Repair and Leasing Scheme

Introduction

The purpose of the Repair and Leasing Scheme is to bring vacant properties in need of repair, back into use for social housing. The scheme is aimed at owners of vacant properties who cannot afford the repairs needed to bring their property up to the standard required to rent it out.

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

The Department of Housing, Local Government and Heritage has published these FAQs about the scheme.

Rules

What properties are suitable for the scheme?

Certain conditions must be met for a property to qualify for the scheme.

  • The property must have been vacant for at least 12 months before you apply to the Repair and Leasing Scheme. You will need to provide proof that it has been vacant for this time.
  • There must be a demand for social housing in the area.
  • The property must be assessed as being suitable to provide social housing .

Repairs

If the property meets these requirements, staff of the local authority or AHB will inspect it and provide you with a checklist of the repairs that are necessary to bring it up to the standard required. These requirements may vary in each local authority. But when the repairs are completed, all properties must:

All properties must be furnished and include certain appliances. There is more detail about this in the FAQs on the scheme.

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.

Direct lease arrangement or rental availability agreement

Under the Repair and Leasing Scheme you can agree to make your property available to the local authority or AHB for social housing through:

  • A direct lease arrangement, or
  • A rental availability agreement (RAA)

The main difference between the two options is that under a lease agreement the local authority or AHB is the landlord and looks after the tenant and the maintenance of the property. With an RAA the owner is the landlord and has these responsibilities.

The two options also have different maximum terms and rents available. Below see a table outlining the main differences between the options:

Direct lease agreement Rental availability agreement (RAA)
Term 5 – 25 years 5 – 10 years
Rent 80% of current open market rate less RLS offset for the repairs

(85% for apartments)

92% of current market rate less RLS offset for the repairs

(95% for apartments)

Cost savings • No rent loss due to vacant periods

• No rent arrears

• No letting fees

• No advertising costs

• No RTB tenancy registration charge

• No day to day maintenance costs

• No rent loss due to vacant periods

• No rent arrears

• No letting fees

• No advertising costs

Tenant managment Local authority or AHB is responsible and they are the landlord Property owner is responsible and is the landlord
Property maintenance Local authority or AHB is responsible Property owner is responsible

To agree either of these arrangements, you will have to prove that you own the property and that you are tax-compliant. You should consult with your finance or mortgage provider and get their consent before entering into the scheme (if applicable).

Agreeing a direct lease agreement

If you decide to lease your property directly to the local authority or AHB you will sign an Agreement to Lease. This indicates that you agree to the length of the lease, 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.

Agreeing a rental availability agreement

If you decide to make your property available using an RAA, you will sign an availability agreement with the local authority or AHB. This states that you have agreed to make your property available for a specific period, to people nominated by the local authority to be your tenants. And that you will maintain the property in a lettable condition.

Repaying the cost of repairs

The cost of the repairs will be offset against the agreed rental 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 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. Further information about the offset period and clawback clause is available in the FAQs about the scheme.

Landlord and tenant arrangements

When the repairs are completed, your property will be offered to households who have been approved by the local authority for social housing. If you have agreed a direct lease for your property, tenants will sign a tenancy agreement with the local authority or AHB. The local authority or AHB (acting as 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).

If you have made an RAA with the local authority or AHB, the tenancy agreement is between you, (the property owner) and the nominated tenant. You are the landlord, and you have landlord’s rights and responsibilities.

Ongoing maintenance, repairs and other charges

Certain responsibilities apply whether you have agreed a direct lease or an RAA with the local authority or AHB. As the owner, you remain 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.

If you have agreed a lease agreement the local authority or AHB is responsible for internal maintenance and repairs during the term of the lease. And at the end of the term, the property will be returned to you in good repair, except for fair wear and tear.

However, in the case of an RAA agreement, you will manage and support the tenants and maintain the property internally for the term of the agreement.

Selling the property

You can sell the property during the RAA or direct lease term. You must notify the local authority or AHB in advance and you must transfer the RAA or 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 under the scheme is €60,000. 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 rental 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 paid to you will be agreed through negotiation with the local authority or AHB. The maximum to be agreed will be a percentage of the current market rent. For direct leases this is 80% (85% in the case of apartments) and for RAA’s it is 92% (95% 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 more information.

Page edited: 20 November 2020