The council’s rent review has also resulted in a higher level of rent arrears and affected rent collection rate. Photograph: Odhran Ducie

Council rent arrears at €2.7m

Local tenants are having to take out loans to cover an increased rent demand from Tipperary Co Council, a meeting in Nenagh heard last week.

The council, which has 6,107 rent accounts countywide, had rent arrears of €2,711,392 at the end of last year. This represents a slight decrease on the previous year. Credits in 2022 on rent accounts stood at €632,183, creating an overall net balance of €2,079,209.

The council carried out a rent review in 2021 and into 2022 to ensure that all tenants were paying the correct rents in accordance with the income of the household. This resulted in an upward adjustment of a number of household rents due to non-declaration of a rise in household income.

This month's management report from the council's Housing section stated that the review has increased the amount of rent income, which in turn is expended on housing services. But the review has also resulted in a higher level of rent arrears and affected rent collection rate, which saw a drop from 95% to 90% at year-end.

“However, the Rents section is working actively with those accounts who are in arrears and has arranged for payment plans to be put in place, so it is expected that the rent collection rate will improve throughout 2023 and 2024,” the management report states.

€10,000 in arrears

At last week's meeting of the council's Nenagh Municipal District, Cllr Séamie Morris said he is working with tenants who “religiously” paid their rent but have been hit with arrears of thousands of euro since the rent review. One family was faced with arrears of €10,000 “almost overnight”.

Cllr Morris observed that the council's rent arrears stood at €1,290,441 in September of 2021. They had increased to €1,817,265 by January of last year. The rent review was not properly communicated to people, he said, adding that those affected are dealing with the council as best they can and do not need the assistance of MABS, as they know how to manage their money.

But Cllr Morris said families facing such high demands in rent had little choice but take out loans to cover their arrears. “How can they pay back €10,000 unless they borrow money?” he asked.

Cllr Ger Darcy spoke of two similar situations of people he is working with, who were previously “up to scratch, as far as they were concerned” with their rent. One household was informed of a €4,500 arrears bill after the review.

Cllr Darcy said that in one case, a tenant went to a credit union to take out a loan to pay off the debt.

“Why did we get to this situation?” he asked, speaking of the stress and anxiety caused to the tenants involved.

Housing Officer Deirdre Flannery said the council had sent letters to all tenants, informing them of the rent review and the need to inform the council if their circumstances changed. If a tenant gained employment without informing the council, they were likely to face a high demand, especially in cases where someone was paying €30 or €40 a week when they should have been paying €100.

But Ms Flannery said the council would work with every tenant in trying to manage their arrears and she encouraged those under pressure to talk to the staff in the Housing section. The council would try to find a workable payment arrangement, and even cases where tenancy warnings are issued are normally settled before going to court.

The Housing management report states that rents are calculated in accordance with a tenant’s income and as per the council's Differential Rent Scheme. “There is a requirement in the tenancy agreement, which places an obligation on the tenant to inform the council where a change has occurred in their income.”

The average rent in 2022 was €59.65.