Irish Property Market: The Reluctant Landlords
This summer we have mostly spent our time waiting. Impatiently at first, but gradually it has become the norm to have this strange cloud of uncertainty hovering overhead. I try to ignore it, but it’s always lurking nearby. We are definitely maybe moving house next week. Or we’re definitely maybe homeless. One of the above. Maybe. It’s hard to tell.
We are one of the many reluctant landlords (and tenants) in Ireland. Courtesy of the Irish property market implosion, selling and buying houses to facilitate better job prospects and commutes wasn’t a viable option for many over the past few years. Or at least not a step to be taken lightly. Back in 2010 the property market was in free fall, and an economic depression was just hitting its stride. The government decided they were too broke to invest in the infrastructure and transport systems badly needed in north county Dublin, the only place we had been able to afford in the house-buying frenzy before the bubble burst. As a result, the job prospects in the area decreased dramatically.
I stuck it out for a while in a local startup company that sometimes paid their bills (and staff) until they really began to sink. Then I took a step up the career ladder to work for a prestigious IT company. This also meant signing up to a painful commute into town. Soon my husband and I both found ourselves sleep-walking through life on autopilot as we commuted away all the free hours of our days. 4.5 hours a day for me, plus regular 24/7 oncall shifts that meant being up half the night. We were both in very demanding jobs. Neither of us were able to muster any energy to cook or clean or exercise by the time we staggered home in the evenings. It was no way to live. Something had to give.
So, like so many others, we made a change. Our only realistic option was that of becoming reluctant landlords, and even more reluctant tenants. We rented out our house and rented a smaller one much closer to town, drastically reducing our commutes at a big financial cost. You pay a higher rent to live nearer the city, you receive a lower rent from your tenants, then the government steps in and swipes at least half that rental income. Ouch. We weren’t the only ones in this boat. It’s a no-win situation. You pay your mortgage, you pay your landlord, you pay the government a wide variety of taxes, a letting agent happily takes a cut but doesn’t do a whole lot to earn it. You lose money all round, along with losing the privilege of living in your own home.
Being a renter and a landlord at the same time seems to mean getting the worst of both situations. You live in a house that the landlord doesn’t want to spend any money on, but they require you to compensate them for something as outrageous as painting a wall. On the flip side you’re dealing with tenants that think they’re entitled to have you buy them special fancy orthopaedic mattresses. That it’s okay to throw darts at the walls (and floors) and leave hundreds of pockmarks everywhere. To have massive rugby players stay over who somehow manage to break the bath?! Tenants that are generally a royal pain to deal with and regularly disappear off at short notice leaving you with no rental income to offset your expenses. We are totally sick of both sides of the renting equation in Ireland by now.
After the Rascal arrived, we relocated ourselves to the opposite side of the city, the leafy southern suburbs where I had grown up. A lot less leafy now, and rapidly expanding out into what were once considered the mountains. But there was decent transport and the basic amenities you need for a young family. And now, 4 years after we left the Northside, we’ve tired of living in chilly noisy houses we can’t insulate or soundproof adequately. We want to put down more permanent roots. It’s time to take the next costly plunge and try to move here permanently for the better job opportunities, commutes, schools etc. Unfortunately that means uprooting our family back to the Northside while we attempt to sell and buy a house in the same transaction. Not a fun proposition, but necessary in order to both transfer and increase our mortgage, which would not be available to us with the same terms as new customers.
Now is the really fun part of the story. What’s worse than having bad tenants? Bad tenants that won’t leave.
We told our tenants last October that we were not renewing their yearly lease as the house would be going up for sale, and they should plan to vacate by March. We suggested that they could stay on a rolling monthly basis until they found new accommodation, so long as it didn’t affect our ability to sell. They agreed. Rents are on the rise, and the rent they were paying was well below market rate. On inspection of the premises we discovered a massive dog (animals are banned by the lease without our written agreement) had decimated the back garden, and the top floor of the house had been sublet to someone (unsurprisingly also in breach of the lease agreement). Given that they’d already been told to start looking for new accommodation, it seemed pointless to even waste our breath complaining. We focused instead on preparing the house for sale, knowing repairs would be needed once they left.
Fast forward to March. We’d gone through the motions with three different shady estate agents before finding one that actually seemed interested in helping us sell our house. We had tradesmen out to do some maintenance on the property and it finally went on the market. We kept the tenant informed of our progress. He said little in response. I traipsed across the county to review the house with the estate agent. He was not enthusiastic about the prospect of selling it with a large family that had a surprisingly vast collection of furniture crammed in to what was provided as a pre-furnished house. Subletting to someone that didn’t clean the empty beer cans out of his room along with having the big scary dog and super-size trampoline in the now grassless garden wasn’t going to help either. I concurred with this assessment. I asked the tenant about his progress with finding a new place to live. He was vague and uninterested in that topic of conversation. This was not a promising sign.
