Residents to fight rent hike
Residents of apartments in a Cavan Town block have expressed “shock” at written notice their rents are set to be increased, and have vowed to fight the new owners on the hikes, which are over 50% in some cases.
It has emerged the investment company concerned has used, as examples of the market rate, properties it already owns at other apartment complexes in the county town.
Residents at Hampton Court on the Cootehill Road were last month provided with a written ‘Notice of Rent Review’ - only to learn that comparative examples cited at Clare’s Court (43) and Farnham Court (8A and 30A) were owned by the same firm. Sinn Féin’s Pauline Tully has criticised the move and is backing the residents: “In my view, it’s morally wrong.”
The Celt has learned effected residents in Hampton Court are banding together to fight the proposed rent increase.
A letter circulated within the block expressed ‘shock’ at the review.
‘We are not going to accept this and will seek further action,’ stated the notice, which also highlights issues around maintenance, cleaning, car parking, security, and health and safety.
If the increases are approved by the Residential Tenancies Board, Deputy Tully foresees a troubling situation whereby Cavan County Council could be inundated, even before the year is out, with requests for emergency accommodation as people are “left with no other option” or face homelessness.
“It looks like greed to me,” stated the Cavan-Monaghan TD. “People on low incomes are already struggling, not just in Cavan but right across the country. Really, this is only adding fuel to the fire, and it’s a massive problem I fear is only going to be made worse.”
Rent comparison
Last month tenants at Hampton Court were notified in writing that their rents were being increased, having earlier being told their apartments had been sold by DSPL Limited to Consdorf Investments ICAV, an umbrella fund, acting for sub-fund Steinfort Investments Fund.
Steinfort Investments paid €5,775,477 for the 59 apartments and three commercial units, to which BPL Management Limited was listed as letting agent.
Steinfort Investments, Consdorf Investments ICAV and BPL Management are all controlled by Mullingar-based Bennett Construction.
Residents were further informed that grounds for the proposed rent increases by Steinfort Investments were based on rents paid at three comparable dwellings – two, two-bed apartments in Farnham Court (€1,200/€1,100), and one in Clare’s Court (€1,100).
In respect of the Farnham Court apartments at 8A and 30A, both were among the 58 units snapped up by Steinfort in July 2021 for €5.4m, 20 per cent above the initial €4.5m BidX1 ticket price.
At the time, the two-bed apartments 8A (ground floor) and 30A (3rd) were advertised with monthly rental incomes of €725 each, or €8,700 per annum.
The Hampton Court rent review letter provided the opinion that the new rent is not greater than the current market rent, “having regard for other terms of tenancy, and letting values of dwellings of a similar size, type, and character”.
The same examples were provided to other residents at apartments in Clare’s Court where the cost of rent for one resident, with whom this newspaper spoke, will rise from €675 per month to €1,000 at the end of November 2022 for a two-bed apartment, once the six-month notice period has expired.
They too had received a letter informing them Consdorf Investments ICAV, acting on behalf of sub-fund Steinfort, had purchased 46 of the 48 apartments, along with office space and a retail unit rented to Insomnia café at €52,000 per annum on a 20-year lease.
The property had been due to go to auction on BidX1, with a listed price at €4.65m. However, it was subsequently removed, and according to the Property Price Register, was sold for €4.3m in December last year.
For the Farnham Court increase, Steinfort referenced rent examples at The Drumlins, Cavan Town (€900); Millview in Athboy, Co Meath (€120); and 12 Thornecourt, Ardee, Co Louth (€1,250).
Deputy Tully criticised Athboy being used as a comparative to Cavan. “Sure that’s almost in Dublin!”
Davy’s Cavan sell-off
Davy Target Investments ICAV purchased their concern in all three apartment blocks between 2013 and 2014.
The scale of Davy’s investment portfolio in Cavan was such that it accounted for an estimated third of all available rented apartment properties in the county town at that time.
Farnham Court was sold in one single lot for a price just short of €1.2m, 11% below the asking price of €1.35m.
Clare’s Court sold in March 2014 for €517,722, less than a third of what Savills initially valued it at (€1.7m); and Hampton Court cost Davy just €1.4m. The complex had an original €3.95m price tag.
As part of the documentation received, residents were informed that any dispute with Steinfort or BPL Management in relation to the new rent must be referred to the Residential Tenancies Board (RTB).
