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Threshold, USI call on Govt for scheme to protect rental deposits

Threshold, USI call on Govt for scheme to protect rental deposits

The Union of Students in Ireland and national housing charity Threshold have called on the Government to immediately implement a Deposit Protection Scheme (DPS) in order to safeguard rental deposits.

Both organisations say that such a scheme is needed to protect tenants in the private rented sector from scams.

According to Aideen Hayden, Chairperson of Threshold, the scheme was initially promised in the 2011 Programme for Government and successive Ministers for Housing have agreed to its introduction.

She called on the Government to establish a legal definition of rental deposits; to limit rental deposits to the value of one month’s rent and to implement the DPS which, she says, would see deposits lodged with an independent third party such as the Residential Tenancies Board.

The RTB’s annual report last year showed that in four out of five disputes the deposit was either fully or partially awarded to the tenant.

“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,” Ms Hayden said.

Similar schemes are in place in Northern Ireland, England, Wales, Scotland, New Zealand and Australia.

Tenants’ rental deposits are lodged with an independent third party and returned to the tenant directly by this third party.

It is guaranteed that the deposit will be returned to the tenant as long as they have met the terms of their tenancy agreement which means the deposit will be safe even in exceptional circumstances like when a landlord or letting agent goes out of business.

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Ms Hayden said: “We ask the Government to honour its commitment to re-examining the laws around rental deposits, which urgently need to be strengthened in order to increase protection for tenants in the private rented sector.

“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.”

Despite passing legislation to introduce a deposit initiative in 2015, the Government has yet to initiate the scheme.

Meanwhile, USI President Lorna Fitzpatrick has said that many third-level students are relying on the private rental sector for a place to live while attending college, due to a shortage of student accommodation.

“These students are already struggling to afford their college fees and rent, particularly those reliant on SUSI maintenance grants, and they are a group that is especially vulnerable to fraud and scams,” she said.

“A Deposit Protection Scheme would minimise their exposure to rental fraud and would also be of benefit to international students who may have to return to their home country without securing a return of their deposit.”

A spokesperson for Minister for Housing Eoghan Murphy said he does not oppose setting up such a scheme but it cannot impose an extra charge on tenants or landlords, and so must be self-financing.

The spokesperson said there had been significant changes to the rental market since the 2015 scheme was first envisaged.

“The draft scheme was originally intended to be financed by the interest payable on deposits lodged; this is no longer viable, given current financial market conditions.

“Furthermore, it is noteworthy that disputes relating to deposits are no longer the most common dispute type referred to the RTB,” he said.

Threshold said the introduction of a deposit initiative would further reduce the number of disputes referred to the RTB and have a knock-on saving to the State.

The Property Services Regulatory Authority also warned students and parents against bogus letting agents and fraudulent scams.

CEO Maeve Hogan said: “Our advice to potential students – and their mothers and fathers and guardians to help their offspring off to college on a positive note – is to make sure that they use a licensed letting agent and that’s critical.

She said each letting agent is required to carry an identity licence card and urged students or their parents to see that card.

In relation to scams, Ms Hogan said they get very little complaints but are aware anecdotally of people who are embarrassed after getting caught out.

“If rent is too good to be true, it possibly is too good to be true.”

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