Residential Newsletter September 2012
Multi-unit Pre-63 Investment Properties
What is a pre – 63 property?
To qualify for a Pre-63 Declaration, a property must have been built and rented as bedsits before 1964, the year that planning development regulations came into effect. This is typically qualified in the form of an affidavit provided by the seller. The most common type of pre-63 properties in Dublin are red brick Victorian / Georgian houses which were divided up into traditional bedsits.
The Housing Regulations 2008 Act (Standards for Rented Houses) has updated the 1993 regulations and placed the obligation firmly on the landlord to provide tenants with habitable properties that are structurally sound, well maintained and properly heated.
The implementation of this Act will have major implications for the owners of Pre-63’ / bedsit type properties.
The requirements under the regulations are summarised below:
- Structural Condition:
All properties should be in a proper state of structural repair. This means essentially sound, with roof, floors, ceiling, walls and stairs in good repair and not subject to serious dampness or liable to collapse.
- Sanitary Fittings:
These should be provided within the habitable area for the exclusive use of the house. This will result in shared bathrooms traditionally provided in bedsits becoming outlawed.
A water closet with dedicated wash hand basin adjacent with a continuous supply of cold water and a facility for the supply of hot water and a fixed bath/shower with continuous supply of cold water and a facility for the pipe supply of hot water.
The shower/bath facilities are required to be maintained in good working order, have safe and effective means of drainage, be properly insulated and secured, have minimum capacity requirements for hot and cold water storage facilities and be provided in a room separated from other rooms by a wall and a door and containing separate ventilation.
- Heating Facilities:
Every room used, or intended for use by the tenant of the house as a habitable room shall contain:
Permanently fixed appliance(s) capable of providing effective heating, and suitable and adequate facilities for the safe and effective removal of fumes and other products of combustion to the external air.
The operation of any appliance installed shall be capable of being independently manageable by the tenant. This will result in the abolition of landlord regulated heating systems.
- Food Preparation, Storage and Laundry:
Each rented unit should have the following facilities for the exclusive use of that individual unit;
Four ring hob with oven and grill suitable facilities for the effective and safe removal of fumes to the external air by means of a cooker hood or extractor fan.
Fridge and freezer or fridge-freezer and microwave oven.
Sink with a piped supply of cold water taken directly from the service pipe supplying water from the public main or other source to the building.
A facility for the piped supply of hot water and an adequate draining area.
Suitable and adequate number of kitchen presses for food storage purposes.
Washing machine or access to a communal washing machine facility within the curtilage of the building.
A dryer, where the house does not contain a garden or yard for the exclusive use of that house.
All facilities shall be maintained in good working order and good repair, and responsibility for maintenance rests with the landlord. This will result in the improvement of hygiene standards in lower end rental units.
Every room used, or intended for use, by the tenant of the house as a habitable room shall have adequate ventilation.
All means of ventilation shall be maintained in good repair and working order.
Adequate ventilation shall be provided for the removal of water vapour from kitchens and bathrooms.
Every room used, or intended for use, by the tenant of the house as a habitable room, shall have adequate natural lighting.
Every hall, stairs, and landing within the house and every room used, or intended for use by the tenant of the house shall have a suitable and adequate means of artificial lighting.
The windows of every room containing a bath and/or shower and a water closet shall be suitably and adequately screened to ensure privacy.
- Fire Safety:
Each unit shall contain a fire blanket and either a mains-wired smoke alarm or at least two 10-year self-contained battery-operated smoke alarms.
Each self-contained house in a multi-unit building shall contain a mains-wired smoke alarm, a fire blanket and an emergency evacuation plan.
Emergency lighting, linked to the fire alarm system shall be provided in all common areas within a multi-unit building.
- Refuse Facilities:
The house shall have access to suitable and adequate pest and vermin-proof refuse storage facilities.
- Electricity & Gas:
Installations in the house for the supply of electricity and gas shall be maintained in good repair and safe working order with provision, where necessary, for the safe and effective removal of fumes to the external air.
Summary / Outlook
Landlords with properties requiring major capital outlay in order to comply with the incoming legislation may be reluctant to carry out such work, due in part to the lack of availability of finance and the interruption to their rental income while the refurbishment works are being carried out.
It is expected that many landlords are likely to take a “wait and see” approach to the implementation of the Act, particularly where finances are restricted or they are in negative equity.
According to a recent article in the Irish Independent on the 10th of July 2012 highlighting claims by the Irish Property Owners Association (IPOA) as many as 1,000 rental units may no longer comply with the law after the 1st of February 2013.
If the Act is strictly implemented it is possible that the market will see a significant increase of this type of property coming for sale particularly where landlords have owned the properties since the 70’s/80’s and are not in negative equity. Equally it will reduce the number of units available to rent.
If there is a sudden increase of Pre’63 properties coming to the market in 2013 it is likely to have a negative impact on sales prices. Where landlords opt to sell properties which are non-compliant, prospective buyers will expect the price to reflect the cost of refurbishment and the inconvenience of having no rental income during the renovation period.
Presently demand for pre’63 properties is strong particularly when they are situated in prime locations within Dublin 4 or 6 and are generating approximate gross yields of 10%.
For further information:
+353 (01) 618 1339