any impact, however, it must get beyond the narrow lens of ‘supply’ which has dominated the debate so far.

This approach is based on a straightforward idea: if we have more supply of rental accommodation, rent increases will stabilize and everyone will be able to find a place to live.

Let’s set aside for a moment the obvious problem that in the real world of the Irish housing system there is no direct correlation between supply and rent levels.

Perhaps more importantly, what is forgotten here is that private rental housing in this country is inherently dysfunctional and a contravention of the right of tenants to a home. Once we appreciate this the absurdity of focusing solely on supply becomes clear.

Let’s take a brief look at what passes for normal in the private rental sector. To take one example, during the first six months of a tenancy any landlord can evict any tenant for no reason whatsoever.

Imagine you’ve moved house. You’ve just got your routine together, the kids settled in their new bedrooms, the school run and morning commute figured out. Then you get a letter from your landlord saying you have 28 days (that’s right 28 days) to get out.

Why? Maybe he just doesn’t feel like it anymore. Maybe he thinks he can get more money from someone else.

In the end it doesn’t matter, because your landlord is perfectly entitled to do this.

If banks had a similar ‘grace period’ during which they could pull out of mortgage contracts or local authorities had similar eviction powers for social housing tenants it would be a national scandal. But tenants in the private rented sector don’t seem to matter so much.

Even after this ‘grace period’ of six months there are ample opportunities for landlords to evict. They may have a child, cousin, niece, nephew, aunty (etc.) who want to use the property.They may wish to sell. Maybe they want to refurbish.

All of these are, under current regulations, valid reasons to terminate a tenancy. It’s not hard to imagine abuse of these regulations by, for example, simply pretending the house is required for family use. At the Dublin Tenants Association, in which I participate, we see this every week.

In short, there is no security of tenure in the private rented sector.

Meanwhile, it is impossible to know how much you will be paying for rent this time next year. Rent increases of as much as €600 per month are not uncommon.

With average rents for a one bedroom apartment in Dublin currently around €1,200, if you are working full time on the minimum wage your rent will take up 80% of your take home pay.

The only ‘regulation’ is that landlords cannot increase the rent above the level of ‘market rent’. This is simply absurd since landlords define what the market rent is.

The key point is that in today’s world it is simply not possible to live like this. Apart from the very real risk of homelessness, how are we supposed to save, take out pensions or plan for our future on any level if the only thing we know about our housing costs is that they will go up?

The condition of accommodation in the rental sector is similarly dismaying. The reality is that today you have more rights when buying a chicken sandwich from a deli than when renting a home.

If you buy a chicken sandwich with mold on it you’ll get all of your money returned in full. If the deli keeps selling moldy produce it will be shut down. Try getting a landlord to deal with mold and the weakness of the regulations will become all too clear.

It is perfectly obvious that no one can feel secure and safe in their home in these conditions. Is this the kind of housing we want to increase the supply of? Do we want even more households to have no idea where they’ll be living next year or even next month and even less of an idea how much they’ll be paying for it?

Currently one third of all households in Dublin are in the private rental sector. Do we want 40% of even 50% of households in the capital to be subjected to the chaos, instability and woeful standards of this sector?

The answer is an emphatic no. The debate needs to change and it needs to change immediately.

Let me be very clear, housing supply needs to increase, there can be no debate about that. But we need to move away from a narrow focus on supply and recognize the necessity for radically transforming the private rental sector. This means placing security of tenure at the centre of policy reform and it means regulating the affordability of rents.

If you happen to be part of the very small minority that are developers, bankers and landlords by all means continue to focus solely on supply. After all that makes it more likely you’ll get tax incentives and other handouts from the government.

For tenants and for anyone who cares about the right to housing, however, we need to recognize that it’s time we saw a systematic change of the private rental sector for once and for all.

Dr. Michael Byrne is a lecturer at the School of Social Policy, Social Work and Social Justice in UCD and participates in the Dublin Tenants Association Follow Michael on Twitter: @mickbyrne101

52 thoughts on “You Might Want To Sit Down For This

  1. Boy M5

    The first time buyers assistance should be applied to ALL houses and dwellings, not just new builds. It does three things.

    1. Pushes first time buyers out to the suburbs and commuter towns.
    2. Enriches builders even more.
    3. Hollows out mature inner suburbs of young families.

    It doesn’t to what it is supposed to do because really it is just a builder’s incentive.

    1. Turgenev

      It shouldn’t exist. Instead, house prices should be limited to 2.5 times the buyer’s salary (the salary of the top bidder). That’d soften the market’s cough.

      1. some old queen

        You can’t regulate the property market but you can impose restrictions on how much someone can borrow.

