Landlords who claim their tenants are lodgers in order to avoid paying a legally required €70 registration fee, could face serious financial penalties. By law, all tenancies must be registered with the Private Residential Tenancies Board for a €70 fee.
However some landlords are using licence agreements with tenants as a way around the need to register with the board, according to the Institute of Professional Auctioneers and Valuers (IPAV).
Its chief executive, Fintan McNamara, said that using such licences "may be €70-wise but it could be tens of thousands of euro foolish", through audits by the Revenue Commissioners or in legal disputes with tenants.
Mr McNamara, who is highlighting the issue in the run-up to the autumn lettings, pointed out that the protections tenants have under the Residential Tenancies Act do not apply when they sign a licence agreement.
Licences generally apply to hotels, guesthouses and very short-term lets. It would also apply where people take in lodgers.
However in private rental accommodation cases, "many of these licences may be deemed not to be bone fide or be found to be invalid and could result in financial penalties down the line," he said.
"A licence must mean that the tenant does not enjoy exclusive rights to the property. It would mean that the landlord would have to have regular access, pay the utility bills and so on such as happens in an aparthotel.
"It is very difficult to see how such an arrangement could operate with a regular flat or house let out to tenants."
Up to 90,000 landlords have registered with the board, but there could be more than 10,000 others who have failed to do so.
Mr McNamara said in some cases landlords "seem to be using licences as a device to avoid giving tenants their rights". They could be placing themselves "in very perilous circumstances".
"The courts have in the past been wary of licences and require proof other than a written document that the licence arrangement was genuine and not a device to deprive tenants of their rights," he said.
"There is every possibility that the Revenue Commissioners may view the instrument with equal suspicion when interest relief is claimed."
