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Threshold: Landlords charging 2 month's rent deposit 'where they can't increase rent'

Graham

It's being reported by the Indo that the CEO of Threshold thinks increasing deposits are a direct result of landlords trying to boost their income in RPZs.

I don't know why it surprises me that the CEO of a national housing charity can't see a connection between increasing deposits and weakening landlords rights.

While I've no doubt there are a small minority of landlords that illegitimately attempt to hold on to tenants deposits, RTB cases certainly don't suggest it's suddenly reached epidemic proportions.

Maybe if certain national housing charities stopped advising tenants to overhold, landlords would feel less of a need to increase their security slightly by raising deposits.

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Askthe EA

Indeed

Grolschevik

https://www.joe.ie/news/rent-dublin-deposit-596068?utm_content=buffer4e6a1&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

And apparently a TD has questioned its legality. On what basis, I'm not sure.

Speaking on Newstalk Breakfast on Monday morning, Labour TD, Jan O' Sullivan said that:

“The residential tenancies board as you know has the power to intervene in these kinds of disputes and if they are looking for two months deposit as well as the first month’s rent - I am not sure if that is actually legally allowed,

The former Minister for Housing concluded: “I think most definitively there can be ministerial intervention if that is needed to stop this.”

Personally, I'm not convinced that asking for an increased deposit will do anything to increase landlord's peace of mind in the long term.

For a number of reasons:

a) Once it becomes the norm, then any comparative advantage in weeding out undesirable tenants will be lost.

b) It's a bigger wedge of cash that the landlord will have to (in most cases) hand back, and unless they are diligent and segregate in a separate account and not touch it, it'll have to come out of their current income,

c) If a tenant is willing to use their deposit as the last month's rent, I would think they are as likely to use a larger deposit as two months rent.

jimmycrackcorm

TDs are experts at nothing but blowing hot air.

I suspect it's more motivated about being restricted from taking HAP or rent allowance. It's a better sign of the affordability of tenants when it comes to paying rent if they have a large deposit available. Also it cuts down on instances of tenants using their deposit as their final month's rent.

utmbuilder

great so some tenant screws previous landlord and then the next one gets his arrears

Ireland is one crazy place, if a family doesnt have 10k in cash the poor ****ers have to buy sleeping bags.

Only in Ireland

It will all end in tears with landlord taking the pain as usual.

Samuel T. Cogley

First months rent last months rent and security is entirely fair. The security deposit is entirely upto the LL and tenant to negotiate, expressing it as a factor of rent is not helpful to be honest. In a top end let there would be very good reason to take a €10K deposit, even in a one bed apartment €2000 won;t make a dent in damages done if a tenant decides to go rogue.

Typical asshat TD rather than deal with the issue and introduce centrally held, or escrow deposits - I dunno with proper consequences in terms of credit ratings for deadbeat tenants, lets be less informed than your average social media user and question the legality of it. Is a lobotomy required to be a TD or is it optional?

Ann_Landers

jimmycrackcorm wrote: »

I aristocrat it's more motivated about being restricted from taking HAP or rent allowance.

Best autocorrect I have seen, hands down. :P

beauf

What is the norm elsewhere?

deposits usually are two to three months' rent, which is in addition to your first month's rent. However, the deposit will be returned with interest when you leave, provided your quarters are in good order. This usually means a renovation, and it is sometimes required that this be the work of a professional.

http://www.howtogermany.com/pages/housing.html

https://homelet.co.uk/letting-agents/news/article/how-much-is-the-average-tenancy-deposit
https://www.gov.uk/tenancy-deposit-protection

They make sure you’ll get your deposit back if you:

meet the terms of your tenancy agreement
don’t damage the property
pay your rent and bills
Your landlord or letting agent must put your deposit in the scheme within 30 days of getting it.

At the end of your tenancy
Your landlord must return your deposit within 10 days of you both agreeing how much you’ll get back.

If you’re in a dispute with your landlord, then your deposit will be protected in the TDP scheme until the issue is sorted out.

4ensic15

Some landlords are looking for a 2 month deposit and quarterly rent. It is 5 months rent up front and a quarter years's rent every 3 months after.

The_Conductor

4ensic15 wrote: »

Some landlords are looking for a 2 month deposit and quarterly rent. It is 5 months rent up front and a quarter years's rent every 3 months after.

I'm not sure whether, or not, quarterly rent is a good idea- unless the profession of the tenant supports this sort of model (or indeed- if it were paid by a company- in which case it makes perfect sense).

