Irish Water have finally agreed to accept tenant details from landlords with regard to registering for water charges. Prior to this the tenant had to register and if they did not, the landlord faced the possibility of being billed for the tenants water consumption.

With Irish Water agreeing to accept tenant details from landlords, the tenant can now be billed directly for their water consumption.Further information is available on Irish Water website (link below).  At SCK Group, for all properties that we manage for you, we will be registering your tenants with Irish Water over the next couple of days, so in this case there is no need for you to do anything further.

http://www.water.ie/news/irish-water-launches-camp/

 

Property Clinic – The Irish Times  3rd July 2014

 

Q I bought an apartment in a large complex in Dublin in 2006. I could initially afford my service charge payments in addition to my mortgage repayments as I was on a reasonable salary. As with a lot of people, I took a significant pay cut in the height of the recession and found myself struggling to make all of my repayments.

I missed a few service charge payments and eventually stopped making these payments altogether. I know for a fact that there are other owners who have done the same or similar.

There is now a new management company in place who are chasing my backlog of missed payments and the service charge has also increased. I cannot afford to pay this amount and don’t really see why I should if others aren’t also.

What’s the worst that could happen if I ignore these reminders and if it’s a case that I really must pay them, is there a way to seek that they be reduced or that I don’t have to pay the backlog?

 

A You would be aware that you must pay your service charges as your solicitor would have advised you on your contractual obligation to do so when you purchased your property. You will also recall signing documents when you purchased your property, thus you were entering into a contract with the owners’ management company (OMC). The lease agreement binding you as a property owner to the OMC is, amongst other things, an obligation to pay service charges in full to your OMC for the running of the development each year.

The consequences for your actions or lack thereof are that your fellow members have been forced to pay twice; once to cover your costs whilst you did not contribute and secondly to pay for legal proceedings to recover the money you owe.

A competent and functional OMC would arrange for debt collection proceedings against its debtors so that the company can remain solvent and that paying members can see evidence of equity to ensure they continue to pay.

The legal process would be as follows: firstly issue a demand letter advising of the monies due to be repaid within a short period of time to the OMC. If you fail to respond to the solicitor’s letter with payment or to acknowledge the letter, the solicitor will make an application to the relevant court for judgement. There would not be a need for a court hearing if you choose not to defend.

The relevant court of jurisdiction will depend on the money you owe, that is: the District Court for sums not exceeding €15,000; the Circuit Court for sums not exceeding €75,000; or, the High Court for sums over €75,000.

If you choose to defend, the case will be heard by a judge. Once the OMC has a judgement against you, they may wish to publish the judgement by way of reference to the register of judgements through an organisation like Stubbs Gazette.

They may also seek to enforce the judgement from a variety of options including: referring the matter to the Sherriff who will have powers to collect the monies due from you or recover assets from you; seek an instalment order against you meaning you would be required to attend the court to provide it with a statement of means so the appropriate amount of regular instalments required to clear the debt can be determined; or, seek a judgement mortgage meaning a judgement against your property will be registered.

In recent years the latter option of a judgement mortgage was not favoured as the property would be worth less than the mortgage value and as such the bank would have a preference on the property over any existing burdens. It may now be that if the property was sold there would be sufficient funds to cover any burdens and the money owed to the OMC. The OMC may then seek to have the property sold and have the debt paid from the sale by way of a Well Charging Order and the Order for Sale. As you say many people have had their income reduced so it is unfair to your fellow members to expect them to cover your service charge payments when they may well be experiencing similar pay cuts to you.

Your predicament is grim and you should act immediately. I would recommend you liaise with the OMC and try to arrange an amicable payment plan. You may also wish to seek independent legal advice. FLAC or MABS will be of assistance to your cause if you are unable to arrange for a solicitor.

As I have outlined, there are many consequences should you fail to sort this out amicably, not only for yourself but your fellow members may be forced to pay higher service charges by way of legal fees and thus, there would be less funds available for maintenance and repair of the development, meaning the sale price or rental value will decrease for all of the units.

 

Paul Huberman sits on the Property and Facilities Management Professional Group of the Society of Chartered Surveyors Ireland scsi.ie

http://bit.ly/1oqRfuP

This question appeared in today’s Irish Times and raises the age old problem of how to handle a situation where tenants leave without notice and leave your property in bad condition.  At SCK Group we have helped landlords with similar problems and have made representations on their behalf to the PRTB.