So… we duly served the tenant with the full legal notice period required (they’ve been there less than 2 years). The tenant immediately became very selective about what communications he received from us. Said verbally that he would ‘do his best ‘to leave at the end of the notice period, refused to put anything at all in writing to acknowledge any of our communications. Would not give us any updates unless we chased him. Expected us to be flexible about his departure to suit his family, but was not willing to give us the courtesy of any advance notice of his plans. Didn’t care that we also had to give notice to our own landlord and couldn’t afford to sit around waiting indefinitely wondering if and when we would have to pack up and move. Or that this effectively blocked any plans we had for the future.
Finally he said he was leaving. Early. He’d paid a deposit on a new place and asked us for a reference. Ah, the irony of giving a good reference to someone because otherwise you can’t get rid of them. We gave notice to our landlord based on what we’d been told, adding some extra time on, but unable to afford a bigger buffer. Two weeks later and our tenant had failed to confirm his vacating date. I wasted much time trying to get an update from him. Eventually he rang me. He’d changed his mind. They were moving to a different house now. But not until a few days after his notice period expired, or thereabouts. I would have liked to throttle him. Instead I said we were willing to accommodate the change, but needed a definite date and to be kept in the loop of what was happening so that we could try and negotiate with our landlord. Oh and by the way, rent was now more than a week overdue. The tenant finally responded with his first written communication ever. It contained wild accusations of how unreasonable we were, expecting him to move his family when they wanted to stay. A running commentary on how great a tenant he was. It also casually added another couple of weeks onto his ‘possible’ departure date. Totally ignored the issue of the unpaid rent because that’s, like, irrelevant to the situation.
We’d seen the recent ad campaigns. What do you do if there’s an issue with your tenant? Call the PRTB! We hadn’t heard particularly encouraging reports of landlords getting any satisfaction going that route, but nevertheless, we went to the website to review our options. Hmmm. Legal dispute = months and months and significant expense. Telephone mediation = weeks and weeks but minimal upfront cost. Unsurprisingly we took option two. Two weeks later we finally heard that the tenant was not responding to calls or texts from the mediator. We were shocked (not). I provided what I think is the tenant’s wife’s number. That phone was accidentally answered and the lucky PRTB mediator got their first taste of trying to communicate with our tenant. It didn’t go particularly well.
PRTB mediation is kind of like sending in a negotiator to a war-torn region and having them keep ringing each party separately to try and broker a peace deal when one side is totally disinterested in the process. A negotiator who will hold the landlord to the letter of the law, and then some. But has absolutely zero influence on the tenant. Not even a finger to wag threateningly at them. A successful mediation means getting both parties to ‘sign up’ for some kind of agreement. Otherwise it’s a failed mediation, sorry. If both parties sign up and the tenant reneges on the deal what happens? Nothing. It’s a failed mediation. Your next step is to try that expensive and slow legal dispute. You may not refer to anything the tenant agreed on, but did not do in the mediation. It’s as if the mediation never happened. Wonderful. The mediation is not legally binding, nor is it even allowable as evidence. It’s literally not worth the virtual paper it’s written on.
So here’s where we’re at. The tenant claims he has paid up his rent until he leaves because he paid a deposit. Doesn’t matter that a security deposit explicitly cannot be used as rent (because then it’s not a security deposit), or that the rent is due on the 21st of each month and he now claims he might leave a couple of weeks after any deposit used for rent would have run out. He insists he has paid a deposit on a new house. He can’t say when he’ll move in to it, even though the move is allegedly due to occur in just a couple of days. Our choice is to accept his terms, or pull out of the mediation process. It’s not really a choice. What can the PRTB do to help us? Talk at him, if he’ll take their calls. If (when) he runs off leaving unpaid rent and damaged property? We’re on our own. There’s absolutely no penalty that can be enforced on him. No official record of what kind of tenant he is. All future landlords will have no way of knowing to beware.
Best case scenario? He disappears sometime this week. Worst case scenario? He’s delaying and digging in for the long legal haul. A protracted battle where he could live in our house for maybe a year or so without paying rent before we can legally have him removed. This makes the prospect of asking our landlord to let us stay and continue paying rent and mortgage ourselves rather unrealistic. In the battle of who gets to be homeless, the tenant automatically trumps the landlord. Next week we could easily be homeless despite owning a house. The only choice that doesn’t leave us suffering badly financially is to do unto our own landlord as our tenant does to us. (Stupidly?) we’re not that kind of people. That leaves us with nothing more we can do about the situation right now.
And so we still wait. We don’t hope any more. We just wait. And wait some more.