Repair and Leasing (RLS)

Repair and Lease Scheme

Repair and Lease Scheme (RLS) aims to increase the supply of social housing by bringing vacant or commercial properties in need of refurbishment back into use as homes for families and individuals on the social housing waiting list.

Suitable buildings are typically located in central locations or high-profile sites that benefit from renovation.

Under the RLS, Longford County Council or an Approved Housing Body (AHB), will provide interest-free funding of up to €80,000 (including VAT) per individual home delivered to bring the property up to rental standard. In return, the homes are leased to Longford County Council or an AHB for between 5 and 25 years. The loan is repaid via a deduction in the monthly rent over an agreed term within the lease. The RLS calculator helps local authorities see how the different repayment arrangements will impact on the initial net payments to the landlord. 

The scheme is targeted at owners who cannot afford the cost of the works required to bring a property that has been vacant for at least one year up to a lettable condition. 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 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

Applications under this expanded scheme are now permitted until July 2024.

Subject to Longford County Council deeming a property suitable for social housing, and the agreement of the property owner, the cost of the necessary repairs will be met upfront by the Longford County Council.

Is my property suitable for the scheme?

Properties suitable for the scheme are:

• the property has to be vacant for at least 12 months (proof of vacancy will be required)
• there has to be a social housing demand for the property
• the property has to be assessed as being viable to provide social housing
  
  

Property requirements

• Properties must be in good structural condition and will be subject to inspection by Longford County Council
• Properties must be compliant with the Housing (Standards for Rented Houses) Regulations 2019
• BER certificates will be required for all properties. The minimum BER is B2.

The property owner must arrange all contractor works to carry out the repairs, listing the works to be completed and providing a quotation for such works. Additionally, they must prove ownership of the house and tax compliance. Furthermore, it will be the responsibility of the owner to ensure that they consult with their finance/mortgage provider and obtain consent to enter into a leasing arrangement if required.

What arrangement will I have with my local authority?

There are two options for property owners who are making their properties available to a local authority:

• Direct Lease
• 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, see below:

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).

What are the maximum loan and rent amounts?

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 Repair and Leasing Scheme is a loan and not a grant. The cost of the repairs will be offset against the agreed rental payment until the value of the works is repaid and must be repaid over the term of the agreement. Longford County Council will agree with the property owner on a case-by-case basis on what the appropriate offset period will be. These arrangements may include scenarios where the offset is by way of a rent-free period, a consistent reduction throughout the lease or a term which is scaled against the duration of the lease, as set out in the examples in the table below:

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 RAAs, 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.

What are my responsibilities?

Landlord and tenant arrangements

When the repairs are completed, your property will be offered to households that have been approved by the local authority for social housing. If you have agreed on 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 the landlord’s rights and responsibilities.

Ongoing maintenance, repairs and other charges

Certain responsibilities apply whether you have agreed on 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 to a lease agreement 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.

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

Under a long-term leasing arrangement, the property can be sold by the property owner during the term, on the condition that the lease agreement is transferred to the new owner and the local authority or AHB has provided written consent.

Scheme Overview

• RLS provides social housing through the renovation of vacant privately owned properties.
• Longford County Council or an approved housing body (AHB), provides aloan to carry out works on vacant properties to bring them up to rental standards, see SI No 137/2019 - Housing (Standards For Rented Houses) Regulations 2019
• The renovated home is leased to the Longford County Council or AHB to provide social housing for between 5 and 25 years.
• The maximum loan is €80,000, including VAT, per completed unit (for example, 2 units max €160,000, 3 units max €240,000, and so on).
• The loan is offset against the monthly lease payment to the owner.
• Income: lease payments maximum 80% or 85% of market rent for long-term leases or 92% or 95% for RAA, less offset.
  
  

Benefits To Property Owner

• Long-term lease option (5 to 25 years) or Rental Availability Agreement (5 to 10 years typically).
• Longford County Council or the AHB is the landlord to the tenant, no day-to-day maintenance (long-term lease only).
• No loss of rent during vacant periods; no advertising/letting fees.
• Guaranteed income for lifetime of lease.
• Interest-free loan up to €80,000 including VAT, per unit. For example, where a vacant pub is converted into 7 units the maximum funding of €560,000 is available. In the case of multi-unit developments, funding may be apportioned between units.
• There is no limit on the number of units one property owner can provide under RLS.
  
  

Where can I apply?

If you are interested in applying to this scheme or wish to discuss further, contact us at vacanthomesofficer@longfordcoco.ie.

Further information on the scheme is available on GOV.ie.

Information on the tax treatment of RLS is available on the website of the Revenue Commissioners.  

You can also find more information below:

1. Repair And Lease Scheme Application Form (As Gaeilge)
2. Repair And Lease Scheme Application Form (English)
3. Repair And Lease Scheme Guidance Note 1
4. Repair And Lease Scheme Guidance Note 2
5. Repair And Lease Scheme FAQs
6. Repair and Lease Scheme Annual Lease Calculator

See the below infographic for a Sample Repair and Leasing Scheme Pathway:

This infographic details the steps by you and the local authority (or ABH) under the Repair and Leasing Scheme:

Step 1: Identify vacant property
Step 2: Contact your local authority. Find out more information on this on vacanthomes.ie
Step 3: Submit completed application form to local authority
Step 4: Local authority assesses if proposed units are suitable and required for social housing
Step 5: If yes, local authority arrange a site visit and agree who will carry out works
Step 6: Agree schedule of works with local authority
Step 7: Agree rents, discount and offset
Step 8: Sign agreement for lease and lease to commence on completion of works
Step 9: Works carried out
Step 10: Final inspection by local authority
Step 11: Submit invoices to local authority
After all steps are complete the lease commences with the property handed over to the local authority for the duration of the lease