I rented my apartment to a couple and the lease is up at the end of the month. However, when I contacted them they told me that they had already moved out and had put the key in the post and that I can keep their deposit as the last month’s rent. I have since been to the property and it’s filthy with some damage to the furniture and some items missing. I have the tenancy registered with the PRTB but am not sure what to do. I tried to contact the utility companies to see if the bills are paid but they won’t talk to me due to “data protection”. What should I do?

A This is a most unfortunate position to find yourself in but one that does happen from time to time. It is good that you have registered the tenancy with the Private Residential Tenancies Board (PRTB) and the benefit of that will now be apparent.

Photograph the property with a date camera before you start the clean up. List all items that are missing. Obtain a quote for the repairs and replacement of the missing items. It can often take a few days to really check the property so make sure that you pick up on all damage. You can download a claim form from the PRTB website, prtb.ie, and I would recommend making a claim against the tenant for the damage. Provide their PPS numbers to the PRTB in the first instance.

If you are still in contact with the tenants, ask them to provide you with a forwarding address which will allow you to transfer the utilities back into your name and the utility company will send any outstanding bills to them at their new address. Take the meter readings and make the transfer by email keeping a record of each transfer.

You should seek compensation from the tenant in the first instance for the damage and missing items at the cost to you to make good and replace. If they refuse this request, you should then proceed with the claim to the PRTB.

The PRTB process will require you to provide clear evidence of the damage and you will be asked to provide receipts for any expenditure. Be careful only to seek compensation for issues that would be beyond normal wear and tear as this is allowed under the Residential Tenancies Act and can be hard to quantify.

Try to have all communication with the tenant recorded either by email or text. The tenants appear to have been unreasonable in their behaviour and so you must demonstrate that you are reasonable in your management of the issue. If you can’t resolve it amicably, the only route for you is to go through the PRTB.

Fergal Hopkins is a member of the Society of Chartered Surveyors Ireland (SCSI)

In today’s Irish Times Property Clinic supplement some interesting questions are addressed about Self-Management of Multi-Unit Developments by OMCs (Owner’s Management Companies) and the pitfalls that should be avoided by such an undertaking. i.e. Licensing requirements, Financial Controls, Protection for the OMC against negligent decisions etc.

Continue reading…

Within the next 2 weeks or so, you will more than likely receive a letter from Revenue with details of the new Property Tax (LPT).  Your may not even receive a letter, but you will still owe the tax.  This is a self-assessed tax and it will be up to property owners to decide how much property tax they are obliged to pay and then to make sure they pay what is owed to Revenue.  With very few exceptions, anyone who owns a Residential Property in Ireland, whether owner-occupier or landlord will have to pay the tax.

Revenue will provide owners will an initial estimate of  their property tax but it is up to each owner to decide on the actual valuation of their property and pay the tax owing.  In fact, Revenue can pursue individual owners for under-payment of the tax, even if the owner has paid the amount that has been recommended by Revenue.  Property owners are expected to take into accounts factors which may affect the value of their property, such as the state of repair, home improvements, extensions etc.  The tax is calculated at 0.18% of the value of the property and only half the annual tax is due for 2013, with the full year’s tax due in 2014.  Revenue have referred property owners to the Irish Property Price Register at www.propertypriceregister.ie to assist them in valuing their properties.

Properties valued below  €1m, will fall into market value bands of €50,000, i.e. €100,001 – €150,000; €150,001 – €200,000 etc. The tax is calculated at the mid-point of each band, so two properties valued at €165,000 and €195,000 respectively, will both pay €157 in property tax this year, and €315 in a full year (2014), which is 0.18% of €175,000.

The market value of your property on 1st May 2013, will form the basis for the property tax due for 2013, 2014, 2015 and 2016.  Property owners do not have to take into account any subsequent improvements to their property or any changes in market value up to 2016.  Revenue will be issuing guidelines to property owners on how to value their properties and have said that if owners follow the guidelines honestly, they will accept owners’ property value assessments.

If you complete your return online, you have until 28th May 2013 to do this but paper returns must be submitted no later than 7th May 2013.  The correspondence from Revenue will give you a Property ID and PIN, to enable online submission.  You will also need your PPSN.  There will be a number of payment options, from single payment option, credit/debit card, salary/occupational pension deductions or deductions at source from social welfare payments. A single payment will be debited from your bank account no earlier than 21st July 2013.  Installment payments through Salary/Occupational Pension deductions will commence in equal amounts from 1st July 2013, and direct debit installment payments will commence on 15th July 2013.  Whatever payment option you choose will continue for 2014 and subsequent years, unless you advise Revenue that you wish to change your payment method.