    2. Nikkeboentje

      What is wrong with first time buyers having to buy in the suburbs and commuter towns? I bought my first house 65km from Dublin and commuted for two years until I had enough money for a deposit on a house in Dublin (mixture of savings and selling the house for more than I bought it for). Why do people now expect everything handed to them on a plate?

      1. scottser

        because what you did is out of the reach of most working people now. try renting in kildare, meath, wicklow or louth nowadays – the days of 500pm rent for a 3 bed house are long gone.

    3. Kieran NYC

      +1

      Baffling. More focus should have been on renovating second hand homes, etc and derelict sites

  2. Boy M5

    What we really need in Ireland is less partisan politics and a unity of vision for the future.

    FF and FG have always been about clientism and it has caused social division and economic inequality for decades.

    AAA and other harder left socialists will always have a place but will never be in Government as their politics are outdated now.

    SF is now a centrist party so has a good chance of getting in when Adams is finally gone.

    Social Democrats are promising but need to field more candidates.

    The FF/FG merry dance of alternating pretend opposition is now dead for ever. They should do the decent thing and get married and open the field for real mature, effective politics.

    1. The Scrutineer

      “AAA and other harder left socialists will always have a place but will never be in Government as their politics are outdated now.”

      Yeah, we’re all over the politics of tanking the economy several times a decade through blind faith in the free market and enriching pals in the business elite – oh wait, that’s not them. That’s everyone else.

  3. kellma

    I agree with the sentiments in this piece. Life in Ireland is too insecure when you are renting privately. I did it for years and I was lucky I had a humane landlord who was happy enough not to scourge every cent out of us based on the fact we were good tenants. I’m a landlord myself now and apply the same logic. My rent is a good 300eur a month less than the going rate but my tenants are there 8 years and they never cause a days hassle to me or the neighbours. Not so many like that. But it’s just depressing how long it is taking this government to do something about this… This will come back to bite the capitalists eventually because companies hiring have people faced with having nowhere to live/not being able to afford to live within a 20km radius of work…

    1. Boy M5

      Same here. Rented for years, now rent out another house to two reliable tenants and I charge below the going rate. Everyone wins.

      1. Andyourpointiswhatexactly?

        It’s win-win. If you charge a decent rent, tenants are more inclined to leave you alone and not bother you with small probs in the house. If my landlord were to up my rent to what they’re charging in the area, I’d be all over her like a rash to get things fixed. As things stand, I’m happy with it and so is she. It’s still a lot of money, but it could be so much worse. Which is appalling, really.

  4. DubLoony

    Both private rental issues and supply needs to be tackled. We have a growing population and not enough availalbe places for them. The 250,000 empty dwellings across this state needs serious investigation.

    In relation to the immediate use by family member, tenants have a right to the following information:

    “If the landlord needs the property for their own use or for an immediate family member, you must be given the following information in writing, along with the notice of termination: the person’s name; their relationship to the landlord; and how long they will occupy the dwelling. The notice must also include a statutory declaration stating that the landlord needs the property for their own use or for an immediate family member. The RTB’s sample notice of termination when the landlord needs the property (pdf) contains the required information and a sample statutory declaration.”

    From
    http://www.citizensinformation.ie/en/housing/renting_a_home/if_your_landlord_wants_you_to_leave.html

  5. Mmmmm...

    He’s wrong on a few key points.

    He states that in the first six months of the tenancy that the landlord can issue a notice of termination to the tenant for no reason. He fails to mention that the tenant also has that right i.e. the tenant may quit for any reason whatsoever.

    He also states that “In short, there is no security of tenure in the private rented sector.” A part 4 tenancy provides security of tenure except in certain circumstances e.g. where the landlord or a family member wants to move back in, anti-social behaviour, breach of lease, etc. etc. and prescribed notice periods must be observed.

    If anything the tenant has more favourable rights than the landlord. The notice periods, for example, range from 28-112 days for a tenant but from 28-224 days for a landlord.

    1. Bobby

      ‘If anything the tenant has more favourable rights than the landlord’

      I just kept reading this over and over again in awe.

        1. Scundered

          I’ve only had to that twice over the years, though I mean only to tenants who were serious trouble. On second occasion he fitted fancy jocks all over door, so I took the front door away, I love my door.

  6. Jake38

    “….is a lecturer at the School of Social Policy, Social Work and Social Justice in UCD….”

    In future can you put this at the beginning, rather than the end, of an article so I can avoid wasting my time reading it.

    Thanks.

      1. thecitizenatbarneys

        Dr. Michael Byrne does not do a good job of emulating an intellectual in this piece anyway.

