Philip Zaulig: Dublin (Photograph: Philip Zaulig)
Dublin (Photograph: Philip Zaulig)

Not so Liffey!

Philip Zaulig: Dublin (Photograph: Philip Zaulig)
Dublin (Photograph: Philip Zaulig)

Stephen Faughnan, Chairman of the Irish Property Owners Association (IPOA) argues residential tenant deposit protector schemes based on those in the United Kingdom are not suitable for the Republic.

Stephen Faughnan, Chairman of the Irish Property Owners Association (IPOA) argues residential tenant deposit protector schemes based on those in the United Kingdom are not suitable for the Republic.

 

The current Programme for Government (PfG) in the Republic of Ireland includes a commitment to introduce a Deposit Protection Scheme for residential tenancy deposits modeled on schemes in the United Kingdom.

Whilst the unfair retention of deposits by landlords anywhere is unacceptable, at the Irish Property Owners Association (IPOA) we believe governments should exercise caution before regulating rental practices. 

Moreover, we are of the opinion that the legislation currently being proposed for the Republic is as unsuited to local market requirements as it is unnecessary.

 

Deposits: a necessary requirement

Tenants are required to pay deposits in order to compensate landlords for damage that might arise to a property and its fixtures or fittings; and less frequently to partially or fully cover rent arrears that may arise during a tenancy. Rarely are they sufficient to compensate landlords fully when tenancies go seriously wrong, however.


Deposits in Ireland

The retention of deposits by landlord cannot be considered a significant problem in the Republic; certainly when compared to the United Kingdom where 70 per cent of deposits are returned to tenants in full and 13 per cent never returned at all; despite the existence of government-backed tenancy deposit protection (TDP) schemes.

According to the most recent Private Residential Tenancies Board figures (the PRTB is a regulatory body that was established to process the mandatory registration of all tenancies in the Republic), only 836 (0.36 per cent) of 235,000 registered tenancies in 2012 (97,181 of which were new or re-registrations), resulted in allegations of unlawful retention of deposits.

Perhaps more impressively, only 123 of these 836 complaints (0.05 per cent of all tenancies registered with the PRTB in 2012) required enforcement action to recover deposits from landlords on the completion of a statutory dispute resolution process.

 

The cost of administering deposit protection schemes

Any debate on the merits or demerits of deposit custodial schemes needs to take account of the resources that are required to administer them.

Property, landlord, tenant and deposit details must all be registered and recorded in systems that must be able to monitor the safekeeping of deposits and handle requests for their return; in addition to providing a mechanism for dealing with disputes.

In turn, significant investment is needed in dedicated ICT infrastructure, call centre facilities and administrative personnel; as the experience of the United Kingdom where the Treasury finances schemes using public funds demonstrates.

 

Nothing but inconvenience

Deposit protection schemes are an inconvenience since deposits can only be returned once a series of actions has taken place after a tenant leaves a property. And in turn this prevents tenants from using an existing deposit with their next landlord.

Additionally, tenants are invariably required to apply for the return of deposits through a formal process which can take time - face further delay if they fail to reach agreement about the amount that is to be returned with landlords.

And additional delays can be expected if either party to a tenancy agreement fails to respond to correspondence from organisations responsible for administering deposit protection schemes.

 

A home-produced solution for Ireland?

As we have seen, Ireland already has a mechanism for dealing with complaints from tenants about retained deposits in the PRTB's dispute resolution service. This contrasts sharply with the position in the United Kingdom prior to the introduction of its TDP schemes. 

Indecon, an independent consultancy firm retained by the PRTB to assess the feasibility of the government's proposed deposit protection scheme, has proposed another alternative to a Deposit Protection Scheme in the form of a "fund to ensure tenants are not left at a loss if landlords fail to comply with Enforcement Orders”.

And IPOA submissions to the Minister for Housing, whilst focusing on strengthening the existing dispute resolution mechanism, incorporate a provision à la mode de Indecon's for raising the PRTB's standard  tenancy registration fee by €5 on condition that revenue generated will be legally ring-fenced, held in an interest-bearing account (which might reasonably cover PRTB administration costs for administering the scheme), and be used to refund a tenant directly in the event of a landlord failing to comply with a dispute resolution service finding that a deposit has been retained without justifiable cause.

