Costello calls for independent body to be set up to hold tenant deposits

Costello calls for independent body to be set up to hold tenant deposits

LABOUR TD Joe Costello has called for an independent body to be created to hold tenant deposits in order to prevent abuse by landlords.

Deputy Costello said that considering renters had to come up with a “substantial” sum of money, it was only right that they get assurances that their deposit was secure and would be returned to them.

The former Lord Mayor of Dublin said: “The issue of illegal deposit retention by landlords has been a vexed issue for decades. Tenants in private rented accommodation are required to come up with at least one month’s rents as a deposit. This is a substantial sum of money, particularly in Dublin where property values have declined by over 50% but rental costs have remained the same and average rent range from €800 to €1,200 and sometime even more.

“For many families the deposit often represents a large part of their savings. For students, it is a huge cost if a new deposit has to be found each year. Tenants need assurances that their deposit is secure and will be returned to them.

“There are approximately one quarter of a million tenancies registered in the country with the Private Rented Tenancies Board (PRTB), so the issue of tenants’ deposits is a major one. The deposit can only be retained by the landlord in very specific instances, consistent with the Residential Tenancies Act 2004, namely rent arrears, damage above normal wear and tear or outstanding utility bills. Verification is required to prove excessive wear and tear and the PRTB has drafted guidelines in relation to this.

Deputy Costello pointed out that deposit retention complaints were on the rise and added that Threshold, in their 2010 Report, said that illegal deposit retention was still one of the most common problems experienced by tenants in the private rented sector.

“In 2010 Threshold dealt with 3,224 deposit queries. They were successful in ensuring a full or partial refund of the deposit for 79% of these cases. While Threshold have had some success dealing with landlords on this issue, many cases do have to be referred on to the PRTB. This can be a lengthy and difficult process for the tenant, particularly where they need to have the funds for a deposit on another rented property.

“The sums of money are substantial and the failure of a landlord to return the deposit or the majority of the deposit, can prevent a tenant, particularly those on low incomes, from accessing alternative rented accommodation when they move out.

“Tenants on rent supplement may receive assistance from the Community Welfare Officer for an initial deposit, but they are expected to use this payment as a deposit on future rented properties in the event of them moving and the CWO will not provide funding for a second deposit.

“I would deal with many such instances of illegal deposit retention in my advice centres on an ongoing basis. My experience is that once the tenant has representation on the matter, landlords will give in and return either all or some of the deposit.

“The PRTB is specific when it states that “Deposits are the property of the Tenant”. Yet the landlords are able to bank this money, even earning interest on the amount and then often refusing to refund the amount to the tenant.

“Threshold recommends the establishment of a deposit protection scheme, where rental deposits are held by an independent third party such as the PRTB or the local authority. This would ensure the timely and efficient return of the deposit, unless there is a valid claim by the landlord. There are examples of such models in the UK and in Europe.

“I am calling on the Minister to bring in legislation during this Dáil term to deal with the matter,” he said.

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