Evanna Craig likes the spacious three-bedroom apartment on Pembroke Road that she shares with two housemates. Together they pay €2,495 a month for it.
Their landlady raised the rent by 25 percent just before the 4 percent rent-increase cap took effect in December, which was bad enough.
But now the landlady has decided to refurbish the place, so she’s told Craig and her flatmates that they’ve got to leave.
“Because there’s so little supply, I’m pretty sure I’ll be in a much smaller place wherever I go next, or have to move way out of the city … or spend a huge proportion of my income on rent,” says Craig. “It’s really depressing to be honest.”
The Irish Property Owners’ Association says properties that have been substantially refurbished can be exempted from the rent-increase cap. And companies that specialise in refurbishments say they’ve had an increase in business recently.
Gavin Elliot, a legal officer with Threshold, says the housing charity has been getting an increased number of calls from people who are being evicted on the grounds of “substantial refurbishment”.
But Threshold has a different interpretation of the law than the Irish Property Owners’ Association.
Elliot says landlords do have the right to evict tenants to perform “substantial refurbishments”. But the tenant has the right to resume their tenancy after the refurbishment, and in his view the property is usually still subject to the rent-increase cap.
Evicted
Lisa Feay also says she was kicked out of her home on the grounds of substantial refurbishment.
Feay was paying just €725 for a one-bedroom city-centre apartment on Castle Street near Christchurch when the rent-increase cap took effect in December.
In March, she got an eviction notice and had to leave the little apartment where she and her partner had lived for six years. They had to move all the way to Drogheda to find an apartment they could afford, she says.
Everyone in her block was evicted on the grounds of substantial refurbishment, Feay says. Now, one of the apartments in her former building is listed on Booking.com at €209 per night.
Feay’s former landlord, Paul O’Brien, says he isn’t involved in that – that it is his tenant sub-letting. (Apartments used full-time for short-term lets need planning permission.)
“All the units are being substantially refurbished,” says O’Brien. He says he only purchased the flat where Feay lived in March, and immediately served notice to Feay and the other remaining tenants.
Desperate to avoid becoming homeless, Feay spent eight hours a day for three weeks applying for hundreds of apartments, she says. She got only one response: for the flat in Drogheda.
“I don’t live in Drogheda because I love Drogheda. I’d never even been here before,” she says. “I’ve no friends here, I’ve no contacts here.”
Feay is 55 years of age, from America and has been living in Dublin for eight years. “I’ve an apartment that I can afford and we are just going to have to start over,” she says.
Making Improvements
If a property needs refurbishment, of course it is appropriate that the landlord do it up, and increase its value if she or he can, says Fintan McNamara of the Residential Landlords Association of Ireland.
“When you take on properties you take on loans … there are an awful lot of taxes and charges,” he says. “The returns aren’t really that great.”
He says landlords pay property tax, income tax, PRSI, and USC, and can only offset part of the mortgage repayment against it.
Annmarie Mathews, owner of Mathews Property Management, a refurbishment and lettings company, says that there seems to have been an increase in refurbishment work recently: “In the past 12 months, it’s been more and more popular.”
She says the properties they are involved in doing up are mainly mid-market properties, rather than high-end. Short-term lets are also getting popular; landlords can achieve a higher rent that way, she says.
However, in her view, there need to be more refurbishment works done in many cases; lots of properties are rundown. “I would say that there isn’t enough of it. There are a lot of properties that need to be refurbed,” she says.
In 2016, Dublin City Council’s environmental health unit inspected 1,751 private-rented units, and found that 1,388 didn’t meet the minimum standards in place at the time.
Different Interpretations
Feay’s eviction notice was on the grounds of “substantial refurbishment”. But different parties have different opinions on what should happen next in cases such as hers.
Her landlord, O’Brien, says he will offer her the option to move back into the unit once the refurbishment is complete, but her rent will be set at the market rate – not limited by the rent-increase cap.
This is in line with guidance from the Irish Property Owners’ Association that says properties that have been substantially refurbished can be exempted from the rent-stabilisation measures.
“A ‘substantial refurbishment’ is not defined in the (Residential Tenancies) Act but it must be a significant change to the dwelling resulting in an increased market value of the tenancy,” say the guidelines.
McNamara of the landlords association agrees with that take on the rules. “Those who substantially refurbish properties would not be subject to the rent cap as they would have changed the value of the property,” he says.
But what exactly constitutes substantial refurbishment “will really be decided by an adjudicator or a tribunal”, he says.
Elliot of Threshold, meanwhile, says that substantial refurbishment is not enough to exempt a property from the rent-increase cap. Only those who “substantially change the nature of the property” can escape the 4 percent cap, he says.
“Some landlords seem to be trying to conflate substantial refurbishment with substantially changing the nature of their property,” he says.
It’s impossible to know the exact difference is between the two, however; there are no definitions of “substantial refurbishment” or “substantially changing the nature” of a property in the act, he says. So it is up the Residential Tenancies Board (RTB) to decide where the line is.
But Elliot says that “substantially changing the nature of something implies that you are changing it in a very fundamental fashion”.
Evictions on the grounds of refurbishment have likely increased since the rent cap was introduced last December, Elliot said.
The rationale for allowing landlords to evict tenants to refurbish is to improve the stock over time, he says. “It is to allow them to modernise, but it’s open to abuse in a big way.”