My wife and I are in the fortunate position to own two houses, one in Ireland and one abroad (within the EU). We own both without mortgages. We have several other investments, mostly rental property. We are in our mid-70s, with grown-up children and grandchildren. While none of our family is dependent on us, we are considering liquidating our assets and sharing them among our children when we can have the opportunity to see them enjoying the “spoils”. We would plan to retain sufficient funds for our upkeep. My question is, if we buy and retain just an apartment in Ireland that we would rent out, would we be able to ask tenants to leave if we return to it so that we could live in it?
The question you present is pertinent because it addresses the issue of tenure, which really is the elephant in the room when discussing property legislation in Ireland today, writes Kersten Mehl. One has to be mindful at the outset therefore that the landlord/tenant landscape is evolving and that legislation could be subject to rapid change. Indeed, you might find it has changed by the time you return to Ireland!
Under present legislation there is no issue with giving notice to a tenant on a Part 4 lease should you require possession to occupy same. Notice to Terminate in order to occupy same is based on how long the tenant has lived in the property. Minimum notice is 90 days if the tenants are there for less than one year and the notice period extends up to 224 days depending on how long the tenant has been in occupation. So, it is immediately apparent that there is a time factor in gaining possession of your property. These notice periods have been constantly extended since amendments were introduced to the 2004 Tenancies Act in 2015. To date, there have been at least five amendments since 2015.
While the intention of these amendments was to slow the growth of rent inflation, I would strongly argue that it has had the opposite impact on the tenancy market, ie reduced supply and increased rents. While it may appear at first glance that I am not addressing your specific question, I am addressing the approach of the Dáil to landlords and their rights as I believe this is highly relevant to the question you have posed.
A leading politician has stated both in the Dáil and in a national newspaper article that “we need a ban on evictions where a landlord is selling. If the landlord is selling, let them sell, but with the tenants in situ”. Now the dilemma here is, if the Dáil legislates that any landlord with a sitting tenant must sell with the tenant in situ then in reality, it will be unable to effect different legislation for a landlord who wishes to seek possession to live in same. Why? Because if this legislation was implemented the landlord would then just issue a notice for terminating a tenancy for owner or family member to occupy same for a certain period and then sell it.
My client base includes a cohort of owners who have purchased properties in the hope that as they advance in years and wish to downsize, they will occupy these properties. There is a similar cohort of families who go abroad to advance their careers and rent their homes in the expectation of returning to same. The cohort of landlords in this category will disappear quickly if these proposed legislative changes gain traction.
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I also feel that serious constitutional issues may arise from both the 2016 and 2019 amendments if the proposed legislation outlined above were to come into force. Nonetheless, this would not prevent the Dáil from introducing legislation and subsequently awaiting a constitutional challenge.
I myself am in my mid-60s, so I understand where you are coming from and have pondered this question myself in recent times. I feel you have three options: purchase and leave it vacant until you need to occupy same, do not purchase, or purchase and let with the expectation that you can gain possession should you want to live in same.
Given the anti-landlord environment that I believe currently exists, I feel you are rolling the dice with the latter option. I personally would not buy an apartment and let it in the hope of living in it at some future point as I believe on balance that elected representatives are signalling that they intend to pass legislation which will undermine the right of a landlord to reclaim their property with vacant possession.
- Kersten Mehl is a chartered residential agency surveyor and member of the Society of Chartered Surveyors Ireland, scsi.ie