Minister backs plan to protect tenant deposits
Friday, March 11, 2011
THE new Housing Minister Willie Penrose has backed plans for a tenancy deposit protection scheme to support thousands of vulnerable tenants coping with a wave of property repossessions and bust landlords.
An independent body will hold tenants’ deposits and landlords face being fined for wrongly holding onto advance payments under proposals being considered.
Mr Penrose also confirmed that savings with the proposed scheme may be reinvested in housing projects for the homeless.
Following an Irish Examiner analysis this week of tenant cases before the courts and their emerging battles with troubled developments, Mr Penrose said the deposit protection scheme would be an immediate priority for his office.
"This area has to be tackled. There is a need for an independent body that would hold and protect deposits and make quasi judicial decisions."
Estimates suggest that with deposits for rented accommodation averaging €1,000 for each of the approximate 250,000 tenancies, there would be a fund of at least €250 million held in such a scheme.
Such funds would gain interest when withheld in one account for tenants and landlords. The minister said any extra funds earned could go to supporting the homeless or housing projects.
Keeping in line with previous Labour Party proposals, Mr Penrose also said he believed the Private Residential Tenancies Board (PRTB) could run the deposit protection scheme.
"They would be the body for it rather than setting up another quango," he explained yesterday.
Housing support group Threshold say deposits were at the root of more than 4,000 cases dealt with by the organisation in 2009, according to its latest figures.
The charity has also claimed that 50% of cases brought to the PRTB relate to deposit retention and can take up to a year in general to be processed.
Mr Penrose said landlords found to have wrongly withheld deposits under the planned scheme would have to cough up payments or face fines.
"There has to be some deterrent, some sanction, otherwise cases will get bogged down there."
The Government in its recently published programme pledged to put an end to disputes regarding the return of deposits in a scheme.
Mr Penrose said he would be meeting with housing support groups and charities soon about the proposed tenancy deposit plan.
This is utter madness. More bureaucracy. Simple solution is to only allow Bonded Agents to hold deposits. This will stop the "rogue element" that cause problems. Not necessary to blanket the entire letting market with this! It will push up costs.