Requests for non-refundable ‘holding deposits’ on rise

Landlords asking prospective tenants to pay non-refundable “holding deposits” in order to secure leases in Dublin is becoming more and more common. The practice is one whereby landlords claim the unofficial holding deposit will increase a tenant’s chances of being chosen to rent the property.

Adonis Moreira (27) works in IT and has been living in Dublin for four years after moving to Ireland from Brazil. He said while searching for a place to rent over the past few years numerous landlords asked for a non-refundable cash holding deposit.

“Sometimes they say they have some candidates interested and whoever gives more money will take the place. They never asked for an amount specially, but made it clear that the more money the more chances” of getting the house or apartment, he said.

“They usually do it with foreigners and students because it’s unlikely they will do anything about it,” he said. Mr Moreira said he could never afford to pay the additional cash holding deposit, but he had considered it as it was so difficult to find a place to rent in Dublin.

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Another renter in Dublin, who wished to remain anonymous, said several landlords he approached over rental listings this summer said he would need to pay a non-refundable deposit of at least €300, to “show I was serious about renting” the property.

“If the landlord ‘liked’ my references he would ‘probably’ pick me, but if he didn’t like them, then I wouldn’t get this money back,” the renter explained.

Property repairs

Mark Naughton (21) from Roscommon is another renter who inquired about a property in Drumcondra, Dublin only to be told a security deposit of €700 would be needed to repair previous damage to the property.

Mr Naughton said the landlord explained “that the deposit we were giving was going to pay for the cleaners and to fix up the apartment before we got in. The man explained that the chances of us getting it back were very slim.” Mr Naughton decided not to take out a lease on the house, which he said was in poor repair, but said the landlord told him the practice was “standard procedure nowadays”.

Stephen Large, Dublin services manager at tenants rights group Threshold, said landlords asking for holding deposits was becoming more and more common. "It's not illegal; it's very questionable. It's almost like an entrance fee, and another payment for landlords," he said.

Mr Large described the practice as “purely exploitative” and said it was an example of landlords “preying on the vulnerability of people because accommodation is so scarce”.

The holding deposit is not covered by the Residential Tenancies Act, like the official security deposit, so people paying the deposits have no formal recourse if any problems or disputes arise.

“The market at the moment is a suppliers market, and they try to squeeze every bit they can. Unfortunately, people are doing it; people are paying these non-refundable deposits over,” Mr Large said.

A spokeswoman for the Residential Tenancies Board (RTB) said it was "unacceptable" that landlords were seeking extra payments from prospective tenants on the grounds it would increase their chances of securing the property.

The RTB is responsible for regulating tenancy agreements, and arbitrates over landlord and tenant disputes. But it has no jurisdiction over any payments made to landlords before a lease has been signed. A spokeswoman for the body said the practice of asking for under-the-table holding deposits “appears to go against the principles set out in the law”.