Repair and Leasing Scheme

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.

However, under a pilot expansion of the scheme, property owners of certain categories of buildings do not have to meet the requirement of being unable to afford or unable to fund the repairs. This applies to the following categories of properties:

• Vacant commercial units
• Vacant units associated with a commercial unit, for example, a flat over a shop
• Vacant institutional buildings
• Unfinished developments, which have been vacant for a significant amount of time

If your vacant property is suitable for social housing, the cost of necessary repairs is paid 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.

There is an FAQ with more information about the scheme on vacanthomes.ie.

If you notice a vacant home in your area, you can report this to your local authority using the online form on vacanthomes.ie. The local authority will investigate and, if appropriate, work to bring the vacant home back into use.

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.

What repairs are needed?

If the property meets requirements, 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:

• Be in good structural condition and subject to inspection by the local authority or AHB
• Comply with the minimum standards for rented houses
• Have a Building Energy Rating (BER) certificate

All properties must be furnished and include certain appliances. There is more detail about this in the vacanthomes.ie FAQ page 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.

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:

To agree to 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 vacanthome.ie FAQ page on 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 term of a direct lease agreement as long as you transfer the lease agreement to the new owner and notify the local authority or AHB in advance.

The maximum repair cost under the scheme is €80,000 per house or apartment including VAT. 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 most direct leases this is 80% of the current market rent. However, it is 85% for apartments with a significant service charge and 70% for properties under the pilot scheme.
• For RAA’s it is 92% of the current market rent or 95% for apartments with a significant service charge.

Rent reviews will usually take place every 3 or 4 years.

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