Do your homework before you rent out your property. Here are 10 legal points landlords should know.
If you play your cards right being a landlord can be a rewarding experience and in the long run a good way to make some money. No one wants the tenant or landlord from hell so be prepared to do your homework before you rent your property.
This Lawyer.ie guide is brought to you by expert property solicitor, Michael Burns, who specializes in landlord/tenant law.
To arrange a consultation by phone or in person, contact him using the enquiry form or call (01)5677343.
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You need to determine the market rent, which will depend on the location and quality of your property and the amount of similar properties which are available to rent in your area.
You may decide to place an advertisement in your local or national newspaper or on www.daft.ie which costs €20 until the property is let. You may also check in newspapers and on various property rental websites to see how much other landlords with similar properties in your area are charging.
There are a number of steps you can take which will increase your chances of finding reliable tenants.
1. State of the property
Before you decide to rent your property you must ensure that your property complies with certain minimum standards under the law (e.g. free from damp, in good structural repair, hot and cold water, adequate means of heating and ventilation, appliances in good working order, electrical wiring, gas, pipes in good repair).
If your property looks like it has been well looked after and respected it is likely that your tenants will treat it with respect and at the end of their lease (or tenancy under the Residential Tenancies Act 2004) the property will be in a reasonable good condition.
2. Indicators of your prospective tenant’s ability to pay their rent
- Attain a reference from your prospective tenant’s previous landlords.
- Attain a reference from your prospective tenant’s employers.
- If your prospective tenant’s are unemployed they may be entitled to rent supplement from the Health Service Executive (HSE) .Your rent will have to be below the maximum rent level set for your county by the HSE for your potential tenants to avail of rent supplement. Ask your potential tenants to get confirmation of the amount of their rent supplement.
- If your prospective tenant’s are students you should always get their parents to act as guarantors to the lease.
3. The Interview: be careful not to discriminate
When you are satisfied with your prospective tenant’s ability to pay their rent it is time to interview them. Be careful with the questions you ask as equality law prohibits you from refusing to offer accommodation or from terminating a tenancy on any of the following nine grounds: gender, marital status, family status, sexual orientation, religious belief, age, disability, race, membership of the traveller community. You should base your decisions on the merits of the prospective tenants.
4. Lease and contents list
You should take a picture of your property and its contents. You must also make a list of your contents which can be included as part of your lease.
Tyrrell Solicitors can draft a lease for your rental property which will go along way in creating a smooth relationship with your tenants and securing your piece of mind. Once you are happy with your lease you can get your tenants to sign it.
Your tenants can then pay you your first months rent and one months rent in advance as a deposit.
5. Landlords’ obligations
(a) Provide your tenants with rent books.
(b) Register your residential property with the Private Residential Tenancies Board (PRTB).
(c)You must not charge a rent that exceeds the market rent for the residential property.
(d) You must provide your tenants with 28 days notice of any rent review.
(e) Repair and maintain the structure of the premises.
(f) Repair and maintain the interior of the dwelling to the standard which existed at the commencement of the tenancy.
(g) Reimburse tenants for expenditure on repairs that should have been carried out by you.
(h) Provide the tenant with information about any person who is authorised to deal on your behalf and ensure the tenant is able to contact you or your agent at reasonable times.
(i) Allow your tenants to enjoy peaceful and exclusive occupation.
(j) Ensure that your tenants are aware of their obligations and comply with them. It is worth noting that third parties adversely affected by your tenant’s behaviour may make a complaint to PRTB against you.
(k) Return any deposit due (unless the tenant has not paid the rent or has caused damage to the property).
(l)Serve your tenants with a valid notice of termination.
6. Rent book
You are legally obliged to provide your tenants with rent books containing information on the tenancy, a record of all payments made by your tenants and a statement of the rights and responsibilities of landlords and tenants.
If you fail to provide your tenants with rent books you may face a fine of up to €3,000 and/or imprisonment for up to 6 months.
