Last September, Housing Minister Eoghan Murphy announced a new scheme that could limit the size of the deposit required on private rented accommodation to one month’s rent.
Six months later, and that limit hasn’t been put in place yet.
Housing charity Threshold says that the number of tenants being asked for more than a month’s rent as a deposit has been growing.
Landlords have asked for two, three – even five – months’ rent as a deposit, said Stephen Large, Dublin Services Manager for Threshold.
Meanwhile, a government scheme to move people on from homelessness to private-rented accommodation might be making the situation worse – by helping to inflate landlords’ expectations about how much cash they can get up front.
What’s a Deposit?
There’s no legal definition of a deposit, says Large, of Threshold, so “it’s usually a month, but it doesn’t have to be”.
Threshold has been campaigning in the last year to have “clear legal guidelines as to how much of a deposit could be asked for to establish a tenancy”.
With rents already high in the city, growing deposit requirements can increase the barrier for someone trying to get a home, and with it the likelihood that they may end up homeless.
According to the Residential Tenancies Board’s annual report for 2016, of 4,847 applications submitted for dispute resolution, 1,040 were about deposit retention, making this the third most common issue reported to the body.
In 68 percent of cases, the RTB found that the tenant was entitled to a full or partial refund of the deposit.
The RTB’s report noted that a deposit can often be a tenant’s main source of savings, which means that if the landlord keeps it, that can cause “significant hardship”.
Fintan MacNamara, spokesperson for the Residential Landlords Association of Ireland, said, regarding complaints to the RTB that “most of the problems (complaints) were to do with arrears of rent”.
“In the case of about one-third of the cases I think landlords were justified in withholding part or the entire of the deposit,” McNamara said.
Take It or Leave It
A UCD student who asked not to be named for fear of losing their home, said his landlord asked for three months’ rent as a deposit.
“He felt we had a high chance of damaging the house severely and also defaulting on our rent,” the student said.
“I questioned it and it was kind of like a take it or leave it, and I really liked the place. It is really hard to find a place in Dublin around UCD, so I had no choice,” he said.
After two years, he and his housemates asked if they could reduce their deposit to two months’ rent, but the landlord refused.
The housemates don’t consider the deposit a significant financial strain, because they believe they’ll get it back, but it’s “a little risky if the landlord decides to retain the deposit at the end”, the student said.
“Although I can see merits for a heavier deposit, I think a cap on deposits would be good to safeguard the tenants,” he said.
Threshold advises tenants to check the property as carefully as possible before handing over any money, says Large, including checking if it’s a genuine let. But “the reality is that if you ask for that, the person loses they property”, he said.
Just over the Easter weekend, Large says Threshold was contacted by someone who was asked for two months’ rent as a deposit, plus one month of rent up front. “They went with their gut,” he said, and wanted to check it out first, before signing a lease, “so they lost the property”.
“We won’t be waiting until 2019”
In September 2017, Housing Minister Murphy said a deposit-protection scheme would be established and operated by the RTB “to handle deposits and to manage disputes”, and that, “under this new scheme, the RTB will be able to define a deposit at one month’s rent”.
“We won’t be waiting until 2019 for the RTB to take on these enhanced roles – rather, additional powers and functions will be rolled out in the intervening period according to priority,” he said.
However, this has not happened. Large says that Threshold have not received a response from the department on why not.
A spokesperson for the Department of Housing said by email that “The Residential Tenancies (Amendment) Act 2015 provides for […] the establishment of a tenancy deposit protection scheme to be operated by the (RTB).”
But “current legislative provisions (the deposit protection scheme), have not been commenced”, the spokesperson said. “[T]he normal practice is that one month’s rent is paid to a landlord as a security deposit.”
The Department and RTB have been asked “to undertake a detailed examination” of the legislation, to “identify any improvements”, and “further legislative provisions”, and, it’s expected that “any necessary legislative changes can be progressed through the Houses of the Oireachtas this year”, following an examination of the existing legislation.
The Council’s Role
For tenants on the Homeless Housing Assistance Payment (HAP) scheme, Dublin City Council now pays one month’s rent as a deposit, and “two one month’s [sic] rent in advance”, according to a spokesperson for the council’s press office.
“[T]here is no evidence that this leads to inflation for other renters, but it is possible,” the spokesperson said.
When asked if they have made any submissions to the Department of Housing relating to the deposit cap, they said “at this stage we would not favour any dilution to the existing provisions of this scheme”.
In fact, Dublin City Council is “not aware of any proposal around capping the Rental Deposit”, the spokesperson said.
Ultimately, Large of Threshold suggests that there is a need for some kind of licensing or certification system for landlords, to protect tenants, who are “at risk, because the law doesn’t protect them”.