PRTB deposit scheme? Whatever… Here’s the way around it

It is only due to fairly unsatisfactory outcomes with the PRTB (such as massive delays in hearings, awarding damages that will never be recovered and the fact that they jacked up their prices while also only charging one party to the contract) that the idea of them running any further ‘scheme’ is of concern.

On that basis, and in speaking to landlords, many of them won’t take part, and there’s a simple reason for it, they don’t want to be part of a scheme that creates more administration and reduces the relationship to being further beholden to a third party.

So here’s the way around it: stop taking deposits.

That’s all there is to it, landlords should merely stop taking deposits and when they do there will be nothing to give to the PRTB because the deposit was never received so it cannot be passed on.

What you can do is demand first and last months rent up front. This means you don’t hold a deposit for any damage, but if the damage is significant a deposit won’t cover it …

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Today FM: The Last Word, Karl Deeter & Eoin O’Broin discuss housing

We were pleased to be part of a discussion about housing which featured our own analyst Karl Deeter and Sinn Feins Eoin O’Broin to talk about housing.

Deeter was at pains to point out that tenant protection was enshrined under the idea of ‘dual ownership’ back in the 1870’s and O’Broin said that there were other things to consider, it was a measured and interesting debate.

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Joan Burton made a housing issue worse

About four years ago many landlords were receiving letters which stated that rent supplement was going down, this was occurring irrespective of what point in your rental contract you were at. This was at the behest of Joan Burton, the issue of rent supplement was later divested because it was later to be taken over by DECLG.

The genesis of the current issues with much of this rest with Labour and Joan in particular, this isn’t pointed out in the press, but the people affected know it, which is why her name almost always appears on their placards (see image to the left for a recent example)

At the time tenants were getting a letter that stated ‘Rent limits were reduced on the 1/1/12. The new rent limits for a family of your size is now (whatever the price was). Can you ask your landlord to reduce your rent and fill in section 13 to reflect the reduction‘.

This was a unilateral move, and one that paid no attention to the …

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Investor defaults and ‘receivers of rent’

Today Bank of Ireland chief Richie Boucher spoke about strategic defaulters, the wording used was different, he spoke about tendencies to engage in “a diversion of rental income that should be coming to the bank”.

Who will the receivers be? I suspect it will be some of the well known estate agents who I know are in talks with other banks on the same basis. The ‘receiver of rent’ clause in many mortgage contracts is often unenforced. The ability to obtain it is not generally contested but it still requires a court order and then the operational difficulty of getting to the property to explain this to the tenant and then taking over the collection of the rent.

Why has the level of arrears spiked in the investment pool of business? Theories abound, my own (which makes me vastly unpopular) is that it is down to making a business decision in favour of oneself. However, getting a rent receiver is not a ‘fix’ and I think Bank of Ireland will …

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Big bad landlords?

‘Landlords are bad’, I don’t believe this but the general take on it (in Ireland anyway) is that on some level they are. I don’t know if this is because they hold sway over the place a person calls home for renters, or if it is based on some fact as yet unknown.

One of the most common complaints is about deposit retention, but often this is analogy rather than based on actual numbers.

The actual facts which we can track tell a different story. The Private Residential Tenancies Board (PRTB) figures show that out of 230,000 registered tenancies there were only 958 ‘deposit retention’ cases (2010 annual report).

This represents less than 0.5% of tenancies. Of those 958 cases it broke down like this…

Depending on how you like to look at a chart it can tell you one of two things, that either landlords are generally in the right, or that tenants are. In at least 20% of cases the landlord was fully entitled to deposit retention.

In 42% of cases they were not – …

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Landlord statistics are wrong…. depending on how you read them!

I had a wonderful debate today on Newstalk where we discussed the rental market, Threshold sent in their Chairperson Aideen Hayden. The debate was very informed, in particular Aideen was very sharp in the area of tenancy laws, I learned a lot during this interview.

Naturally there are always a few corrections – she corrected me twice; once on sub-letting and again on a statistic that I took from the PRTB annual report (going so far as to mention that she is on the board of the PRTB and that therefore I was wrong).

Alas, I have to offer a correction in return to a PRTB board member & chairperson of Threshold who is currently undergoing her PhD in Housing and who has a degree in Economics (all of these things were mentioned to me in backing up her argument [on and off air]); see the graph below – taken from page 33 …

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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 …

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The PRTB (Private Residential Tenancies Board)

If you rent a property which is covered by the Residential Tenancies Act 2004 then you must register a tenancy with the PRTB, if you get the registration in within a month it will cost €70, if you are late it is €140. This fee gives the landlord virtually nothing and if you don’t register the PRTB can (in case of any dispute), defend the tenant but not accept any complaints from a landlord.

The fact that this is so one-sided is evidence that there is an anti-landlord undercurrent which is highly prevalent in Ireland goes so far as to be expressed in legislation. Contrary to popular belief, a landlord has very little ability to turf out tenants or behave in a manner which is one sided.

If you don’t register your tenancy you cannot offset mortgage interest against rental income, the laws on offsetting expenses (mortgage interest) for landlords have changed, and now you can only offset 75% of the interest against rental income, if you had this reduced to zero for not registering with the PRTB you could …

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