Rent books may be purchased directly from Threshold at a cost of €2 each (plus postage and packaging where applicable). Please see www.threshold.ie for further information.
7. Register your residential property with the PRTB
You have one month to register your rented property with the residential tenancies board. You must download a PRTB1 form from www.prtb.ie. You must ensure that the following information is included in the PRTB1 form:
(a) The address of your rented residential property.
(b) Your name address and PPS numbers. If you have authorised agents their address and PPS numbers must also be included.
(c) The number of occupants in your property.
(d) The name and Personal Public Service Number (PPSN) of the tenant(s) in your property.
(e) A description of your property including the number of bed spaces.
(f) The date the lease commenced.
(g) The amount of rent payable and payment intervals.
(h) This form must be signed by you or your authorised agent and all the tenants.
(i) The fee payable to register a tenancy is €70. A fee of €140 will apply to late registrations. If you are registering a number of tenancies in a single building at the same time and within the specified time limits, a composite fee of €300 applies.
8. If you fail to register with the PRTB
You are legally obliged to register with the residential tenancies board. If you fail to register your rented residential property you may be guilty of an offence and upon conviction shall be liable for a fine of up to €3,000 and/or up to 6 months in prison, along with a daily fine of €250 for a continuing offence.
You must register with the PRTB before you can avail of the PRTB’s dispute resolution service. This restriction does not apply to tenants wishing to avail of the service.
You are not entitled to mortgage interest relief on your property unless you are registered it with the PRTB.
9. Your rights as a landlord
(a) Receive the correct rent on the due date.
(b) Receive other charges or taxes as they fall due in accordance with the lease.
(c) Review the rent annually.
(d) Review the rent within a year if justified by a substantial change in the nature of the accommodation
(e) Refer disputes about the tenancy to the PRTB provided it is registered
(f) Receive notification of any repairs required and be allowed access to carry out repairs and (by appointment) for routine inspections
(g) Repair damage resulting from your tenant’s actions and recover the costs from your tenant’s.
(h) Decide whether to allow your tenants to assign, sub-let, alter, improve or change the use of your property
(i) Be informed by the tenant of anyone ordinarily residing in the property.
(j) Be informed by your tenants if they intend on renting your property after six months.
(k) Terminate a lease.
10. Grounds for terminating a lease
You can terminate a lease that has lasted less than 6 months without providing a reason.
You terminate a lease that has lasted more than 6 months for one of the following reasons:
(a) Your tenants have failed to comply with the obligations of your lease.
(b) You intend to sell your rental property within the next 3 months.
(c) The property is no longer suited to the needs of the occupying household.
(d) You require the property for yourself or for a family member.
(e) Vacant possession is required for substantial refurbishment of the property.
(f) You intend to change the use of the property (for example you may decide to use the property as a bed and breakfast).
It is very important to be aware that your tenants are free to terminate the tenancy at any time but they must give you the correct notice period in writing.
Security of tenure-from six months to four years
For the first six months of your lease with your tenants you will be free to terminate it without giving a reason. After the first six months your tenants will be entitled to rent your property for four years. This is known as security of tenure or Part 4 tenancy under the Residential Tenancies Act, 2004 (“The Act”).
You and your tenants are prohibited from entering into a lease that changes the provisions contained in Part 4 of the Act unless you give your tenants greater security of tenure than provided under the Act.
Each subsequent part four tenancy is called a “further Part 4 tenancy” and exists after 4 years unless you serve a valid termination notice.
The terms of each successive Part 4 tenancy remain the same as the first unless varied by agreement between you and your tenants.
It is worth noting that security of tenure protection afforded by Part 4 of the Act does not apply in certain limited circumstances:
(a) Where a rented unit is part of a property that was sub-divided and you live in the remainder of the property. You can opt out of the Act. You are required to give written notice of this opt out to your tenants before the tenancy is entered into.
(b) Part 4 does not apply to employment-related accommodation.
(c) Part 4 does not apply to ‘section 50’ student accommodation.