A deposit protection scheme is urgently needed to safeguard the money of people in the private rental sector and to protect them from potential scams, housing charity Threshold has said.
The National Union of Students in Ireland (USI) has also urged the Government to follow up on its commitment to address the illegal retention of deposits by landlords.
The two organisation want the State to establish a legal definition of rental deposits and to limit these deposits to the value of one month’s rent.
A tenancy deposit protection scheme, which would see a third party hold deposits paid to landlords, was proposed under the 2015 Residential Tenancies (Amendment) Act. However, the legislation enforcing this scheme has not yet been implemented.
The charity said a lack of guidelines around how much a landlord may request as a deposit means some tenants are being exepcted to pay two or more months’ rent upon moving into a property, an outlay of some €4,000 in some cases in Dublin or €2,500 in Cork. It said these costs are out of reach for many and result in people entering in debt or unable to pay their bills.
Threshold chair Aideen Hayden said successive governments had committed to addressing the illegal retention of deposits by landlords since 2011 through a holding system operated by the Residential Tenancies Board (RTB).
“There are vulnerable people in tenancies all over the country who are on the margins of homelessness and simply cannot afford to lose their deposits,” said Ms Hayden.
‘Moneylenders’
“The lack of a scheme to safeguard deposits has led people to resort to moneylenders in order to fund the deposits for their new rental properties.”
“By law, a deposit belongs to the tenant unless the landlord establishes a right to it,” said Ms Hayden, adding that the current RTB adjudication process was “very lengthy and not fit for purpose”.
“ A deposit protection scheme, in which deposits would be guarded by an independent third party, would inevitably lead to less of these kinds of disputes.”
The illegal retention of deposits not only takes place in Dublin but affects tenancies around the country, said Threshold’s Karina Timothy, adding that the charity had been campaigning for the introduction of a deposit protection scheme for more than a decade.
"We saw first-hand that the loss of a deposit carries a high human cost and can pose a real risk of homelessness to tenants. The scheme would strengthen our private rented sector and bring Ireland in line with international best practice, as such schemes are currently in place in Northern Ireland, England, Wales, Scotland, New Zealand and Australia. "
USI president Lorna Fitzpatrick warned that third-level students were particularly vulnerable to rental scams and that a deposit protection scheme would minimise their expose to this type of fraud. The scheme would also benefit international students who may have to return to their home country without securing the return of their deposit, she said.
Registered
Maeve Hogan, chief executive of the Property Services Regulatory Authority, advised students and their families to only rent accommodation from registered letting agents and agencies.
Those seeking accommodation from a letting agent should ask to see a property service provider’s licence and note their licence number before paying any deposit or rent, she said, adding that all letting agents, auctioneers, estate agents and management agents operating in the State must hold such a licence.
“If things go wrong there is a compensation fund that is sector funded,” Ms Hogan told RTÉ radio’s Today with MiriamO’Callaghan show.
Ms Hogan said reports to the PSRA regarding bogus letting agents increase at this time of year as attempts are made to take advantage of students seeking accommodation. These people often advertise accommodation online attempting to extract financial payments from prospective tenants. In some instances, these bogus agents will claim to have a valid PSRA licence number.
