New “Service Charge”

The majority of households will have to pay a new combined water and property charge of approximately €100, though the exact details are yet to be announced. As reported in the Irish Independent, the charge could range from €100 to €200 but the more likely outcome is closer to €100 with a few exemptions. For those in the rental sector, it will be landlords who foot the bill as the charge applies to property owners. However it is expected that they will pass on the charge to tenants through increasing the rent. Whether or not this is a good idea is up for debate as it may mean that those on lower incomes or social welfare will not be able to afford housing. Anyone who doesn’t pay will be penalised. People may be wondering why they have to pay another tax, especially after the renegotiation of the EU-IMF bailout deal. Transport minister Leo Varadkar has said that regardless of any crisis, our budget deficit still has to be reduced. Grants to local authorities and councils to provide services such as sewerage and road maintenance will be cut with the new tax filling the resulting gap. This is a precursor to a full property tax and water charges. It will take years to roll out, but water meters will have to be installed in every house. There will be a basic amount free but if you go over that you will have to pay a charge. As for the property tax, it will be based upon the house value or its size. The opposition are expected to challenge these measures.

Inventories and Their Importance

An inventory is a log of the property, the contents and the condition of them. A landlord withholding a deposit to cover damage costs is the most frequent cause of a dispute so it is of great importance to have a fully up to date and comprehensive inventory at the beginning of a tenancy which can be referred to at the end of the tenancy if problems arise. In fact, that is where their power lies. They reduce the occurrence of disputes and for any ones that do happen, inventories can speed up the resolution process and reduce costs. Once the beginning inventory is comprehensive enough it should be easy to spot damages or anything that goes beyond normal wear and tear.

Wear and tear is the main stumbling block when it comes to inventories. It’s a grey area and is difficult to define. The folks at irishlandlord.com look towards a legal definition of “normal wear and tear occurs where deterioration of the subject matter takes place over a period of time due to ordinary and reasonable use of the premises”. That in itself is fairly vague. What constitutes ordinary and reasonable use? Common sense should be enough to get around this obstacle. If a good quality carpet was laid down just before a yearlong tenancy began and by the end of the tenancy the carpet looked like it had been there for five years, then withholding the deposit would be fair. Most wear and tear debates can be avoided by having a detailed description of the condition of the contents with many high quality photographs as evidence.

DIY or get a professional?
There are two paths a landlord can choose from: they can either do the full inventory themselves or hire a professional inventory clerk. We’ll look at the DIY option first.

• Patience is the first thing you need when carrying out an inventory. A proper inventory takes a lot of time to complete. 
• Next, you need to have a clear and methodical process to ensure everything is noted correctly and can be easily checked at the end of the tenancy. For example: take one room at a time. Note the main items in the room first and their condition. Be sure to note if there’s currently any damage or if an item is brand new. Then list the smaller items e.g. pictures and their condition. 
• Be both detailed and realistic in your descriptions e.g. say one brown leather two seater sofa with scuff marks on the two front legs, instead of one sofa. 
• Take photographs (preferably with a digital camera) of the rooms as a whole from multiple angles as well as of individual items. 
• After the inventory is complete, walk around the property with the tenant and agree the descriptions, ensuring that the tenant checks and signs the inventory list. Sign it yourself, keep the master list and hand over a copy. 
• If any changes are made e.g. new curtains, an amendment should be made to the inventory. 
• While this option is cheaper, it does involve the risk of bias. It may be unintentional but the risk is still there so be mindful of it.

Now for the professional inventory clerk option.

• While popular in England, dedicated inventory companies haven’t taken much of a foothold in Ireland as yet although there are some companies who provide this service. (Dublin Letting is considering branching out in this area so keep an eye out for future deals!) 
• Generally these companies will take over the landlord’s role by doing a full inventory, walking around with the tenant and reaching an agreement and at the end of the tenancy they’ll carry out a full analysis of the original report and compare it to the current condition. 
• They also carry out inspections throughout the tenancy and adjust the inventory when needed. This has the benefit of keeping things up to date to prevent disputes at the end of the tenancy. 
• As they are trained for the job you can expect the final report to be well structured and very detailed with possibly more observations, more so than if it was just an ordinary landlord conducting it. 
• Also, a third party will more likely be impartial so the bias pitfall is easily avoided and better judgement calls relating to wear and tear can be made.

The decision of which option to choose is a matter of preference. Landlords who have the time, patience and ability to be methodical, concise and realistic will probably do it themselves but those who live a distance from the property or who just don’t want to go through the hassle of it all will probably choose the dedicated service. Or if the landlord is confident that the letting agent will do a good enough job then that will suffice. As mentioned previously, Dublin Letting is looking strongly into this and may be offering it as a separate service so check back here for future updates!

*Information sourced from irishlandlord.com, propertyhawk.co.uk and upad.co.uk

Mould Growth

While generally an all year round problem, mould growth can become more of a problem towards the autumn and winter months so now is the best time to start prevention measures. Before we get into those, it’s important to know the science bit about how it grows and what exactly mould is. Mould is a type of fungi that occurs completely naturally in nature and its main function is to help with the decomposition of organic matter such as leaves. Going by that definition, it obviously has no use indoors. They reproduce through spores that float around in the air and only grow into visible colonies when they spend enough time on a suitable surface containing moisture and nutrients.

Materials that are used in the building of most homes like plywood and carpets are fantastic for mould to take hold of so the key to prevention is moisture. Excess moisture appears after flooding, plumbing leaks, buildings that are too airtight so moisture can’t escape, not enough ventilation near ovens and showers resulting in condensation and general high humidity levels. Condensation also occurs when air gets colder and it loses its ability to retain moisture.

