Are some landlords are passing up a great rental opportunity ?
Some of the best quality tenancies we have arranged have been to people on rent allowance and at present they are increasingly being passed over when it comes to landlords choosing between tenants.
Many landlords don’t want to enter into the HAP scheme or Housing Assistance Programme. Of course it is illegal to discriminate against tenants in receipt of rent allowance. However most rental listings now attract multiple interested parties and landlords can tend to choose tenants not on rent allowance. We regularly come across this scenario in our Clonakilty estate agency and since the HAP scheme came in, more often than before.
Strange because technically the HAP scheme/rent allowance should be attractive to a landlord. The council pays the landlord directly, every month, straight into their bank; the rent allowance limits are on a par if even exceeding current rental rates; tax relief is available on 100% of the mortgage interest as opposed to 75% for a private letting and the council encourages their tenants to stay in the rental property for at least 2 or more years.
Last year 33% of the 25,780 tenancies registered in County Cork were in receipt of some form of rent supplement. Recently increased maximum monthly rent limits for Cork County include up to €550 per month for a single adult, €900 per month for an adult with child and up to €950 per month for an adult or couple with 3 children.
Why landlords are not considering rent allowance
However landlords renting to HAP scheme qualifying tenants are required to produce a tax clearance certificate and other documentation that may not be required in a private letting situation such as bank statements, and proof of ownership. A Building Energy Rating Certificate (BER) is required. Rent payments are paid at the end of the month and in arrears, as opposed to the normal rent in advance. If the tenant falls behind in their calculated contribution to the council rent payments to the landlord can be interrupted. A contentious issue is the inspection that takes place within 8 months of the letting. This is a minimum rental standards inspection yet many houses fall short and the County Council may insist on a modifications (wall vents in some rooms, mechanical extractor fans in bathrooms/toilets and windows that can facilitate exit), which if not carried out will result in rental payments being suspended. Again this inspection can happen in a private letting rental but it is rare.
The HAP scheme has the potential to be very attractive to landlords and I believe the following suggestions would level the playing field between prospective tenants –
1 – Pay the rent monthly in advance, same as private lettings.
2 – Process the initial paperwork faster. In many instances t is taking too long for the landlord to get their first payment
3 – Grant a modification allowance to landlords for certain works in cases where the council require property modifications after their inspection. Or offer to pay for same and deduct from the rental payments over 12 months.
In this time of extreme housing shortage the county councils could be selling the HAP scheme to landlords and estate agents more effectively.
Martin Kelleher MPAV (REV) MCEI is a Clonakilty based Auctioneer & Recognised European Valuer. 0238859111 www.martinkelleher.ie