There is an article in today’s Irish Times about how apartment owners’ are becoming more involved with the management of their developments, since the introduction of the Multi-Unit Development Act (MUD) last year.

Following years of mismanagement by some Property Management Agents, in which property owners saw costs rise out of control, Property Owners are each entitled to one share of the Owner’s Management Company (OMC), under the new MUD Act.  This has led to property owners becoming more involved in the running of their developments by appointing their own agent and re-tendering for maintenance services, such as cleaning, gardening etc and thereby reducing their costs, and each owners annual service charge.

At SCK Group, along with our partners in Pinnacle Property, we are already working with a number of OMC’s in developments around Ireland, where we undertake some or all of the services required, depending on the individual requirements of each OMC.  For example, we can undertake everything from maintenance, service charge collection, accounts etc or if the OMC wants to retain some of these functions itself, we can offer a more limited support service such as service charge invoice/statements, budgeting and general advice on property management.

http://bit.ly/SGStoV

 

Many landlords may be worried following recent reports that banks (EBS, AIB & Bank of Ireland), may attempt to collect rental income directly from tenants for those properties where the landlord is in arrears on mortgage repayments.  A report in today’s Irish Times points out that there may be some legal difficulty in this regard.  Also, the banks appear to be to be keen to stress that this will not apply to small investors.  It seems that the bank is targeting those landlords, some who have moved abroad, who use their rental income for other purposes and have allowed arrears to build on their buy-to-let mortgages.

At SCK Group we have been helping landlords maximise their rental income through Rent-Monitoring and where properties are difficult to let because they are in bad repair, through our Property Refurbishment Scheme.  We also negotiate with lenders on behalf of landlords.

http://bit.ly/MOmJLS

 

In yesterday’s Sunday Business Post, some ideas for reducing your tax bill are listed (see below).   We are available to offer you additional advice in any or all of these

Tax Saver Commuter Tickets – for employees

Rent a Room Relief – Rental income of up to €10,000 allowed tax free

Pension Contributions

Rent Relief – if you are paying rent for private rented accommodation

Medical expenses – allowable at the standard rate of 20%

Work expenses- flat-rate expenses which are allowable for certain categories of workers, medical, architects & others

Film Finance – Section 481 fax relief for financing a film

Invest in a business – EII scheme allows up to 41% tax relief for investment in SMEs

Tuition Fees – tax relief available on college education fees

Bike-to-work scheme – employees can benefit from tax relief on buying a bicycle

Mortgage interest tax relief

 

As reported by Dan O’Brien in yesterday’s Irish Times, a paper published by the ESRI on the residential property market, based on census data, found large differences in the stock of unoccupied homes in urban and rural areas. The conclusion is that there is likely to an increase in demand to buy houses in urban areas, leading to an increase in prices.

Of greater interest to landlords, is the indication in the report that rents in urban areas will rise as a result of significant net immigration in the period to 2015.  Despite what we were led to believe about foreign workers returning home as a result of the downturn and also our own young people leaving Ireland, it appears now that while large numbers of young Irish people emigrated, an even greater number of young foreign nationals came to Ireland, leading to net immigration of 50,000 for the period 2006-2011.

In addition, there has been a dramatic increase in the number of households in private rented accommodation in the 5 years to 2011. This may be as a result of a number of factors, i.e. a move away from the Irish tradition of home-ownership, expectation that house prices will fall further, lack of credit, lack of certainty re employment etc;   but the report also concludes that renting is better value than buying, with 32% of households in Dublin city in rented accommodation.

With many landlords being ‘squeezed’  in recent years as a result of falling rental incomes and increased costs as a result of property taxes and other costs, even a small increase in rents has to be good news.

Yesterday, The Sunday Business Post listed some websites, designed to save you money.  Here are some of our favourites:

www.bonkers.ie compare energy prices

www.pumps.ie find the cheapest petrol stations

www.hia.ie compare Health Insurance plans

www.comparetravelinsuanceireland.com for travel insurance comparisons

www.callcosts.ie compare mobile phone costs

www.skyscaner.ie compare airline costs

SCK Group • PSRA Licence No. 002859
Seamus C. Kane T/A Seamus C. Kane and Associates is regulated by the Central Bank of Ireland
Seamus C. Kane T/A SCK Financial Services is regulated by the Central Bank of Ireland