Rent deposit account may save State €80m

THE STATE could save €80 million in mediating disputes about tenants’ deposits by creating a “national treasury account” to hold the money, the Dáil has been told.

Labour environment spokesman Ciarán Lynch said a significant amount of the workload of the Private Residential Tenancies Board (PRTB) related to disputes between landlords and tenants over deposits. There was an 18-month backlog costing €700- €900 daily, he said.

There is currently no legislation governing deposit sums. “A landlord may deposit it in their bank or credit account. They can keep it in a jam jar or a biscuit tin at home or go to a shopping centre to buy a sofa or to Las Vegas if they want,” he said. “Ultimately, the money handed over by the tenant belongs to the tenant and the landlord only has custody of that money for the duration of the tenancy.”

If a national deposit scheme was put in place, it would create a mechanism to ensure disputes could be dealt with speedily by the board, and “create an immediate saving of about €80 million” because there are about 80,000 rental allowance contracts, paid for by the State. Speaking during the final stage of the debate on the Housing (Miscellaneous Provisions) Bill, Mr Lynch said there were over 200,000 private residential tenancies agreed with the board. But he believed more existed and were not registered.

“If we tied the registration process to the holding and safekeeping of a deposit, it would create greater and more far-reaching compliance with the PRTB registration process.” The deposit could be lodged “notionally with a treasury account. If there is a breach of the tenancy agreement, the landlord can avail of the deposit, but most importantly the State need not outlay the money in the first instance.”

Minister for Housing Michael Finneran said he could not accept the amendment now but “my department is currently progressing a review of the Residential Tenancies Act and I have asked my officials to consider the deputy’s proposals in the context of that review”.

Mr Lynch also called for “rapid and effective action to terminate the tenancy” of any household where members engaged in anti-social behaviour. There was agreement on this amendment, but Mr Finneran said provision had been made to strengthen existing powers to address such behaviour.