The most common one out of those for Irish homes is probably condensation. It’s an internal problem arising from moisture that can’t escape. To prevent condensation and in turn contribute largely to the prevention of mould you should:

• Have a good ventilation system in place – extractor fans in bathrooms, exhaust fans in cooking and laundering areas and open windows 
• Dry windows and windowsills when you notice condensation forming 
• Insulate cold surfaces well in order to keep central heating low to stop build up on windows, walls and floors 
• Try to keep carpets and rugs away from water sources like sinks and showers 
• Dry washed clothes outside as much as possible 
• Air cupboards and wardrobes frequently 

If mould is already a problem in the home, the best thing to do is get rid of what’s already there and then take preventative measures. Mould killing sprays can be bought in most local supermarkets and these are effective in removing small growths, although a mixture of water and bleach can also help. If on walls or skirting boards, fungicidal paint can be used after the clean up to prevent a recurrence of the problem. For larger growths it is recommended to call a professional mould remover. Certain materials like insulation and carpets can’t just be treated, they need to be removed and replaced.

If you spot the beginnings of mould growth (black pinpricks) take action immediately. While not generally toxic, mould can be an irritant and can contribute to respiratory problems.

*Information sourced from the CDC, the Canadian Centre for Occupational Health & Safety, A Guide to Dealing with Mould and Condensation produced by Stockport Homes (it has some interesting illustrations showing how much excess moisture can be produced by ordinary activities), Dover District Council and general knowledge remembered from years of studying home economics and biology!

 

NPPR and PRTB News

Figures released over the weekend by the Department of the Environment show that NPPR payments have amounted to over €180m since its introduction in 2009. This is vastly greater than the €100m previously expected. Owners of approximately 320,000 second properties have paid up and will no doubt help local authorities to fund the various services they provide. They also have power to chase up payments by checking bills, and the voter and land registers. For those who like a bit of detail, the Irish Independent provides a breakdown of the figures.

• 2009 - 323,365 properties brought in €68.7m in tax 
• 2010 - €66.9m was paid on 320,766 properties 
• 2011- So far, €47.7m was acquired from 238,720 properties 
• All of that totals €183.5 million 

Not surprisingly, most of the second homes are in Dublin with the lowest amount in Monaghan

As expected, the crackdown on PRTB avoiders has begun. According to the Irish Times, the PRTB has written to 1400 landlords warning them that they will be prosecuted for not registering. Inspections of private rented accommodation will be able to be conducted thanks to the €4 million given to local authorities today. These inspections will cover areas such as sound structure, appropriate ventilation and heating etc. Signing onto the register will make inspections and regulation easier. So far, the PRTB has issued eight court summonses for later this month and have secured seven criminal convictions against landlords in the past six months so they are very definitely serious about it! 

Info sourced from the Irish Independent and the Irish Times. Articles can be found here and here respectively

Timely Reminders

End Date for NPPR Payments

As mentioned in a previous blog post, a tax of €200 needs to be paid on properties that are not a person’s main place of residence. This tax was due by the 31st of March but there is a 3 month grace period. That period ends today, June 30th. A €20 per month penalty will apply for all late payments so if you haven’t paid as yet you better do it quick!
There are exemptions from the tax, such as certain social housing and heritage buildings. The payment can be made online at www.nppr.ie

PRTB

Another quick reminder, this time about the PRTB. All residential properties must be registered with the Private Residential Tenancies Board, as must all changes in tenancies and tenants who have been renting for over 4 years must be re-registered. Registration is done through an application form (found online at prtb.ie or through your letting agency) and a fee of €90 has to be paid. If you’re not sure whether or not a property is registered, you can check on the PRTB website. It is of the utmost importance that you register as there is a major crackdown ahead. As reported in the Irish Independent, the State had paid more than €250m last year to unregistered landlords and it appears that this has helped to spurn on the action. Failure to register may bring about a fine of up to €3000, daily fines of €250 and/or 6 months imprisonment. The Revenue Commissioners are looking for landlords to confirm that they’re registered before they allow a bank interest deduction on the particular property so registering really is the best thing you can do.

Bullets on the Building Energy Rating (BER)

• The Building Energy Rating is a statement of the energy effectiveness of a building; the performance, the costs etc. It’s very similar to the energy ratings found on various electrical appliances. 
• The ratings are measured by BER assessors who have been specifically trained for the job. Landlords/building owners foot the bill for the cost of being rated and they must provide a BER certificate to potential tenants so they can take energy costs into account before renting. 
• The fee is determined by competition among assessors. 
• The cert is valid for 10 years unless significant work is done on the building that changes the energy performance during this time. 
• Rating process - the property is surveyed and things such as size, insulation, window types, ventilation, type of heating system etc are noted. Without getting too technical about it, figures are inputted into a formula and the calculation is done through software known as the Dwellings Energy Assessment Procedure. It checks that buildings are fully compliant with the Building Regulations. 
• If the dwelling receives a low rating, it’s not the end of the world. There are no penalties or fines, but a low rated home wouldn't be as attractive to potential tenants as a higher rated one. 
• To enhance the rating, there are a number of things that can be done. For example, extra insulation on the hot water cylinder and in the attic, double glazed windows, getting a regular boiler service etc. 
• A bit of digging around forums shows that the general opinion is that it’s a necessary evil. It can be a bit of a hassle but it is required by law, not just Irish law but by a European directive. 
• As with most things, shopping around for the best assessor is advised. Check their references as well as considering the cost. Finally, remember that FAQs are your friend. Find them here as well as copies of sample certificates, the register of assessors and other useful information.

*Information sourced from irishlandlord.com and the Sustainable Energy Authority of Ireland

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