JOINT COMMITTEE ON THE ENVIRONMENT, HERITAGE AND LOCAL GOVERNMENT debate -
Tuesday, 28 Jul 2009

Residential Tenancies: Discussion with Threshold and the Institute of Professional Auctioneers and Valuers.

Vice Chairman

Members may recall from our meeting on 30 June that we discussed residential tenancies with the Irish Property Owners Association and the Private Residential Tenancies Board. Arising from those discussions a request was made by Threshold and the Institute of Professional Auctioneers and Valuers to meet the committee. I welcome the delegations from both organisations. We will hear from the Threshold delegation for the first hour of the meeting, although it may not take that long, followed by the submission from the IPAV.

From Threshold we have Aideen Hayden, chairperson; Bob Jordan, director, and Kevin Baneham, legal officer. The delegation will give a brief presentation of its work followed by a question and answer session. Before we begin, I draw attention to the fact that members of the committee have absolute privilege but this same privilege does not apply to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.

I call Mr. Jordan.

Mr. Bob Jordan

We welcome the invitation to address the committee today on the Residential Tenancies Act, particularly following the committee's deliberations at a recent meeting. We wish to add the tenants' perspective to the members' deliberations as that perspective has not been given to the committee before today. I will give a brief overview of Threshold and then discuss the issues of rent deposits in the private rented sector, the standard of accommodation in the private rented sector, dealing with serious issues through the PRTB such as evictions, over-holding and rent arrears, and the recent cuts in rent supplement and their impact on the private rented sector.

Threshold was established in 1978 to campaign for a fairer housing system. At the time tenants in the private rented sector had the least legal protection and lived in poor quality accommodation. Today we campaign on issues affecting social housing and homelessness as well as our particular interest in the private rented sector.

We seek to deliver better housing outcomes for our clients. Threshold provides an advice and advocacy service for tenants as well as providing landlords with advice. More than 700 landlords approached Threshold for advice in 2008. In 2008, Threshold's offices in Dublin, Cork and Galway dealt with more than 20,000 advice queries from tenants. Given our advice work with landlords and tenants, we interface with a significant number of people in the private rented sector. This forms the basis of our expertise in the private rented sector and the basis of our submission to the committee today.

Threshold provides a free advocacy service for tenants at hearings of the Private Residential Tenancies Board. Our clients often have literacy or language difficulties and are therefore in a weak position to argue their cases at contested hearings. Our trained advocates assist them in making their cases.

Threshold also offers a placement service to help people who are homeless and at risk of homelessness to find housing. Many people in that position have been in and out of hostels or emergency accommodation and require help at the start of a tenancy to settle into private rented homes.

We will speak later about the effect of the recent cuts in rent supplement on a particularly vulnerable group of people. Overall, our approach is to help tenants solve their housing problems. Whatever problem is presented, there is always something that can be done to solve it or advance the position of the tenant as best we can. This is a practical approach which is particularly helpful to the most vulnerable tenants. It involves lifting the telephone and talking to landlords about their obligations and rights and those of their tenants. In most cases, this informal approach can be used to resolve disputes. Only 16% of deposit retention cases had to be referred to the PRTB in 2008; in the remainder we were able to resolve the dispute without taking legal action. We dealt with approximately 3,600 such disputes last year, more than double the approximately 1,600 such cases dealt with the previous year.

In cases involving substandard accommodation we liaise with the local authority to arrange inspections and have improvement works carried out. This has meant we have had to refer only 3% of cases to the PRTB. Similarly in terms of invalid notices being given, only 6% of cases were referred to the PRTB. An invalid notice arises where a landlord does not give a tenant sufficient notice under the Residential Tenancies Act to vacate the accommodation. Following our intervention, the landlord withdraws the invalid notice to enable the tenant to continue to live in the accommodation or to allow a valid notice to be served, therefore giving the tenant the required notice to which he or she is entitled.

This informal dispute resolution service ensures our clients receive that to which they are entitled. It also ensures many disputes are not referred to the PRTB. The Minister has appointed a nominee from Threshold to the board of the PRTB in the same way that nominees of property and landlord bodies are represented on it.

I will address a number of issues arising in the operation of the Residential Tenancies Act.

Vice Chairman

The document has been circulated to members. Will Mr. Jordan summarise its contents as it extends to some eight pages?

Mr. Bob Jordan

Yes. One of the main issues arising in the operation of the Residential Tenancies Act is the need for a deposit protection scheme. Some 43% or nearly half of cases referred to the PRTB relate to instances where the tenant's deposit has been withheld. This obviously creates considerable additional work for the PRTB. We propose a solution that has been implemented in other countries, whereby the deposit would not be lodged with the landlord at the beginning of the tenancy but with the PRTB. This would mean that at the end of the tenancy this independent body would be able to return the deposit to the landlord or the tenant, depending on whether the tenant was in arrears or owed money to the landlord for damage to the property. This system operates in Australia and the United Kingdom. In introducing this system we would remove from the remit of the PRTB approximately half of the cases referred to it and speed up the dispute resolution process, which would mean other serious issues such as rent arrears owing to landlords or illegal evictions of tenants could be dealt with in a much speedier fashion. Tenants are required to pay a deposit of between €700 and €1,000. We propose that such deposits be lodged with the PRTB. The money could be lodged in an account that would earn interest and such interest could be used to fund a deposit protection scheme and perhaps provide funding for the PRTB or an advice service for landlords and tenants. In other words, such a system would be self-financing.

Another issue is tackling poor standards of accommodation. Poor quality standards in the private rented sector has been an ongoing issue since Threshold was established more than 30 years ago. Minimum standards regulations were introduced for the first time in 1993, but they were poor. For instance, a landlord was not required to provide a tenant with a refrigerator, cooker or central heating. We welcomed the new standards introduced at the end of 2008 and which came into force in February this year. They will significantly improve the quality of private rented accommodation available. However, we have a concern regarding their enforcement by local authorities. With the exception of Dublin City Council, local authorities have a poor record in enforcing minimum standards regulations for the private rented sector. I am not referring to out-of-date carpets or faded wallpaper but accommodation where the basic necessities for living are not provided. I refer to accommodation that does not have hot and cold running water, heating or that is infested with vermin. I am talking about slum-like accommodation. It is important that local authorities inspect such accommodation.

Some 17,000 properties in the private rented sector were found to be substandard in the 2000-07 period, yet only just over 100 legal actions were taken against landlords. A certain proportion of the money landlords provide in registration fees for the PRTB goes towards inspections, the numbers of which have increased since 2006 when the then Minister of State with responsibility for housing, Deputy Noel Ahern, said local authorities would not receive money for inspections unless they carried them out.

The standards raising needs to go one step further through the introduction of a certification regime. If somebody goes into a restaurant, he or she can be assured that it has been certified as being fit to eat in. The same does not apply in the private rented sector and that is what we are asking for. We are asking that landlords prove their accommodation is fit to live in before a tenant lives in it and that we have a certification system for the private rented sector. With the best will and action in the world taken by local authorities, they will not get around to inspecting every property in the country.

I refer to issues surrounding illegal evictions and rent arrears. Many of the issues involved concern tenants in receipt of rent supplement which is suspended by community welfare officers when they become involved in disputes with their landlords. This used to be the regime in the private rented sector before the introduction of the Residential Tenancies Act and it had a serious impact on tenants. We want to ensure the Department of Social and Family Affairs and the way the rent supplement scheme is run ensure a tenancy will continue while there is a dispute. The tenancy does not end; therefore, the Department and the HSE should continue to pay rent supplement to tenants when this occurs.

We highlight the serious issue of illegal evictions in the private rented sector. They arise when disputes occur between landlords and tenants and a landlord forces the tenant out of the accommodation. The tenant may be locked out and his or her goods may be impounded. This is a serious issue which needs to be addressed. We have provided some examples of recent illegal evictions. As a result of the current downturn, we understand many landlords are struggling to make their mortgage repayments and that, in some cases, a tenant who may be one day late in paying his or her rent can be forced out of his or her accommodation. It is very important the full protection of the Residential Tenancies Act is provided for such tenants.

Members may be aware that on 1 June there was an 8% reduction in rent supplement payments for all tenants in receipt of the supplement. Currently, the figure stands at 91,000 tenants. We made representations to the Department of Social and Family Affairs on the issue. There is a recognition that rents in the private rented sector are falling. However, they are not falling for everybody and not at the same rate. Our concern is for the weakest and most vulnerable tenants living in bed-sit accommodation. If everybody has less money, the cheapest accommodation will be in high demand, which is what is happening and rents are not falling at that end of the market. As a result of the cut in rent supplement, the tenants concerned are being placed at risk of homelessness. The actions of the Department in introducing the cut fly in the face of the Residential Tenancies Act in a number of ways. A tenant is legally entitled to a rent review once every 12 months. However, he or she must give appropriate notice to the landlord. The way the cut was introduced meant that no tenant was able to give sufficient notice to his or her landlord and seek a rent review through the PRTB. Tenants were left on their own to battle with landlords for a rent reduction. We know from dealing with vulnerable tenants with literacy, language, mental health and health difficulties that negotiating directly with a landlord is very difficult for them.

Tenants have signed up to lease agreements with landlords. A lease agreement is a commitment to pay a certain amount in rent for a certain amount of time. Very often community welfare officers will demand that a tenant provide for sight of a lease before they will issue him or her with rent supplement. Again, the cut means that these tenants have been left on their own. They have been asked to absorb the 8% cut in their welfare payment, but they have a legal agreement with their landlord to pay this money. They must find cheaper accommodation which, as I said, is not available. As a result, they must dip further into their welfare payment. We know from dealing with tenants who juggle their incomes that there comes a point when one cannot juggle one's income anymore. People are obliged to pay their utility bills, etc., and such tenants are at risk of homelessness. The way this was introduced flies in the face of the Residential Tenancies Act. In theory, at least, every tenant in receipt of rent supplement is actually in breach of the Act because the supplement is paid in arrears rather than in advance. There must be an understanding within the Department of Social, Community and Family Affairs — perhaps a message could be communicated to it by the committee — that whatever changes are introduced in respect of rent supplement and the actual structure of the rent supplement scheme must conform with the law of the land. In this instance, that is the Residential Tenancies Act.

We thank the committee for providing us with the opportunity to address it. I do not believe it will be a surprise for members to discover that Threshold is dealing with many more tenants than ever before. We are also dealing with people with whom we did not previously have contact. The individuals concerned were previously in employment. In addition, we are dealing with those who are in mortgage arrears and also with landlords. We regard the service we provide as being frontline in nature. We provide people with practical assistance which is aimed at allowing them to solve the problems they are experiencing and also at preventing homelessness. We would welcome any questions members may wish to pose.

Deputy Ciarán Lynch

I thank the representatives of Threshold for coming before the committee during the last week of July, when politicians are on holidays. They have brought us back from the beach and elsewhere.

As members are aware, it is predicted that the private residential rental sector will be an area of growth in the coming years. Property values are dropping at such a rate that renting is now an attractive option. It is not only social welfare recipients or those who could traditionally not afford housing who are moving into rented accommodation. Even those in a position to purchase property see renting as an attractive proposition. As a result, I am of the view that Threshold's estimates with regard to its client group will actually increase during the next 12 to 18 months. Threshold is, therefore, actually operating in a growth area.

I agree with the proposal regarding a deposit retention scheme. My party has examined this option and the figures indicate that if such a scheme was put in place, the State would hold approximately €500 million a year on deposit. Such money could be put to use by the National Treasury Management Agency, NTMA. In the light of the establishment of NAMA, people have become used to amounts in the billions being bandied about. However, €500 million is still a significant sum and no one — members or anyone else — should thumb their noses at it. I agree with Mr. Jordan that it would be a win-win.

When representatives of the IPOA came before the committee three weeks ago, they made a number of statements in respect of several agencies, including the PRTB. I was surprised that certain members actually agreed with some of the comments made in respect of the backlog with which the PRTB is dealing. I accept that there is a problem with the PRTB. However, one of the biggest difficulties with which that organisation must deal is the withholding of deposits. The figures show that when cases relating to the withholding of deposits are examined, the PRTB is adjudicating in favour of tenants. It is, therefore, the IPOA's members who are creating the problem. Unfortunately, Mr. Peter Faughnan and his colleagues never provided an answer in respect of this point when it was put to them at our meeting on 30 June. Perhaps they might do so at a later date.

Action must be taken in respect of this matter. As stated, it would be a win-win. It must be remembered that the deposit is the tenant's money and that it does not belong to the landlord. If the State stepped in and actually held the money on deposit, there would be a clean break with the existing system. As an individual involved in the sector recently commented to me, there almost seems to be a default position on the part of landlords at the end of tenancies which is to withhold tenants' deposits and wait to see if they come in search of them. We must tidy up the position in this regard. It would be a win-win for landlords, tenants and the Exchequer because it would get hold of at least €500 million.

That leads me to my next point with regard to rent allowance. If we moved to have a deposit protection scheme, we could tidy up a significant number of rent allowances whereby we would not actually have to pay a deposit, which money could be notionally lodged through a national deposit scheme.

Something needed to be done with regard to the State paying rent supplement. When it got into the business of paying the supplement a number of years ago, it became a significant player, if not the biggest, in the private rental sector. As a result, taxpayers were contributing significantly to an industry. I agree there is a need to have a private rental sector and that is not my criticism, as, in the main, the sector provides a very good service. However, the State invested to the tune of millions of euro every year and, by default, was interfering in the market by setting a rental value on property. If the issue is tracked, it will show that rents grew significantly following the introduction of the rent allowance scheme. Something had to be done. However, rents are now dropping. I have been critical of the Minister on occasion, but if I were him, I would have taken on this issue also and decided the State needed to step in to have some control in the market.

I have two questions. Tenants are tied in to a schedule or rent agreement for 12 months; they make an agreement with their landlord to pay a certain amount of rent for 12 months. Is it legally possible for the Minister to decide a tenant should go back to his or her landlord after signing a rental agreement to ask for an 8% reduction? In other lease arrangements I do not think there is such a luxury. A legal agreement is signed based on the amount of rent to be paid for 12 months. Tenants are now being told since 1 June this year that they should go back to their landlords to arrange an 8% decrease. I wonder if the delegation is encountering this issue. Since 1 June, a number of tenants have been engaged in the making of under-the-counter payments. For instance, if the rent is €125 a week and up until 1 June the Department of Social and Family Affairs contributed €110 a week and will now only contribute €95, the landlord has had to make some adjustment for this shortfall, which the tenant is making up unknown to the community welfare officer. If the community welfare officer knew the tenant was doing this, there would be hell to pay and difficulties with the tenancy. Is the delegation aware of tenants paying under the counter to landlords following the reduction from 1 June?

Vice Chairman

I am reluctant to interrupt the Deputy, but a good few members are offering.

Deputy Ciarán Lynch

I have asked my final question to which I await an answer. This is a significant problem because thousands are now caught in this dilemma. Would it have been more advisable for the Department to have given notice that rent supplement was to be reduced rather than make the reduction on 1 June? It might have been preferable to announce a date of 10 October or 12 November for its introduction. This would have given the market time to adjust and for a reduction in rents to be considered.

Vice Chairman

I ask the next speaker to confine his contribution to questions, if possible.

Senator Camillus Glynn

I apologise to the representatives of Threshold for my late arrival, but I have read their submission. In some 30 years in public life I have come across many situations involving landlords and tenants. It is a truism that landlords need tenants and that tenants need landlords; one complements the other. There are some very good landlords and, equally, there are some very bad ones, as there are very good and very bad tenants.

I have considered the matter over a long time. I put it to Threshold that local authorities should handle the entire matter. They should set the scale of rents, as happens in the United Kingdom, because they do have the expertise and local knowledge through the locally elected member. This will be particularly pertinent in urban authorities. I am sure their rural counterparts have an equal level of local knowledge. A register should be set up immediately of tenants who have defaulted on their agreements and, equally, landlords who have a bad record. From my experience landlords are providing accommodation that is not fit for human habitation. It is outrageous.

A few years ago a shopping centre with five apartments was built near where I live. When one tenant left, the carpets, bed and every stick of furniture was brought to the dump. In fairness, one could ask whether that landlord made any money for the duration of that tenancy. He could not have made anything. It would have cost him money.

I accept there are cases where deposits are withheld unfairly. I wish to be balanced in my views. In many cases the deposits retained do not cover the damage done to properties by tenants. We must be fair. I would like to hear what proposals the delegation from Threshold has in that regard.

I note there are a number of agencies, but one can ask how well they are working. Are they working in favour of the tenant and are the landlords' interests being served? There is right and wrong on both sides and defaulters on both sides. This whole area should be handed over to local authorities, as is the case in the United Kingdom. Such a system would work better. I have a relative in the United Kingdom who lives in rented accommodation and I made it my business to find out information on the system there, which appears to be the best approach.

Senator Paudie Coffey

I do not wish to repeat much of what has been said. I welcome the representatives from Threshold to the committee and acknowledge the more than 30 years of work by the organisation on a charitable basis, especially the advocacy and advice provided to vulnerable people.

From what has been said, it appears that much of Threshold's work is done through informal dispute resolution. I was surprised to hear that the main problem dealt with by Threshold is invalid notice — I presume to tenants — when a landlord wants to move them out of a property. The second most frequently arising issue is help in finding housing. I am amazed to hear that because there are many agencies that can assist people to find housing. As Senator Glynn outlined, local authorities are responsible for housing but there is room for improvement if so many people are going to Threshold rather than to local authorities when they are looking for housing.

Deposit retention is the third most frequently occurring issue that arises for Threshold. The PRTB has highlighted it as one of the major complaints that comes before it. That is an issue that requires attention. There is great merit in what has been said by the representatives of Threshold. From listening to what was said by the PRTB representatives when they were before the committee, I would not have confidence in it handling that amount of money, given the inefficiencies and backlogs in the PRTB. That is an issue for the Department to address. The PRTB has in excess of €10 million on its books because local authorities are not carrying out inspections as they should be. That is not the fault of the PRTB but of the local authorities. More co-ordination is required in dealing with the rental sector. Agencies such as Threshold work at the front line and are aware of problems encountered. If there were better co-ordination and management of the rental sector by the Government, relevant Departments and local authorities, which have a major role to play, many of the problems with which the delegates are dealing daily would not arise. There is merit in what was said about lodging the deposits with an agency such as the Private Residential Tenancies Board, but it is certainly not in a state to accept them at present. Much work needs to be done in this area.

I was surprised to find complaints concerning standards are ranked only fourth in the categories of complaints received by Threshold. As Senator Glynn stated, standards are an issue in both the public and private sectors. Local authorities themselves have many questions to answer with regard to standards, as acknowledged in the presentation. Is it only at the behest or nudge of Threshold that local authorities carry out the inspections? Are some better than others? We would like to hear up front whether this is the case. We need to know whether some local authorities are good at inspecting and whether others are not. The delegates need not name individual local authorities.

There is a role for the Department in re-examining the roles of the Private Residential Tenancies Board, charitable agencies such as Threshold, local authorities and landlords' representative associations to determine how many issues could be dealt with by agencies other than State agencies. Many issues can be resolved informally, as Threshold has been doing.

With regard to financial sustainability, I notice Threshold's grants and miscellaneous income have decreased. Is the organisation sustainable? It depends a lot on fund-raising, which I presume will suffer in the current economic climate. How will the organisation sustain itself in the coming years?

Deputy Edward O’Keeffe

I welcome the delegates from Threshold and compliment them on their great work.

The question of eviction is beginning to arise. Evictions are taking place and people are being threatened therewith. The banks were in a hurry to give out money a couple of years ago and are now in a hurry to get it back. What support can be given to families being threatened with eviction? It is very frightening and is treated very confidentially. Often people threatened with it do not seek support or help until the last minute.

In the financial world the bigger operators can obtain the protection of the courts but the small person does not have the money, legal support or accountancy services to do so and is therefore very vulnerable. In the financial world there is a race to get the first people out of the way. While we are very critical of our native banks, I do not believe they are as aggressive with mortgage holders and tenants as the banks that came from abroad in the past five or six years. The latter are acting very aggressively and hurting people. What protections exist and what can the Parliament and organisations such as Threshold do to rescue those in difficulty?

Vice Chairman

Mr. Jordan mentioned that there is a problem with landlords evicting tenants. Will he elaborate on this? I have received representations to the contrary and I am aware of cases in which tenants had not been paying rent for a long period and could not be forced out. Even court judgments resulted their being given another three months in the property before being forced out. How do landlords force tenants out?

Deputy Johnny Brady

I welcome the delegates from Threshold.

I agree with Senator Glynn on the register of bad landlords and tenants. We have all seen both in our time as public representatives. Like others I am sure, I come across cases in which tenants do not pay their rent for their last six months or six weeks in a property. This eats up the deposit and, effectively, the house is wrecked.

In some instances, local authorities are equally as bad as those involved in the private sector as regards tenants. I have come across a number of cases in recent years in which they allowed arrears of rent to reach levels of €14,000 to €16,000. It is crazy that any local authority would allow a tenant to accumulate arrears of that level because most of the people concerned are on social welfare and will never be able to pay back that amount of money. I would not be in favour of the local authorities taking charge of the private rental sector because they cannot look after their own tenants.

Ms Aideen Hayden

I ask the committee to bear with me as quite a number of questions were asked. No matter how quickly I wrote, I found it difficult to capture all the points made by the various contributors.

I shall start by making a general point to the effect that many of Threshold's clients would not be in the private rental sector today if they had a choice. A significant number of them are on social housing waiting lists and have been assessed as being in need of housing. It is important to say a number of tenants in the private rental sector would have the support of local authorities were they social housing tenants. It is fair to say also that the work of local authorities in supporting their tenants has improved dramatically in the last decade. The reality is that because the number of social housing units built has not kept pace with the demand for social housing, there are many in the private rental sector who in previous decades would have been social housing tenants and, as such, the responsibility of the local authorities, as Senator Glynn said. It is a difficulty that Threshold constantly tries to address to provide support for vulnerable people in the private rental sector who, in other circumstances, would be the clients and tenants of local authorities.

As regards a deposit protection scheme, it is important to bear in mind that the rental sector mainly comprises small-scale landlords who own one or two properties. They are not professionals in the field. Many of them have only become involved in renting property in recent times as a means of building up a pension equivalent for themselves or to provide for their children. Many of them have purchased buy-to-let properties without getting any real advice about the difficulties in renting property, the responsibilities attached to being a landlord and the fact that there will be voids from time to time when tenants leave and so on. Therefore, there are many landlords involved who are not professionals in the field. They do not maintain separate bank accounts, for example. When they receive a deposit, it becomes mixed up with their personal funds.

Another difficulty is that a number of private landlords depend on letting agents to rent properties for them. It is quite common that the deposit — one month's rent — is the same fee paid to the letting agent for letting the property. That often means the deposit does not go to the landlord but stays with the letting agent. All of this contributes to the fact that it is more difficult for the private landlord to return the money at the end of the letting period. The reality is that deposits are significant — €1,000 or €1,200 is a considerable amount of money and often an individual landlord may not have this sum at his or her disposal. There is a culture in Ireland, whereby deposits are simply not repaid. That is the bottom line, as has been acknowledged in a number of studies. As Deputy Ciarán Lynch said, a significant amount of State money is tied up in deposits, which is lost to it because of the culture within society, whereby deposits, unfortunately, are often not repaid at the end of a tenancy. As Mr. Jordan indicated, this can lead to significant difficulties for individual tenants and even homelessness. It is very difficult for people to understand what it is like for somebody to be made homeless because he or she either cannot move from an unsuitable property which does not meet minimum standards or is forced to move without having the money to secure alternative accommodation. For a significant number of tenants, €1,000 is an incredible amount of money. It is the kind of money that they cannot easily find to secure other accommodation.

It is Threshold's view that, irrespective of how such a deposit protection scheme would be set up, there is no doubt that not only would it protect many vulnerable people from the risk of homelessness, it would also provide appropriate funds to maintain a system of dispute resolution, rather than costing the Exchequer more money. I understand there are difficulties with delays in the PRTB, but were the PRTB to be appropriately resourced and given that it is already managing the registration process, it would be an obvious extension of its responsibilities to take in deposits from tenants. This would also provide an opportunity to improve the level of professionalism in the sector. For example, when a deposit was lodged with the PRTB, one could include a signed statement on the condition of the premises that might address some of the concerns of committee members and that would be sought by the body accepting the deposit. Unfortunately, many landlords regard their rented properties as places where they can put furniture left over from their dead parents' estate, with other unwanted furniture. Lodging a deposit with an appropriate authority would provide an opportunity to professionalise matters and find out how old was the fridge, cooker, carpet and so on. All of these matters would be agreed between the landlord and the tenant at the beginning of the tenancy. As a result, we should not experience half of the issues currently dealt with by organisations such as Threshold or even the PRTB. There is an opportunity to bring professional standards to the private rented sector. The setting up of a deposit protection scheme would present such an opportunity.

The second point dealt with the potential to have local authorities play a greater role in the private rented sector. I certainly agree that this could be so. We are probably all aware of the tussle that has continued for a number of years between the Department of Social and Family Affairs and the Department of the Environment, Heritage and Local Government regarding the payment of rent supplement. Rent supplement was first introduced as an emergency payment to sustain people who found themselves temporarily unemployed owing to a number of factors, especially the failure to build a significant amount of social housing units in the 1990s. It became the main way by which people were housed in "appropriate" accommodation. The difficulty was that the rent supplement scheme went out of control. There were a number of attempts to transfer it to the Department of the Environment, Heritage and Local Government, as it was agreed that many in receipt of the supplement had a long-term need for housing and that this should be the responsibility of that Department and the local authorities.

We are beginning to see a move in this direction through the rental accommodation scheme. We welcome this, as we accept that in the current environment the scheme represents the best opportunity for many of our clients to achieve some decent living standards in the rented sector. The ultimate solution is the appropriate provision of social housing, but in the meantime we acknowledge the benefits of the scheme for some categories who are housed in the private rented sector such as single men and lone parents with one child. Such persons have had a very difficult time in securing appropriate accommodation. The rental accommodation scheme has been the way by which these groups can find themselves in appropriate housing. I agree that a greater role for local authorities needs to be found in housing those with a long-term need for housing. In the current environment many more are finding themselves in this position. Threshold is aware that many took on home ownership at a time when it was very expensive and that they may now find themselves in severe difficulty. In the future we may find that people will not be so anxious to take on home ownership. Local authorities, therefore, should play a more active role for this category.

There have been several reports on the role of rent supplement in the market. For example, the Centre for Housing Research has made the point that rent supplement represents the floor rather than the ceiling for rental payments. An issue of particular concern to Threshold in recent years is the number of tenants who are topping up their rent supplement payments. In a study conducted in Cork in 2001 to 2002 we found that one third of rent supplement tenants surveyed were topping up out of very scarce social welfare payments. Many of those in receipt of rent supplement are experiencing consistent poverty, that is, they cannot afford to feed and clothe themselves appropriately and pay bills as they arrive. Several of the arrears cases that come to our attention involve tenants who are no longer able to afford this illegal top-up because of a significant decline in their discretionary income. Sources of income available to them in the past such as contract cleaning have dried up. In some cases, therefore, people are falling into arrears because they are no longer in a position to make these unlawful top-ups. They are no longer able to sustain themselves and are experiencing greater degrees of poverty than they were during the years of the Celtic tiger. These are the unfortunate facts of the recession.

We agree there must be more rigorous enforcement of the rent supplement scheme to prevent these unlawful payments. Threshold has proposed for many years that rent supplement payments should be made directly to landlords in order to eradicate this practice of encouraging, if not insisting upon, top-up payments. Tenants were seriously prejudiced by the amount of top-up they were forced to make when the rental market was galloping out of control. In 2007, for example, rents increased by up to 30% in some cases. Some 40% of the market is currently accounted for by rent supplement tenants, which means the Government has a very important role to play in the sector. Several speakers have made the point that the State is the largest player in it. As such, it has the greatest responsibility.

The State is also the arbiter of standards in the rental accommodation sector and we are all aware that there have been significant difficulties in enforcing these standards. It must use its role as the largest player in the rental sector to negotiate directly for properties. There is no reason we should continue to administer the sector in the way it is currently run. There are many opportunities in the current environment for longer term rental arrangements which would benefit both the State and the tenant. We have always argued that if the supplement were paid directly, the State would have greater influence in determining rent levels. There is an argument that local authorities are in receipt of better information than community welfare officers. It has been of great concern to Threshold during the years that the level of rent supplement payment for single people, including for bed-sit accommodation, is hopelessly inadequate. We have consistently made the point that at some levels the caps are quite generous, whereas at other levels, particularly for single people, they are entirely inappropriate.

In regard to standards, I am afraid to say that, historically, it was the experience of tenants and Threshold that tenant complaints about standards regularly resulted in an eviction. That culture persists. As Mr. Jordan observed, there are two rental sectors in the State, one for those who can afford to survey properties and negotiate with landlords on rents and the other comprising those who are dependent on rent supplement. Our research and that of others shows that less than 50% of landlords want to accept rent supplement tenants. We all know that part of this owes to prejudice towards the poor. The other problem is the way in which rent supplement is paid, namely, in arrears, not in advance. Someone in employment can sign a direct debit order paying in advance and so forth, but rent supplement tenants are discriminated against because of the payment method. If we want to level the playing field, we must change that method. Doing so would provide tenants with greater choice and remove from the system landlords who, because they can get away with it, are putting substandard properties onto the market.

The State must recognise its control over 40% of the market and use it to ensure the protection of tenants from poor quality accommodation and unscrupulous landlords prepared to accept top-ups from those on social welfare payments and who cannot afford to pay.

Mr. Bob Jordan

A question on evictions was asked. Under the Residential Tenancies Act, if a tenant is in arrears, he or she can get 14 days' notice to repay. Thereafter, he or she can be issued with one month's notice to quit. In other words, he or she can be out within six weeks. That is the legal process. If anti-social behaviour is the issue, seven days is the period under the Act. Proof would be required, but gardaí calling to the house would probably be sufficient. The Act contains measures to address this matter.

Where tenants fall one day or one week in arrears and are forced out of their homes is offensive to us all. We are referring to people who are locked out of their homes and have their bags dumped into the rain and their belongings destroyed. We must take this edge off the private rented sector. The Act contains sufficient legal procedures for landlords if a tenant is in arrears.

I wish to address the question of Threshold's financial stability. Continuing our services is a challenge. It is a typical situation for everyone on the front line during a recession, in that more people with problems approach one when one has less money with which to help them than previously. Last year, we closed our advice centre in Limerick because of insufficient funding to keep it open. Everyone present is aware of housing problems and difficulties in Limerick. It seems inappropriate that an organisation like Threshold, which has so much experience, would not have the resources to be present on the ground and to help out with these issues. We dealt with thousands of cases in Limerick while we were there. Our offices in Dublin, Cork and Galway are busier than ever before.

We rely heavily on funding from local authorities and the HSE. Members will be aware of the HSE's funding situation. Equally, local authorities are struggling. The amount we get is small. State funding is a big issue for us. We anticipate getting our grant from the Department of the Environment, Heritage and Local Government this week, which we hope will at least be at last year's level. It would enable us to keep going during this recession. We have faced deficits in our accounts for the past two years, but we are doing our best. The service that we provide is incredibly cheap to run from the perspective of tenants and the State. For €22 per hour, we can provide advice to people that will stop them from being evicted and becoming homeless.

Sometimes it is not acknowledged that Threshold also helps landlords. Last year, we helped 700 landlords. Since the Act that applies to the private rented sector is the same for landlords and tenants, our advice is the same, although it is slightly different from a landlord's perspective. As Ms Hayden has stated, we acknowledge that many landlords started renting as an investment without sufficient advice. It is inappropriate that there is no advice for people considering entering the private rented sector on the issues of dealing with tenants and managing their investments during the downturn.

The question of helping people to find housing was raised. Those who approach us are poor people seeking cheap accommodation. As we have good relationships with landlords, we are able to find accommodation with landlords who are willing to accept people who have experienced homelessness and are vulnerable in terms of their mental or physical health. People are able to get appropriate good quality accommodation because it is vetted by us. Helping people in this way during the current downtown is a significant role we play and one of our units is dedicated to it.

With regard to tenants who do not pay the last month's rent, this is illegal under the Residential Tenancies Act. However, it does not happen any more, the reverse is the case. At present, we deal with many tenants who are leaving the private rented sector and trying to find cheaper accommodation and who, as Ms Hayden stated, do not get their deposits back. To the tenants we deal with, a couple of hundred euro amounts to savings for six months to a year. There is no way they will be able to make up the money and move on to further accommodation.

The one issue we want to leave with the committee is that of deposit protection; it is the biggest single issue in the private rented sector and with the PRTB. Last year, the number of cases coming to Threshold more than doubled. This is because there is a culture of not returning deposits in the private rented sector. We know landlords are struggling and when this money is absorbed into one's account the temptation is to not pay it back because it becomes part of one's regular income. To protect landlords and tenants it needs to be held in a safe place so that it is returned to tenants at the end of the tenancy.

Vice Chairman

We must conclude with this deputation. I thank the delegates for their presentation. If members want to continue this discussion, we must decide on a finishing time as another deputation is due before the committee. I do not mind how many members wish to contribute.

Senator Camillus Glynn

My question is one sentence.

Vice Chairman

We must decide on this first; shall we continue until 1.30 p.m.? It is now 12.15 p.m.

Deputy Ciarán Lynch

Ten minutes.

Senator Paudie Coffey

I propose we take ten more minutes.

Vice Chairman

What time do members want to finish the meeting?

Deputy Ciarán Lynch

When we finish.

Vice Chairman

I do not want to be here on my own at 2 p.m. I want to be clear with members on what time they want to finish the next session. Once we decide on that I do not mind how much time is given to anybody.

Deputy Johnny Brady

The latest should be 1.30 p.m.

Vice Chairman

Okay. We shall give this ten minutes.

Senator Camillus Glynn

I do not dispute what Ms Hayden stated about deposits.

Vice Chairman

I request that members ask a question.

Senator Camillus Glynn

In the case of a landlord whose property has been very badly defaced and maltreated by a tenant, how does he or she get compensation to restore the property?

Senator Paudie Coffey

The delegates emphasised the fact that a deposit protection scheme is of high priority for Threshold and the committee needs to note that in the deliberations we take from today's meeting. As I stated with regard to the Private Residential Tenancy Board, it needs to be acknowledged that the board does not even have an IT system to properly manage the registration system it is obligated to manage; it is done manually by paperwork and there is a huge backlog. It will be mid-2010 before the PRTB's IT system for registration will be finalised.

On a number of occasions Ms Hayden mentioned that social housing policy and build policy did not keep pace over many years through the 1990s and that created the huge dependence on the private rental sector. She welcomed the rental accommodation scheme, RAS, but it is a second preference; first preference will always be that local authorities will continue to provide social housing to meet the huge demand on the housing lists. What is the delegates' experience of local authorities' engagement with RAS? In my experience there seems to be a slow uptake on the part of local authorities. The Department wants them to engage with private landlords and establish rental accommodation schemes in their local authority areas. How many of Threshold's clients are getting into them? Is there a quick transfer from private rental accommodation into RAS houses or contracts?

Deputy Michael Fitzpatrick

Independent advice was mentioned and I feel that Threshold is more oriented towards the tenant than the landlord. That is the way it appears to me in coming here today.

There is often a middle man between the landlord and tenant, namely, the letting agent. There are many highly respected letting agents who deal on behalf of the landlords. There was no reference here to the letting agents, yet in many cases, these transactions would be carried out by letting agents, rather than the landlords. Has the delegation any hard facts on landlords not accepting rent subsidies? How many landlords refuse to accept such subsidies in any given year? I do not understand why that would be the case, given that things are all above board with the creation of the PRTB.