In an Irish context- people have to accept- one month's rent as a deposit- is not normal- and furnished property- is not normal.

As soon as people have to pay a reasonable deposit and furnish and care for their home themselves- perhaps we might be in a position where we can have a more mature conversation about the residential sector?

Gumbo

How is the deposit an income booster when ultimately it has to be given back to the tenant.

Michael D Not Higgins

kceire wrote: »

How is the deposit an income booster when ultimately it has to be given back to the tenant.

Threshold are implying that landlords are greedy and the deposit is only there for them to unfairly withhold at the end of the tenancy. Typical comment from Threshold to be honest.

4ensic15

kceire wrote: »

How is the deposit an income booster when ultimately it has to be given back to the tenant.

The next tenant also has to pay a deposit so the landlord has a virtually constant float of deposits. I know a landlord who has about 15k of deposits at any one time. He pays the property taxes with it.

gizmo81

Landlords would want to brush up on legislation if they are asking for three months deposit or quarterly rents. It just takes one person to lodge a complaint.

Discrimination on the housing assistance ground, or on any of the nine grounds, may also take the form of landlords or letting agents –

refusing to let you look at the property
refusing to rent the property to you
including discriminatory terms or conditions in leases or other tenancy agreements, whether written down or spoken
refusing to renew your lease or other tenancy agreement
end your lease or other tenancy agreement
withdrawing services related to property, or making it very hard for you to get these services.

https://www.ihrec.ie/your-rights/i-have-an-issue-with-a-service/i-have-an-issue-about-accommodation/

Without doubt three months deposit or quarterly rents are discriminatory terms or conditions.

Michael D Not Higgins

gizmo81 wrote: »

Landlords would want to brush up on legislation if they are asking for three months deposit or quarterly rents. It just takes one person to lodge a complaint.

Discrimination on the housing assistance ground, or on any of the nine grounds, may also take the form of landlords or letting agents –

refusing to let you look at the property
refusing to rent the property to you
including discriminatory terms or conditions in leases or other tenancy agreements, whether written down or spoken
refusing to renew your lease or other tenancy agreement
end your lease or other tenancy agreement
withdrawing services related to property, or making it very hard for you to get these services.

Without doubt three months deposit or quarterly rents are discriminatory terms or conditions.

https://www.ihrec.ie/your-rights/i-have-an-issue-with-a-service/i-have-an-issue-about-accommodation/

Very easy for the landlord to argue that the deposit is there to protect his property, especially if it's equally applied to all prospective renters. If you were going to challenge it on discrimination you could challenge the one month's deposit status quo as being discriminatory also.

cruizer101

kceire wrote: »

How is the deposit an income booster when ultimately it has to be given back to the tenant.

Free credit for the landlord, it shouldn't be but the reality in Ireland is that it is.
Say 10 apartments, 1500 each per month, two month deposit, that's 30,000 of credit for the landlords business, or 30,000 they can invest and earn interest on.

Two months deposit is a lot to hand over without any sort of proper Deposit holding body as there is in other countries, government really needs to look at setting up a proper scheme of some sort.

The_Conductor

gizmo81 wrote: »

Without doubt three months deposit or quarterly rents are discriminatory terms or conditions.

It is not discriminatory- if it equally applies to all prospective tenants.

The new norm in the greater Dublin area- is for multinational companies to source good quality rental properties- and to offer-

1. Up to 6 months deposit to landlords
2. Rent payable quarterly in advance
3. Professional cleaning and repainting on an agreed timescale (one property in Smithfield that I've seen the lease for- has this specified as every 36 months).

In recognition of this- the headline rate of rent- is lower- not abnormally low- but definitely 10-15% off open market rates.

I.e. the tenant accepts a far higher duty of care, and agrees to return the property akin to how its done in many US and continental markets- their rent is paid by their employer- quarterly in advance, the deposit is higher- but the headline rent is lower.

It seems to be working- and Intel and a few other employers are finding that landlords are increasingly willing to do these type deals with them.

The US Chamber of Commerce mentioned this recently.

Samuel T. Cogley

gizmo81 wrote: »

Without doubt three months deposit or quarterly rents are discriminatory terms or conditions.

Discrimination is perfectly acceptable. I might decide not to rent to gingers or people without a lot of money, of course the latter would not apply to HAP etc. those have to be considered and rejected on the former.

It's discrimination on the enumerated grounds which are a problem. Furthermore it's not even discrimination it's a natural reaction to onerous legislation.

So it's arguable at best and certainly not without doubt.