        Landlord tenant law in Ireland is strongly weighted toward the tenant. A comparison to the rights of the landlord in Ireland as opposed to England clearly highlights this. There is ample security of tenure in Irish Landlord Tenant law.

        Landlords do not define what the ‘Market rent’ is. The market defines market rent and it is an objective figure backed up by comparables. The tenant is also entitled to claim a rent reduction based on the movement of the market. There are other limitations in the legislation surrounding market rent which also protect the tenant.

        If a tenant has been renting a property for 6 months, no matter what lease or contract is signed, then the tenant is entitled to stay for 4 years if they so desire.

        If a landlord wishes to take advantage of the family member clause in the legislation it only applies to a direct family member, not the long alliterative list Dr. Michael made up above. Also, the landlord is obliged, at the end of the family members tenancy, to offer the property back to the original tenant.

        The legislation exists to protect tenants, if tenants are unaware of their rights it is mostly their fault.

  7. scottser

    rental income for landlords is liable to income tax at 40-odd per cent. it’s no wonder that rents are so high as it costs 1300 bucks a month in rent to service a mortgage of 800.

    i’ve said it before and i’ll keep saying it. renting a property should be a business, run by professionals and housing agencies or local authorities. private landlords should be licenced and tax on rental income, the same as any small business. you’d pay a more favourable tax rate the longer the lease term.

    the budget measures are a typical government response of throwing good money after bad, knowing that it’ll all be hoovered back up in tax. and who ultimately pays? the tenant.

    1. DubLoony

      There’s too many accidental landlords. Lot of 1 or 2 bed flats bought when a person was single, but with negative equity & so can’t sell.

      There’s also the houses left by emigrants who hold out for the day they want to come back.

      In Germany, rental homes are put into a management company to be professionally run. As an owner, you get your cheque every month but they look after the day to day let. Tenants have rights, property is properly maintain, owners get paid. Everyone knows where they stand. Happy all round. There’s also plnty of supply so rents are not insane.

    2. Boy M5

      “it costs 1300 bucks a month in rent to service a mortgage of 800.”

      You only pay tax on the difference between the mortgage and the rental income. The mortgage is an expense. Also, all expense incurred in renting and maintaining the property is deductible against tax as is the case with any business expense.

      1. Govner

        “The mortgage is an expense.”

        Incorrect. Only the interest element of the mortgage is an expense. Which make a substantial difference in the calculation.

        1. Brother Barnabas

          Incorrect again.

          Only 75% (soon-to-be 80%) of the mortgage interest can be written off as an expense.

          1. anne

            The poor landlords have to pay tax though…isn’t it awful for them..imagine imposing tax on income. Like they may have to contribute to the accumulation of a valuable asset instead someone else paying for their pension in full.

            I’ll tell you what, I’m all for landlords paying zero tax on their rental income, if paye workers can write off their mortgages off their taxable income too. Or how about paye workers even getting the 75% interest write off and maintenance write off landlords currently get, off their paye taxable income? What tax relief are mortgage holders currently getting 15% is it?

            http://www.revenue.ie/en/tax/it/reliefs/tax-relief-source-mortgage-rates.html. yes 15% versus 80% for landlords.. we don’t need to be encouraging more landlords by giving them more tax write offs.

    3. anne

      “rental income for landlords is liable to income tax at 40-odd per cent.” or 20%…depends on other income. Minus all the write offs…wear n tear, 75% of the mortgage interest, maintenance fees, insurances etc

  8. Brother Barnabas

    “Let’s take a brief look at what passes for normal in the private rental sector. To take one example, during the first six months of a tenancy any landlord can evict any tenant for no reason whatsoever.
    Imagine you’ve moved house. You’ve just got your routine together, the kids settled in their new bedrooms, the school run and morning commute figured out. Then you get a letter from your landlord saying you have 28 days (that’s right 28 days) to get out.
    Why? Maybe he just doesn’t feel like it anymore. Maybe he thinks he can get more money from someone else.
    In the end it doesn’t matter, because your landlord is perfectly entitled to do this.”

    Except that’s not actually correct.

    That would ONLY be the case if the tenant and landlord had mutually entered into a PART 4 Tenancy agreement. This is a month-to-month contract that doesn’t bind the tenant to any degree at all – so it’s a bit rich to complain when it doesn’t the landlord either (even though, after 6 months, it DOES bind the landlord, but not the tenant – if anything, this legislation is pro-tenant). If it’s a fixed-term, 1-year contact, there’s no 6-month “grace period” at all. It’s a legally binding contract with no get-out clauses for the landlord (although there are a few for the tenant)

    Quite extraordinary that Dr Byrne would write this piece without first checking that he knew what he was talking about.