Above Celtic Tiger rents
Rents in Cavan Town, according to latest reports, are now far above Celtic Tiger levels.
As of January 2020 a typical three-bedroom semi-detached fetched up to €800 a month.
But Cavan is currently amongst the counties that have experienced the greatest hikes in rents for new tenancies in the country.
The Q1 2022 Rent Index report shows new rents jumped 21% in the first quarter of 2022, compared to the same period in 2021. Only Leitrim (22.4%), Roscommon (21.7%) and Carlow (21.7%) were the only other counties in the Republic to breach the 20% increase threshold between January-March.
Official figures published by the Residential Tenancies Board (RTB) also show the standardised average rent in new tenancies Q1 2022 in Cavan was €905.01, up from €771.20 in Q4 2021 (+17.4%); and from €747.66 from Q1 2021.
CMETB impacted
The Hampton Court deal further impacts Cavan-Monaghan Education and Training Board, which now looks set to pay a combined €541,872 per annum to Consdorf for premises rented at Hampton Court, as well as Churchview, Cavan Town.
The no-break 35-year upwards-only agreement sees the ETB currently pay €289,050 per annum, including VAT, for five interconnecting office units (2-6) at Churchview. The lease was signed towards the end of November 2009, and doesn’t expire until the end of 2044.
CMETB entered into a lease agreement for Block 4A, Hampton Court in January 2009, which automatically transferred to Davy Target Investment following their 2014 deal.
The agreement has no break options, and returns an annual rent of €252,822 at present.
A spokesperson confirmed that CMETB received notification again on July 12, 2022, that Block 4A had changed ownership to Consdorf Investments ICAV.
“As part of the acquisition, CMETB’s lease for the premises transferred to Consdorf.”
They added: “Hampton Court is the base for a wide range of further education and training courses at Cavan Institute including healthcare, childcare, nursing and the newly launched hairdressing apprenticeship.”
With respect to leases at both Hampton Court and Churchview Square, the CMETB spokesperson stated that ownership of the buildings has “changed on numerous occasions throughout the years however the lease agreements have ensured the continuation of CMETB services in the provision of education and training in Cavan”.
‘Chronic situation’
The wider impact of the Steinfort purchases seems to have driven rents in Cavan up across the board, considers Deputy Tully, who says a “chronic situation” has developed, and firmly blames successive governments for failing to do more to address the problem.
“This has been allowed to happen because of inaction,” she told the Celt.
Earlier this year her party strongly opposed a controversial amendment to continue to allow investment funds side-step a 10% stamp duty if leasing back houses to the State for social housing.
The previous month, under pressure, a new 10% rate of stamp duty on bulk purchases of 10 homes or more was introduced in an attempt to fend off so-called cuckoo funds from snapping up housing from under the noses of first-time buyers.
That Cavan Town is not included as part of some form of tiered rent pressure zone system has also been condemned by Deputy Tully.
“People are finding themselves being forced out of one home and then finding themselves with nowhere to go,” she says, alluding to a market where there were 10 properties to rent for all of Co Cavan on August 8 last and just two in Cavan Town, one of which, a three-bed semi was listed at €1,900 per month.
‘All emergencies now’
Deputy Tully said her office, like that of other local Oireachtas representatives, faces multiple representations from people facing the prospect of homelessness and struggling to make ends meet to the rising cost of living.
“Every week we have people coming to us looking for help. This is the fault of successive governments. They won’t try to control rents, they won’t bring in freezes. Not just ourselves but other parties on the opposition side have tried to introduce Bills that have gone ignored, even for just a two or three year period to allow things settle.”
She describes the situation facing Cavan County Council in particular as a “house of cards”, where people on low incomes have secured assistance, but this soon won’t cover the cost.
“If they qualify for social housing you make representations for them. But there are just so many now in the same boat, and I see it only getting worse before it gets anyway better. It’s not even that someone is homeless and it’s a case of emergency. They’re all emergencies now!”
Bennett Construction and Cavan County Council have been contacted for comment.
The Bennett Group has a broad portfolio of successful interests across a broad range of sectors from property to hospitality, commercial and industrial, to healthcare and pharmaceutical.
The Government’s Housing for All plan pledges to invest around €4bn per year in housing over the next five years, and previously insisted that the State was on-course to build nearly 10,000 social and affordable homes in 2022.