It has to be got through to people, mainly TDs that if there are no LLs or the ones in the market are either stuck or so thick as to not be able to engage with the discussion that the rental market will collapse and the government will finally have to provide social housing. I'd welcome that in all honesty but the interim step is so many homeless people we start to see street children and families.

Also before anyone swoops in with well large companies etc. etc. Yes for those looking for something to akin to a hotel yes there will always be rentals, less than 10% of renters will be able to afford the properties though.

The_Conductor

cruizer101 wrote: »

Free credit for the landlord, it shouldn't be but the reality in Ireland is that it is.
Say 10 apartments, 1500 each per month, two month deposit, that's 30,000 of credit for the landlords business, or 30,000 they can invest and earn interest on.

Two months deposit is a lot to hand over without any sort of proper Deposit holding body as there is in other countries, government really needs to look at setting up a proper scheme of some sort.

It is not normal for the government to run the scheme- and it would also not be normal for a body such as the RTB to administer it- as it proposed in Ireland.

If a deposit scheme gets handed over to the RTB- you can forget this ever working properly- its already viewed as wholly partisan in nature and incredibly dysfunctional.

davo10

4ensic15 wrote: »

The next tenant also has to pay a deposit so the landlord has a virtually constant float of deposits. I know a landlord who has about 15k of deposits at any one time. He pays the property taxes with it.

The implication here is absurd. The LL is required to return it at the end of the tenancy, if he doesn't then the RTB can get involved.

Also, so what if there is €15k worth of deposits?, all that means is that he has multiple properties. Nothing untoward about that.

Ive taken up 1st, last month's rent and deposit of equivalent to one month (amount equal to 3 months) on signing of leases for years.

gizmo81

The_Conductor wrote: »

It is not discriminatory- if it equally applies to all prospective tenants.

The new norm in the greater Dublin area- is for multinational companies to source good quality rental properties- and to offer-

1. Up to 6 months deposit to landlords
2. Rent payable quarterly in advance
3. Professional cleaning and repainting on an agreed timescale (one property in Smithfield that I've seen the lease for- has this specified as every 36 months).

.

Can you link to examples of what you've outlined please, I haven't come across these.

Give a ring to IHRC because they are confident it is covered. All people, regardless of circumstances, must have the same access to services. If a rent is affordable to you but a condition of a lease e.g. deposit excludes you then you have a case.

Dravokivich

beauf wrote: »

What is the norm elsewhere?

I don't think this is a matter of "what's the norm elsewhere?" It should be what can the market here properly sustain. If you look at it in such a manner where 3 - 5 Months is the norm elsewhere, what is the actual cost of that? What kind of term is on leases there?

Most people who rent find it hard to afford to do so. And from what I can see browsing through daft, is more expensive than it was 9 years ago for an area i used to l rent in. A Landlord holding 3-5 months deposit is one thing. But a tenant would need to have that ready if they were to move, each time after a typical 12 month lease is finished, if not extended.

Don't know about most folks here who some to think a tenant's income should be able to absorb such demands, but as a single parent, i can't afford to have half my salary sitting around.

The_Conductor wrote: »

It is not discriminatory- if it equally applies to all prospective tenants.

The new norm in the greater Dublin area- is for multinational companies to source good quality rental properties- and to offer-

1. Up to 6 months deposit to landlords
2. Rent payable quarterly in advance
3. Professional cleaning and repainting on an agreed timescale (one property in Smithfield that I've seen the lease for- has this specified as every 36 months).

In recognition of this- the headline rate of rent- is lower- not abnormally low- but definitely 10-15% off open market rates.

I.e. the tenant accepts a far higher duty of care, and agrees to return the property akin to how its done in many US and continental markets- their rent is paid by their employer- quarterly in advance, the deposit is higher- but the headline rent is lower.

It seems to be working- and Intel and a few other employers are finding that landlords are increasingly willing to do these type deals with them.

The US Chamber of Commerce mentioned this recently.

So... having somewhere to live will be based on the company one worked for? If that company was to leave... Intel are setup to be able to shut shop rather quickly if needed.

beauf

4ensic15 wrote: »

The next tenant also has to pay a deposit so the landlord has a virtually constant float of deposits. I know a landlord who has about 15k of deposits at any one time. He pays the property taxes with it.

cruizer101 wrote: »

F..Say 10 apartments, 1500 each per month, two month deposit, that's 30,000 of credit for the landlords business, or 30,000 they can invest and earn interest on....

