Repair and Leasing Scheme

Introduction

A new Repair and Leasing Scheme has been developed to bring vacant properties into social housing use. The scheme is aimed at owners of vacant properties who cannot afford the repairs needed to bring their property up to the standard for renting.

If your vacant property is suitable for social housing, the cost of necessary repairs is met up-front by the local authority or an approved housing body (AHB). You then lease the property to the local authority or AHB, who will make it available for social housing. You will get an agreed lease payment from the local authority or AHB and the value of the repairs will be gradually offset against this lease payment over a specified period.

A pilot was launched in Waterford and Carlow in October 2016. The scheme is gradually being extended to all local authorities. Read more in this press release and in these FAQs (pdf).

Rules

Properties suitable for the scheme

The property must have been vacant for at least 12 months before being submitted for the Repair and Leasing Scheme. You will need to provide proof that it has been vacant for this time.

There must be a social housing demand for the property and it must be assessed as being viable to provide social housing.

Repairs required

If the property meets the above suitability requirements, staff of the local authority or AHB will inspect it and provide you with a checklist of the works that are necessary to bring it up to the standard that they require. These requirements may vary, but as a minimum each property must:

All properties must be furnished and include certain appliances. Market rent is typically agreed on the basis of a furnished property. There is more detail in the FAQs (pdf) on the scheme.

Agreeing the lease

You will have to prove that you own the property and that you are tax-compliant. You should consult with your finance/mortgage provider and get their consent (if required) before entering into the leasing arrangement.

You and the local authority or AHB will sign an Agreement to Lease, indicating your agreement to the length of the lease arrangement, the market rent of the property and a schedule of the works required. You will also agree how the cost of the works will be recouped through the lease payments.

The minimum lease term is 10 years, but it can be 15 years or 20 years, depending on the cost of the works. The lease payments will be based on the rates for social leasing, which are set at 80% (85% for apartments) of the current market rental rates in the area. There will be a further adjustment to the lease payment to offset the cost of the repair works until it has been repaid.

Arranging the repairs

You can arrange a contractor yourself to carry out the repairs. If you are not in a position to do this, the local authority or AHB can engage a contractor instead. You will need to give formal written permission to the local authority or AHB to arrange for works to be done on the property.

If you are arranging a contractor yourself, you must list out the works to be done and get a quote from the contractor. This must be agreed with the local authority or AHB before the work starts. The contractor must be tax-compliant and be able to provide evidence of this on request.

When the work is finished, you should get an invoice from the contractor and give it to the local authority or AHB, who will arrange a site visit to check that the work meets the required standard.

If all is in order, the local authority or AHB will pay you the agreed amount to settle the contractor’s invoice. You will need to provide a receipt from the contractor.

Repaying the cost of repairs

The cost of the repairs will be offset against the agreed lease payment until the value of the works is repaid. The local authority or AHB will agree with you what the appropriate offset period will be in your case. There are several ways of doing the offset - for example, through a reduction over a term that is scaled against the duration of the lease, as in the table below.

Sample arrangement
Cost of repairs Minimum duration of lease Offset to be cleared by
Up to €10,000 10 years Year 8
Up to €20,000 15 years Year 12
Over €20,000 20 years Year 15

The lease agreement will contain a clawback clause to ensure that the full value of the works will be repaid if the property becomes unavailable during the agreed period.

Landlord/tenant arrangements

The properties acquired under the Repair and Leasing Scheme will be offered to households who have been approved by the local authority for social housing. Tenants will sign a tenancy agreement with the landlord, which will be the local authority or AHB. The landlord will manage the property and provide support to its tenants. These properties will not be available to tenants on the Housing Assistance Payment (HAP) or the Rental Accommodation Scheme (RAS).

Ongoing maintenance, repairs and charges

The local authority or AHB is responsible for internal maintenance and repairs during the term of the lease. At the end of the term, the property will be returned to you in good repair, except for fair wear and tear.

You are responsible for structural insurance, structural maintenance and structural repair. You are also responsible for paying management company service charges, if applicable, and any other charges for which you are liable, such as Local Property Tax.

You will accept that furnishings and appliances may not be returned at the end of the term. However, any furniture and appliances that are left in the property will belong to you. There is no requirement to have them in the same condition as at the start of the lease.

Selling the property

You can sell the property during the lease term. You must notify the local authority or AHB in advance and you must transfer the lease agreement to the new owner.

In some cases, the property owner may agree with the local authority or AHB to include an ‘option to purchase’ as a condition of the lease. This gives the local authority or AHB the option to buy the property during the term of the lease. Such a condition can only be included if both parties agree.

Rates

The maximum repair cost allowable under the scheme is €40,000. This can include the cost of required furniture, as agreed with the local authority or AHB.

The cost of the repairs will be offset against the agreed lease payment until the value of the works is repaid. The local authority or AHB will agree with you what the appropriate offset period will be in your case.

The amount payable to you will be agreed through negotiation with the local authority or AHB. The maximum to be agreed will be 80% (85% in the case of apartments) of the current market rent. Reviews will usually take place every 3 or 4 years.

Where to apply

If you are interested in the Repair and Leasing Scheme, you should contact your local authority for information.

Page edited: 27 April 2017