I am about to become a landlord for the first time although I never intended to be one. Due to negative equity I am moving from a one-bed apartment to a three-bedroom semi-detached home. Can you advise me of what I need to know and also my obligations and responsibilities?
You are not alone in becoming an unintended landlord and there is much to consider in your new role to ensure that you meet your responsibilities and obligations from a legal and tax perspective. You should seek tax advice in relation to declaring your income for tax purposes, and in addition to being taxed on the rental income you are likely to have additional costs including the local property tax and the Private Residential Tenancies Board registration fee.
First, you should ensure your property meets all of the minimum standards: for information on this see citzensinformation.ie) .You should also ensure that it is furnished to the appropriate standards. Next you should draw up an inventory of contents and I would suggest that you discuss with your solicitor drafting a lease which would normally last for six months to a year.
Finding suitable tenants is the key aspect of the process and you should market the property well. Take good photos and prepare a full description of the property and advertise it online using one of the portals.
Carefully check the landlord and employment references of prospective tenants. It would also be advisable to seek a deposit from the tenant which would typically equal a month’s rent.
Once you find suitable tenants, you then need to sign the lease and register with the PRTB. You should have instruction manuals and keys for the tenants. Next you need to change the utilities into the tenants’ names and it is a good idea for them to set up a standing order for the rent each month.
It is important that you are aware of your responsibilities as a landlord and these will be set out in the lease agreement. I would also advise you to consult the PRTB website on this. If you decide to manage the property yourself, I would advise you to set up a quarterly inspection. You will also need to respond promptly to issues that may arise from the tenant.
If you are not comfortable with undertaking the letting and management yourself, use a letting and management agent (ensure they are licensed by the Property Services Regulatory Authority and, ideally, are members of one of the professional bodies). The agents’ fees are tax deductible.
Gerard O’Toole is a chartered surveyor and chairman of the western regional branch of the SCSI