Home Economics... Answering your property questions
Our property expert gives advice a house swap and what to do when a tenant carries out alterations without permission.
Question: My wife's niece lives in the old family home in Cork and recently got a promotion requiring a permanent move to Dublin. We had always intended to retire to Cork and I am coming up to that age now. Although our house is smaller, it's ideal for our niece and she is in favour of doing a straight swap. We have checked prices and there's very little in it. My wife is very keen on this also as she believes it's "less messy" than selling and buying on the open market. Is there any legal impediment to doing this?
Sinead replies: There is no problem in principle with doing a straight house swap, and the legal process is the same as any two unconnected parties buying and selling. However, you do need to keep things above board to show that they really are financially compatible properties.
Niamh O'Grady, lawyer with Mason Hayes & Curran says, "You will need to obtain formal written valuations for both properties and stamp duty will be payable by each party (at a rate of 1pc up to €1,000,000 and 2pc thereafter) on the value of the property being acquired. If there is a difference in the values then a monetary payment may be required to make up that difference to avoid it being treated as a gift and becoming subject to capital acquisitions tax.
"You will need to get independent solicitors to act for each of you and they will each need to satisfy themselves with the title of the properties being acquired. You should also arrange for structural surveys to be carried out so you are both satisfied with the state and condition of the property you are each acquiring. If there is a mortgage on either one, then the relevant lender should be consulted to ascertain its legal requirements and that mortgage may need to be transferred to the new property being acquired by the mortgagor".
Question: My tenant is leaving after a year's lease and although he kept it tidy and clean, he put up shelves, hung pictures and painted a wall a fairly garish colour for which he didn't ask permission. He says he has 'improved' it but I can't leave it like this. I'm very annoyed with him - what rights do I have to withhold his deposit and use it to pay for the work?
While you are within your rights to withhold the deposit if you believe the work you will have to do is necessary, you also have other options. Stephen Faughnan, Chairman of the Irish Property Owners' Association explains: "The deposit is held for damage above normal wear and tear. A tenant cannot alter or improve a dwelling without the written consent of the landlord. In this situation it would appear the tenant has breached the tenancy conditions.
"However, the landlord may accept the decoration and alterations in which case there is no difficulty. But generally properties in the private rental market are let in a neutral palette with general appeal. It may be that the colours chosen by the tenant and the shelving are unacceptable to you and you are therefore entitled to get the property back in the state in which it was let.
"You could give the tenant the option to do this or deduct the cost from the deposit to do it yourself. A compromise in a case like this may sort the matter out in a mutually acceptable manner".
The Ryan Review
Well, the Central Bank did what it said on the tin. Contrary to the miserable stream of evidence givers at the Banking Inquiry throwing up their hands in the air with a look of bewilderment at where it all went wrong, the financial watchdog bared its teeth this year and put the brakes on new mortgage lending.
However, with a moratorium on existing Approvals in Principle, it's only now that the effects are being played out in the market. The value and number of approvals fell sharply in April which has very little to do with the increase in property prices (0.6pc in the same period and 15.8pc year-on-year) and is the weakest since December 2013.
It has lots to do with trapped trader-uppers, now requiring 20pc equity before moving. First-time buyers are mostly okay and new applications continue strong. So far, so predictable.
What will be interesting is how the banks handle the 'discretionary' lending outside the new limits (15pc of new loans don't need to meet the criteria), and it may well be an X-Factor style button-pushing exercise to decide who looks and sounds to be the best risk.
Davy's has estimated that 28pc of mortgage loans in 2014 would have breached the limits had this year's limits been in place, so there is some shoring up to be done. With summer traditionally a slow time, banks are working harder at placing switcher business. Bank of Ireland, recalcitrant to cut rates, is aggressively going after fixed rates with a 0.3pc cut.