Banks become Landlords
Out of 150,000 buy-to-let mortgages, nearly 1 in 5 rental property investors is more than 90 days behind on their repayments. With banks threatening to take action against troubled landlords, The Consumer Show investigates what can happen to tenants when banks become their landlords.
The Consumer Show reporter, Tadhg Enright said: "Pay your rent on time and keep your house or flat in reasonable order; that's the tenant's part of a rental deal. But we have seen how tenants can suffer when their landlords have fallen behind on their mortgage repayments."
The latest figures from the Central Bank of Ireland say that as of December 2012, there were 150,344 buy-to-Let mortgages in Ireland with a combined value of ¤31.1billion. Of these nearly 1 in 5 is more than 90 days in arrears.
Michael Dowling of Abacus Finance told The Consumer Show: "Legally a bank can appoint a receiver after 90 days. Essentially we have 28,000 buy-to-let properties that could be subject to this rent receivership process".
The Consumer Show met three tenants whose homes were taken over by receivers:
Care worker Kevin McGuinness was renting with friends in Blanchardstown when he got a letter telling him that a receiver was taking over the property and that he had seven days to contact the receiver before they would change the locks. Kevin contacted the receiver to say was happy to pay his rent to them, and requested a lease. When the receiver insisted the rent be paid before they supplied a lease, Kevin walked away from the property.
Jennifer McCausland gave notice on the apartment she had been renting the day before her landlord went into receivership. When Jennifer contacted the receiver about getting back her ¤800 deposit, she was told it would be not be repaid that she was now an unsecured creditor of her previous landlord.
James Manning had rented his apartment for two years before a receiver took over. When his entitlement to rent allowance needed to be renewed, the receiver's agent refused to complete the necessary paperwork as there were complications with his tenancy. James was unable to pay his rent and the agent later issued him with a seven day notice to vacate the property.
Bob Jordan, chief executive of the housing charity Threshold told The Consumer Show: "There is a historic attitude in Ireland that people living in the private rented sector are second-class citizens who will move on at a moment's notice if you put enough pressure on them. "We are very worried that receivers would behave in this pretty high-handed way with vulnerable tenants in the private rental sector."
Barry Cahir, Chairman of the Irish Society of Insolvency Practitioners, told Keelin that those who do not receive their deposits back from receivers are very unlucky and that the vast majority of tenants do have their deposits returned. Barry explained that Jan O'Sullivan TD, Minister of State with responsibility for Housing and Planning, has indicated that she is going to set about publishing guidelines which should provide a more seamless transition from landlord to receiver.
PRTB Checklist for Tenants who have been notified that a Receiver has been appointed to their property: