Reforms Needed to Create Efficiencies in Private Rented Sector

Press Releases

-Threshold launches Annual Report –

Wide-ranging reforms in the regulation of the private rented sector, coupled with a reconfiguration of the State’s relationship with landlords, could yield significant cost efficiencies as well as better standards across rented accommodation. That’s according toThreshold, the national housing organisation, which today (09.11.10) launched its annual report.

The report documented a marked rise in the number of cases concerning the unjustified retention of deposits by landlords, which accounted for one quarter of the organisation’s case-load in 2009. It also highlighted an increase in cases concerning poor standards of rented property. Illegal evictions featured as another key area of tenant representations to Threshold in 2009.

Addressing today’s launch, Chairperson of Threshold, Aideen Hayden, said: “Last year saw the recession starting to have a discernable impact on those living in the private rented sector. Threshold experienced a bigger caseload, with more tenants seeking advice on breaking leases because they could no longer sustain high rents due to unemployment and income losses. We also saw a significant increase in clients in rent and mortgage arrears.

“The growing problem of unreturned deposits would suggest that landlords are feeling the pinch too: it seems that, increasingly, landlords don’t have the cash to return deposits to compliant tenants. Other landlords are not maintaining their properties, which has contributed to the growing number of complaints about sub-standard accommodation,” said Ms. Hayden.

Rent Supplement Reform
Threshold said that – in order to address the complex and multiple problems now characterising the private rented sector – sweeping reforms are required in the relationship between the State and landlords.

“There appears to be a general political consensus that cutting rent supplement is an easy option in the upcoming budget,” said Ms.Hayden. “However, in itself, a cut in rent supplement is a very blunt instrument. Last year, when rent supplement was cut by eight per cent, only one third of landlords responded by offering a similar reduction in rent. Effectively, the cut put an increased onus on rent supplement tenants to give an illegal top-up to their landlord.”

Based on this experience, Threshold is proposing that the State negotiate directly with landlords, rather than leaving this up to individual tenants. “It is inappropriate for the Department of Social Protection to place all the burden of negotiating a lower rent on vulnerable tenants,” said Ms. Hayden. “Instead, we are proposing that rent supplement bepaid directly by the State to the landlord. This direct payment system would reduce potential for abuses and create administrative efficiencies.”

Other advantages of a direct State-landlord relationship would be to give landlords greater rent certainty; enable the State to negotiate
more favourable rents; and ensure that only those landlords who meet their legal and tax obligations receive rent supplement from the

Deposit Retention
In addition to reforming rent supplement, Threshold said the growing problem of deposit retention needed a legislative response. Last year, 4,125 clients came to Threshold because they could not secure a return of their deposit. The average deposit retained was just under €1,000. “Threshold is now reiterating our call for the introduction of a deposits protection scheme. We would like to see a system put in place, whereby deposits collected by landlords would be lodged with the Private Residential Tenancies Board and returned to complianttenants at the end of their tenancy. Where tenants are in arrears or have damaged a property, landlords are obviously perfectly entitled
to retain some or all of their deposits.

“Apart from protecting tenants and reducing disputes, the scheme would act as a revenue source for the State through income from theinterest on the deposits,” said Ms. Hayden.

Threshold’s Annual Report also highlighted an increase in cases concerning accommodation standards.

According to Threshold, the rented sector has almost completely replaced social housing when it comes to providing for people with housing needs. In 2009, the State spent €500 million on rent supplement to support tenants in the private rented sector.

“Given the level of expenditure by the State on rent supplement, it is vital that the money is only spent on quality accommodation. To this end, the reform of standards regulations – which came into effect in February 2009 – are very welcome because they set out very clearly the responsibilities with which landlords must comply when letting accommodation,” said Ms. Hayden.

However, in spite of this, last year Threshold dealt with almost 1,000 cases of substandard accommodation: of these, 40 per cent concerned rent supplement tenants.

“We are concerned that legislation around minimum standards in private rented accommodation is not being sufficiently enforced. Some local authorities have only identified a handful of cases of sub-standard accommodation; others have not identified any, which is not credible based on our case-load.

“We are appealing to the Government to guarantee that no-one who rents a property with State money will live in unfit accommodation. The introduction of a ‘certification scheme’ for private rented accommodation – similar to the Building Energy Rating Certificate – would help underpin regulations. It would cover all aspects of property compliance from plumbing works, heating and fire safety, and should be quite cost-efficient for compliant landlords,” said Ms. Hayden.

Illegal Evictions
The number of illegal evictions dealt with by Threshold in 2009 remained worryingly high: the organisation dealt with 947 illegal evictions based on issues such as rent arrears; failure of the landlord to repair property; and the payment of rent supplement. An illegal eviction is where a tenant is physically removed from their home.

According to Aideen Hayden: “Illegal evictions can involve a landlord changing the locks, intimidating a tenant out of their home, or throwing out and destroying a tenant’s belongings. Every day, Threshold sees the devastating effect of illegal evictions on people’s lives. Illegal evictions make people homeless and turn their lives upside down. It is absolutely unlawful to lock someone out of a rented property with or without their belongings. Landlords who have a grievance with their tenants have a legal route to resolve disputes through the Private Residential Tenancies Board in a fair and legally compliant manner.”

According to the Threshold Annual Report, the greatest number of illegal evictions concerned rent arrears, and most concerned relatively low levels of money. “Given the tens of thousands of people who have lost their jobs, it is not surprising that rent arrears are becoming problematic. However, even-handedness and compliance with the law is essential at all times,” she added.


About Threshold
Threshold was founded in 1978 and is a not-for-profit organisation whose aim is to secure a right to housing, particularly for households experiencing the problems of poverty and exclusion. Its main concentration of work is within the rented sector. The organisation operates a national office, based in Dublin, and three regional offices. In 2009, the organisation provided advice and representation to almost 22,000 people.

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