The major cannot do that. They have one deposit per tenancy. Which is most likely one per year or two.

two-thirds of all landlords own just one property, while 84pc own two or fewer.

gizmo81

Samuel T. Cogley wrote: »

Discrimination is perfectly acceptable. , h.

I'll bow out of this thread.

Discrimination is not acceptable.

The Equal Status Acts 2000-2015 (ESA) makes it unlawful to discriminate in the disposal of premises and the provision of accommodation on any of the nine grounds.

http://www.irishstatutebook.ie/eli/2000/act/8/enacted/en/print#sec3

Samuel T. Cogley

Dravokivich wrote: »

Don't know about most folks here who some to think a tenant's income should be able to absorb such demands, but as a single parent, i can't afford to have half my salary sitting around.

As a single parent you can't afford not to either, and I'm sorry that this is going to sound harsh but if you have an issue (God forbid) with heath or your child's health who pays the rent? You're rightly going to say feck that, health is more important which can have a disastrous affect on the LL not only financially but their health as well.

If you can't afford 3 months rent you don't belong in the private rental sector and you should be given social housing. Now I know it's not as easy as that but it should be; the private LL should be dealing with a very specific subset of client not people who should be supported by the ample tax revenue generated from all sorts of income, including rental income.

Samuel T. Cogley

gizmo81 wrote: »

I'll bow out of this thread.

Discrimination is not acceptable.

The Equal Status Acts 2000-2015 (ESA) makes it unlawful to discriminate in the disposal of premises and the provision of accommodation on any of the nine grounds.

http://www.irishstatutebook.ie/eli/2000/act/8/enacted/en/print#sec3

Correct those nine grounds. Grounds 11-infinity are perfectly fine. Number 10 being the additional ground(s) for accommodation that oddly no one elese has to deal with.

I love Sean nos

gizmo81 wrote: »

Give a ring to IHRC because they are confident it is covered. All people, regardless of circumstances, must have the same access to services. If a rent is affordable to you but a condition of a lease e.g. deposit excludes you then you have a case.

Just spoke with someone at the IHREC. No need for the "discriminatory" deposit requirement. They'll indemnify the landlord against damage to the property and overholding by the tenant. It's all good.

Hold! No they won't. I was just imagining that. Since they won't put their money where their mouth is, who cares what they think.

beauf

Dravokivich wrote: »

I don't think this is a matter of "what's the norm elsewhere?" It should be what can the market here properly sustain. If you look at it in such a manner where 3 - 5 Months is the norm elsewhere, what is the actual cost of that? What kind of term is on leases there?

Most people who rent find it hard to afford to do so. And from what I can see browsing through daft, is more expensive than it was 9 years ago for an area i used to l rent in. A Landlord holding 3-5 months deposit is one thing. But a tenant would need to have that ready if they were to move, each time after a typical 12 month lease is finished, if not extended.

Don't know about most folks here who some to think a tenant's income should be able to absorb such demands, but as a single parent, i can't afford to have half my salary sitting around.....

gizmo81 wrote: »

I'll bow out of this thread.

Discrimination is not acceptable.

The Equal Status Acts 2000-2015 (ESA) makes it unlawful to discriminate in the disposal of premises and the provision of accommodation on any of the nine grounds.....

The reality is there is a shortage of rental properties. Shortage of LL's. Making it uneconomical to be a LL isn't gong to fix anything. it will just make the shortage worse. LL should have stronger protection, to match the protection tenants have.

wordofwarning

cruizer101 wrote: »

Say 10 apartments, 1500 each per month, two month deposit, that's 30,000 of credit for the landlords business, or 30,000 they can invest and earn interest on.

I wonder what all Irish landlords will be buying with the 0% interest they are earning on savings at the moment? BOI offers zero interest on demand accounts!

gizmo81

Samuel T. Cogley wrote: »

If you can't afford 3 months rent you don't belong in the private rental sector [/B.

Majority of people struggle from week to week. This post seems completely deluded.

https://www.irishtimes.com/news/consumer/one-in-four-parents-will-see-child-go-short-over-back-to-school-costs-1.3165648

http://www.independent.ie/irish-news/dublin-life-is-unsustainable-meet-the-professionals-who-left-for-the-midwest-to-enjoy-a-better-quality-of-life-35923655.html

I love Sean nos

gizmo81 wrote: »

I'll bow out of this thread.

Welcome back! I hope you're well rested after your 8 minute hiatus.

gizmo81 wrote: »

Majority of people struggle from week to week. This post seems completely deluded.