A landlord–funded initiative might easily be administered through existing PRTB structures and supported by a minor reform of Small Claims Court procedures to allow tenants to pursue non-compliant landlords - and the PRTB to initiate legal action against tenants adjudged by the dispute resolution service to have lodged unwarranted complaints about landlords!

Article rating:

vote(s).

0 Comments

Write a Comment

:  (Photograph by Dave Phillips Phot).
Central and North West London NHS Foundation Trust (CNWL) Contract Wholly owned Central and North West London NHS Foundation Trust (CNWL) subsidiary, Quality Truste...

0 Comments | Read more +
JMP: Photograph courtesy of JMP.
Boost for Burrell Refurbishment as Kier Named Preferred Bidder Glasgow City Council’s Contracts and Property Committee has confirmed Kier Construction Scotland ...

0 Comments | Read more +
FCC Medio Ambiente: The Alt Empordà solid urban waste treatment plant.
Alt Empordà Solid Waste Plant Operational An FCC Medio Ambiente-led joint venture (JV) has assumed operational responsibility for the Alt E...

0 Comments | Read more +
Save the Children:
Making a Difference Staff at curtain accessories company Renaissance are supporting the Save the Children charity wit...

0 Comments | Read more +
Staverton:
Cultivating Creativity through Office Design Paul Edward, managing director of award-winning furniture designer and manufacturer Staverton, sa...

0 Comments | Read more +
The Durst Organisation: One Bryant Park, New York. (Photograph courtesy of The Durst Organisation).
Beyond 72 Degrees and Sunny Aircuity CEO Dan Diehl discusses the changing conversation about indoor environments.

0 Comments | Read more +
Chubb Fire & Security:
Staying Safe During the Festive Season The onset of winter and the festive season bring added fire and security risks and Chubb Fire & S...

0 Comments | Read more +
:
Smarter Workplaces: Integrating People and Technology As businesses embrace new technologies, Richard Harris, director of B2B market network Okappy, co...

0 Comments | Read more +
Panoramic Power: Panoramic Power sensor installation.
Power is Knowledge Yaniv Vardi, Managing Director of Centrica’s acclaimed Panoramic Power arm, tells FM Magazine his...

0 Comments | Read more +
Sodexo (UK & Ireland): <p>FM facilities engineers logo</p>
The New Social Contract FM Magazine spoke with Phil Hooper, corporate affairs director, Sodexo (UK and Ireland) about the...

0 Comments | Read more +
dmg events:
Knowledge is Power A decade after first partnering with the FM Expo, FM Magazine (GCC Edition) asks dmg events' Seni...

0 Comments | Read more +
ISS Facility Services:
Demonstrating Better Value Peter Ankerstjerne, chief marketing officer (CMO) for ISS World Services — who has recently been ...

0 Comments | Read more +
London Business School: London Business School.
Stimulating Learning The quality of the learning environment impacts considerably on the student experience - as well ...

0 Comments | Read more +
:
Essential Winter Maintenance With the onset of colder weather, David Gajda, operations director of UK-based ECO Integrated Pro...

0 Comments | Read more +
Lukas:
Chain of Responsibility Statistics show the fire industry needs to educate tenants on who to speak to regarding fire door...

0 Comments | Read more +
:
Implementing Green Practices Richard Renwick, managing director of industrial brush manufacturer Brushtec, explains how his co...

0 Comments | Read more +
:
A World of Investment Opportunities The International Property Show (IPS), the Middle East’s biggest property sales platform for loca...

0 Comments | Read more +
UAE Ministry of Economy: International Property Show 2013
MAG Property Development and IPS Partnership The International Property Show (IPS), the Middle East’s biggest property sales platform for loca...

0 Comments | Read more +
Datateam Business Media:
Building Services Forum With tickets selling fast for the inaugural Building Services Forum, potential attendees are bein...

0 Comments | Read more +
:
US$200Bn of Hospitality and Leisure Projects Underway in the GCC There are more than 2,000 hospitality and leisure projects with a combined estimated value of USD...

0 Comments | Read more +