PRTB Price Increase explained (by the Private Residential Tenancies Board)

found out that the PRTB was going to increase the price it charged to a landlord to register a tenancy and decided to email them asking for a justification for it (it’s going from €70 per tenancy to €90 per tenancy). Given that a tenant also benefits from the PRTB I thought it would have made sense to have them pay whatever the increase was over the landlords existing bill but first I wanted to ask why it was happening, my email is below

From: Karl Deeter
Sent: 22 December 2010 14:30
To: Registrations
Subject: re: change in pricing

Dear Sirs,

Can you write back and let me know what additional service is being offered in return for the additional fee or is it merely a price increase because you have the ability to do so?
Sincerely,
karl

Karl Deeter QFA, (LIAM)dip
Operations Manager

The reply I got is below…..

——– Original Message ——–
Subject:     FW: change in pricing
Date:     Fri, 14 Jan 2011 08:29:12 +0000
From:     Registrations
To:     karl deeter

Dear Sir,

I refer to your e-mail below. This is the first increase in the registration fee since the PRTB was set-up in 2004.

The PRTB is self-financing and is dependent on registration fees for income as we no longer receive an Exchequer grant.

The PRTB receives in the region of €6 million in registration fees each year whereas the operating costs exceed €7 million and it cannot continue to operate at a loss.

The PRTB has taken a number of steps to reduce its operating costs:
·         The staff of the PRTB have had two pay cuts in the past year.
·         All major contracts have been re-tendered publicly.
·         All Adjudicators and Tribunal members are doing additional hearings for the same daily fee.

Yours Sincerely,

Robert Allen
Private Residential Tenancies Board
—————————————————-

‘Costing’ €7 million per annum has nothing to do with a landlord, that is an internal budgeting issue, but unlike a regular business where you could just decide ‘I won’t deal with them because I don’t like their price’, you can’t do that with the PRTB because apart from being mandatory, there are no substitutions.

This doesn’t resolve well with me because if we ran a business that cost more than it brought in then we’d cease operations or have to do whatever it took to bring the service in line with the costs, the PRTB doesn’t have that issue.

The real rub here is that they haven’t even bothered to look at their existence and who their two clients are versus who pays the bill. The two clients are tenants and landlords, but only the landlord has to stump up the cost – the tenant who pays nothing stands to benefit only. In fact, the landlord who doesn’t pay is crippled because in any dispute the PRTB will represent the tenant for free and won’t engage with the landlord due to their failure to pay the bill.

Let us suspend reality briefly to enter into this world of cost being an arbitrary concept. The ‘cost’ of the PRTB is €7m+ p.a. but they only take in €6m so that is a deficit of about 14%, alternatively you could say that they need about 16.66% more in order to break even (€6m+ 16.66% = €6.99m).

So why has the price increased by 28.5%? That will bring them from €6m to €7.7m – and this at a time when they have apparently cut costs, the €7m+ figure is historic and for that reason the benefit of a full years cost reduction will only come through in 2011. It just doesn’t stack up, it doesn’t make sense and the maths behind it are wrong.

This one sidedness is disappointing and only made worse by the fact that a toll has been erected on only one side of the bridge (always whichever side the landlord is on). This is how a tax is introduced then driven up – and in time I expect they will rise their price again because of their ‘costs’, if only state agencies could come and work in the real world where an inability to cut your coat according to your cloth actually means something.

Comments

  1. Karl
    If I get your argument right the tenant should pay the increase?
    What do you do with those on Welfare who are receiving €188 per week plus the rent allowance? Cuts in the budget amount to €40 a month on top of just over €30 a month this time last year. That plus the reduction in the rent allowance has made a substantial difference to the poorest in society.
    Perhaps you could clarify. I am not against those who can afford to pay being charged.

  2. Laura

    I have to say I was forced to pay the PRTB by a landlord some years ago simply because I wanted to get a parking permit. Many landlords still see the PRTB as an optional extra and try to get out of paying it at all. PRTB have been very slow to chase up on landlords who don’t pay. Lastly, there is no reason why tenants should be billed this fee. Landlords provide a service at a very high relative cost relative to the incomes of most tenants, and even working tenants on the whole in our home-owner obsessed society tend to be well below average. It is up to landlords to roll this and other fees and costs, into their overall cost package and charge appropriate rents to the tenants.

    It is a devious move on the part of some landlords to deduct the costs of waste, PRTB, parking etc out of the base rent in order to make their rentals look cheaper. It makes far more sense for landlords to simply factor these costs into the overall package unless there is a very good reason for doing so (for example parking in a city area where it is worth considerably more).

  3. @Louise

    I think that the benefits of the PRTB work for both landlord and tenant so at least some of it should be split between the two beneficiaries. The difference I am talking about is still totally weighted against the landlord who would pay 70 and the tenant in turn pays 20. Make no mistake, landlords are not unaffected by the budget, increased interest rates, lower rental prices and changes to caseV taxation!

    @Laura

    What you are suggesting is that this is baked into the cake, or part of the ‘rent’ price, and that is fine- in fact you could do that with everything but it just means higher rents. What I think you are suggesting is rather that landlords just take the hit, and many will, renters have had the upper hand of late and that is likely to continue, but when it doesn’t then equally don’t complain about higher rents! The idea of a persons income relative to the service they provide a client is missing the point, in that case why don’t we argue that a dentist should see one of us for free?

    thanks to both of you for dropping by! I really appreciate the comments – and while we might not agree, the debate is vital and welcome!
    Sincerely,
    karl

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