State’s rental market regulator’s projected deficit over €2 million, board said

The board of the State’s rental market regulator expressed concern over the organisation’s finances at several points last year, which saw its projected deficit reach more than €2 million, minutes of internal meetings show.

Concerns around the accuracy of figures published by the Residential Tenancies Board (RTB) on the number of tenancies nationwide were also discussed during board meetings.

The regulator expressed concern to the Department of Housing over an “unfunded budget deficit” from a waiver of landlord registration fees for certain tenancies, according to minutes of a January 13th, 2022, meeting. The board heard that in talks the month before department officials indicated “they would not accept any curtailment of the RTB’s mandate as a result of having to absorb this charge to income”.

There were concerns at the meeting about the board of the regulator approving “a deficit budget” for 2022, minutes show. The organisation had run a deficit of more than €200,000 for the year in 2021, the meeting heard.

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Minutes of RTB board meetings held in 2022 were released to The Irish Times under the Freedom of Information Act.

Bryan Kelly, RTB head of finance, told the board in a February meeting that the State body was projected to have a deficit of around €1.25 million for 2022. The following month the board heard the RTB had “breached” its reserves policy in January. At an April 14th meeting the board approved a draft budget for the year, which included a transfer of €800,000 from its reserves “to balance the forecasted deficit”.

Board members also raised problems reported by landlords in registering their tenancies with the RTB as required following the introduction of a new multimillion euro software system. There was concern that landlords were having difficulty using the RTB website to register, and might “disengage” as a result, according to minutes of a May 12th meeting.

Niall Byrne, director of the RTB, said the authority was “working through the issues” with the registration system. He told a meeting the following month that due to ongoing difficulties, applying late fees “would be unfair” on landlords. In August the RTB announced it would refund late fees paid to register tenancies due to the difficulties with the online system.

Separately, Caren Gallagher, RTB head of research, reported there were “issues” with the regulator’s data on the number of tenancies registered annually. He said many tenancies were actually “inactive” as landlords had “neglected” to inform the RTB when a tenancy ended.

The regulator was “reluctant to report these artificially high registration volumes” as they were often relied upon by other agencies and reported by the media, a June 9th meeting heard. One board member said it would be “more reputationally damaging” to stop publishing tenancy figures.

During a September 8th meeting the board heard the RTB’s forecast deficit for the year had increased to €2.2 million. Mr Kelly said this was mainly due to increased costs to try to fix issues with the new registration system. Projected costs for software to help address the issues had increased from €300,000 to €800,000, with some board members expressing concern at the increase.

A board meeting on December 8th heard income from registration fees had moved the projected deficit to a “moderate surplus” for the year.

A spokesman for the RTB said the body had “experienced some monthly variability in its registration income” during the year, but income recovered in the second half of 2022. While its accounts for last year were currently being finalised the regulator did not anticipate to post a deficit, he said.