    1. thecitizenatbarneys

      “Quite extraordinary that Dr Byrne would write this piece without first checking that he knew what he was talking about.”

      It’s Broadsheet brother barnabas….

  9. stephen

    I agree with some points here but

    “Once we appreciate this the absurdity of focusing solely on supply becomes clear”

    It is the fact that the government is blatantly ignoring the lack of supply and trying to cover over with other useless schemes that has been a major factor in the increases in rent

    1. Kieran NYC

      It is putting BILLIONS (over 5, as far as I know) in. But planning takes time. Especially when the planning process is so long, drawn out by NIMBYs.

  10. karlj

    I recognise the picture.
    That crying chair is from a one bed flat in Galway, where the bed is a bunk bed.

  11. some old queen

    Less than one hundred years ago the landlords were ran out only to be replaced by our very own Rachmans. Gouging is excused by ‘the market’ and NOBODY in the media is highlighting that these are real people’s homes. People with nowhere to go. People with whatever few bits they can carry on their backs into the winter streets.

    Not good enough.

      1. some old queen

        I was just highlighting the cold reality of eviction.

        Here is a question: If it is the case that law is already favoring tenants then why do people not have the same tenure as in other countries?

  12. James Byrne

    How is that guy working in UCD?

    The facts are wrong. Its all sensationalism and half truths. Thats great in the short term because you get people to join in with your cause but as soon as you get any momentum the papers will point out the lies and youll lose more people than you gained.

    I suppose posh people never feel the effect of their waffle but real people suffering need genuine support not bullshit from Doctors in UCD. Politicians created a housing shortage when they tried to save money by stopping building council houses and puttng vulnerable people onto the private rented market without bringing in rent control instead. All the parties had their day while it was going on so their all responsible but none of them want to take responsibility.

    We are left with ordinary people trying to do their best and theres no need for posh types to stick their oar in with attempts at rabble rousing. We arent rabble we dont need to be mindlessly wound up to help each other out.

    Stay in UCD and keep your mind on your sums Doctor.

    James Byrne (no relation)

  13. Rachel

    I live in Longboat Quay North. We are still not kicked out because of the fire issues (and now the collapsing roof). However when I called threshold regarding my rights as a renter if we got thrown out by police/fire brigade I was told it turns out we have none. No right to deposit or that months rent back.

    Nor did we have the right to break our tenancy – despite the place been condemned as completely unsafe to live and despite the fact when we do eventually get kicked out (still waiting) there will be 900 of us all looking for new places in the area at the same time. This includes social housing, young families and ground floor dwellings with disabled tenants.

    I wish I was suprised.

  14. John

    There is just no excuse for the lack of actual protection for renters in the case of substandard living conditions. There is legislation that all appliances and fittings must be in proper working order, but actually getting the landlord to act on this is at their discretion. The same thing with mould, my old landlord said that I just have to wash the walls as part of maintaining the property as a tenant. It’s nonsense. Trying to force them to carry out their duties costs money which most tenants do not have.

    There could easily be a government provision for this, to ensure that all the laws which is has in place are being enforced and not at the cost of the tenant, but there is no appetite for this kind of thing in Ireland, and the number of TD’s who are landlords certainly wouldn’t help.

    In my own situation, the conditions were substandard for most of the first year(excluding the immersion which I fixed myself (and was then undercut by the landlord for the price) After the 12 month lease had expired, so had my direct debit so I asked for the problems to be fixed and stopped paying the rent when nothing was done, before the second months rent was due I started getting phone calls about the rent. I explained I had no problem paying it, but refused to continue paying it while there were so many problems. He agreed to bring up paint, and fix the window and mould problem the next week. I paid for both months. He never fixed the problems but I did get a letter saying my rent would go up and was asked to agree to this with the problems in place by the letting agency.

    So yeah tenants have loads of rights, but most have neither the time or money to actually use them.

    1. James Byrne

      John you shouldve called threshold.

      Theyd have helped you get in a free inspector from the coco who would have sent the LL a letter telling him he had to have the repairs done by x date or hed be taken to court. With that letter you couldve taken the LL to the PRTB. It costs 25 quid full stop. Theyd have awarded you cash for having to put up with low standards and wouldve told the LL if the standards werent met by the time the coco says hed be liable to pay you more.

      While you were there if hed given you a rent increase in a property that didnt meet the minimum standards theyd have told him no and set the rent for the next year. If you both signed the doc there and then youd have been set up with a decent gaff at a decent price.

      Never listen to the people who are pure negative. Therse always ways to fight.

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