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Deposit retention queries to Threshold increased by over 40% in 2020

3 March 2021

Threshold calls for introduction of deposit protection scheme, 10 years after it was first promised by government

National housing charity Threshold has today called for the introduction of a rental deposit scheme, ten years on from the government’s initial commitment to establish such a scheme. The appeal comes as Threshold has revealed that queries from tenants in relation to deposit retention increased by 43% between 2019 and 2020.

A deposit protection scheme would allow rental deposits to be held by a third party such as the Residential Tenancies Board (RTB) instead of by private landlords, in order to reduce the widespread non-return of deposits to tenants leaving rental properties. The Programme for Government of 2011 outlined the government’s intention to establish a tenancy deposit protection scheme to put an end to disputes regarding the return of deposits. In 2015 legislation was passed by the then Minister for Housing to enable the Residential Tenancies Board to launch the scheme; however, the scheme was never enacted.

CEO of Threshold John-Mark McCafferty said: “During the first week of March in 2011, the then incoming government committed to introducing a deposit protection scheme as a matter of priority, yet ten years on it still hasn’t happened. In 2020 Threshold saw a 43% increase in the number of queries from tenants relating to deposit retention. Many of these come from tenants whose deposits have been unjustly retained.

“The unlawful retention of deposits – often equivalent to two months’ rent – can make the difference between someone being able to secure a new tenancy, or becoming homeless. We estimate that private landlords in Ireland are holding at least €250,000,000* in deposits, an extraordinary sum, largely belonging to people on modest or moderate incomes.”

Threshold’s data shows that single-person households are disproportionately impacted by deposit retention issues. Throughout 2020, single-person households made up 53% of all households who contacted Threshold; however, 64% of deposit retention queries came from this cohort. This trend was also evident in 2019.

The difficulty being faced by tenants in retaining their deposits is evidenced by the case of one of Threshold’s clients, Venetia**, a former journalist. Venetia and her partner moved from Limerick to Dublin in January 2020 and paid €1,500 as a deposit on their new rented home. Shortly after moving into the property, they experienced issues with standards and repairs: water was leaking into the apartment; there was no ventilation in the bathroom; the letting agent refused to arrange for stained mattresses to be replaced; and, contrary to advertisements, the washing machine was only available on a shared basis with other tenants in the same building and there was no power cord attached to the tumble dryer. By October, Venetia and her partner could not tolerate their living conditions any longer and sought advice from Threshold.

Threshold’s housing advisors supported the young couple in submitting a case to the RTB. Eventually, in February 2021, the landlady agreed to refund their deposit and the couple agreed to withdraw their complaint with the RTB.

McCafferty continued: “Allowing an independent third party such as the RTB to hold deposits would ensure that many of these disputes are resolved easily. Another option that could be considered is the introduction of a ‘rental deposit passport’ that a tenant could produce as they move from one tenancy to another, as proof and a guarantee that the return of their deposit is pending. There are already varying types of deposit protection schemes in place in Northern Ireland, England, Scotland and Wales – Ireland is falling behind in this regard.

“Ultimately a system must be put in place to better protect private rental deposits. We are calling on the Minister for Housing to honour the promise made ten years ago in the 2011 Programme for Government.”

*figure is a conservative estimate, based on the Q3 2020 national average rent and the number of registered private tenancies in Q3 2020, taking into account that there exists a portion of long-term tenancies in which the deposit was set many years ago when rents – and therefore deposit amounts – were lower than today’s average

** client’s name has been changed to protect anonymity