The final point I would like to raise concerns the anti-social behaviour of tenants. I have a little knowledge of letting property. When a tenant vacates a house following a short period of time, it often costs the landlord more than he actually received in rent.

Deputy Ciarán Lynch

If Deputy Fitzpatrick gets his evening newspaper today and looks at the words "NRA" in the letting section, that is shorthand for "No Rent Allowance". Therefore, this is happening in the market.

I would like to ask a few questions, bearing in mind that we must figure out what we on this committee are going to do after meeting with the IAVI, the IPOA and Threshold. There is in excess of 250,000 private residential properties registered with the PRTB, and 91,000 of these are receiving rent allowance where the State is investing money. About 6% of all these houses are inspected. A circular letter was issued as part of today's agenda and it goes out to every local authority. Its reference number is PHS 6/2009, and section D of the letter refers to the enforcement of statutory regulations for private rental accommodation. One member of the committee this morning stated that there was no need to name a particular local authority, but I will name two local authorities. In one year alone, Cork County Council carried out no inspections whatsoever. Cork City Council, having found that inspections had taken place and that a property was not compliant, instigated no follow up inspections so we do not know what was actually done.

It appears that the local authorities that carry out inspections receive further money, while the local authorities that do not carry out inspections get no money; therefore, there is an in-built default in the regime. We in this committee need to talk to the Department along three different lines. First, we need to examine how the inspection regime is being carried out. I have questioned successive Ministers of State with responsibility for housing on this, and they have said that it is an issue for local authorities. It is not an issue for the local authorities. The Government and the Department should be hounding the local authorities to ensure inspections are being carried out.

The State is investing in 40% of the private residential market. We should have a policy where local authorities are collectively examining this issue. It is not good practice when it varies from one local authority to another. This committee needs to discuss a national rental deposit scheme. The Labour Party moved a Bill on this and the Minister of State accepted the concept during the debate on that miscellaneous housing Bill. It is something that we can achieve as part of the work programme for the committee.

Deputy Johnny Brady

I cannot understand how applicants who refuse local authority houses can still continue to receive rent supplement. I also know of situations where people gave up new local authority houses after six or eight months and went back on rent allowance. It has been much abused.

Ms Aideen Hayden

I shall begin and my colleague, Mr. Jordan, will also comment.

The first question was on tenants who trash property. The Residential Tenancies Act sets out the obligations of landlords and tenants. Threshold believes tenants should abide by the obligations set out for them under the Act, namely not to deteriorate the dwelling beyond normal wear and tear. The deposit is there to cover damage by a tenant. If a tenant damages a premises, the deposit is there to cover that damage. There may be damage that the deposit does not cover, and we do not deny these situations occur, in which case it is open to a landlord to take the case to the PRTB.

Mr. Bob Jordan

Earlier we discussed tenants disappearing at the end of a tenancy or after causing damage and the landlord has no way of getting them. Under the Residential Tenancies Act there is a requirement to get the tenant's PPSN, which means a landlord can bring a case to the PRTB and get a judgment that the tenant has caused thousands of euro worth of damage to their property. If that tenant appears again on the private rented sector, because that PPSN is there that judgment can be enforced against the tenant. Previously the tenant disappeared into the ether and landlords could not get them. Therefore, there is additional protection under the Residential Tenancies Act for such a situation.

Ms Aideen Hayden

It is important to note that it is the policy of the PRTB to pursue determinations against landlords and tenants through the District Courts when they fail to comply with determination orders. That means a tenant can be criminalised for failing to comply with a determination order and that will impact on that individual down the track. For example, he or she will never be able to access a mortgage because any search would show up such a criminal conviction. There are sanctions for people who do not comply with their obligations.

The second question was on whether the PRTB is an appropriate body to be part of a deposit protection scheme, the fact that it does not have an appropriate IT service and that one will not be in place until mid-2010. If the Minister were to decide, as part of the review of current legislation, that it would favour a deposit protection scheme, it would not be established until mid-2010. Given that the PRTB is responsible for registration, it is logical that when one lodges the registration details one would lodge the deposit at the same time. That would make sense. We are open to examining any other potential scheme that could be established. We are not prescriptive on whether it should be the PRTB that should do it, we just believe it should be done.

The third question was on the rental accommodation scheme, RAS. The scheme has been very slow to roll out and Ms Ann O'Donnell, who was with Limerick City Council, stated at a conference that Threshold organised that part of the reason was that when local authorities went to look at the properties being put forward for the scheme, in other words, properties rented to tenants who wanted to move into scheme, they found these properties were hopelessly below minimum standards.

Additional standards above the minimum standards were set for the RAS. Not only did the properties not meet these additional standards, they did not even meet minimum standards. Ms O'Donnell acknowledged that was a difficulty in rolling out the RAS. As time has passed, many local authorities have looked to the voluntary housing sector to provide properties into the RAS and the number of properties being rolled out has increased and local authorities are considering more options.

A question was asked about whether Threshold is more oriented towards tenants than landlords. Threshold is a housing organisation, not simply a private rented housing organisation. We believe in good quality, appropriate housing because a good-quality home is important for people seeking to fulfil their potential.

We were established in 1978 by Fr. Donal O'Mahony because he saw the conditions in which people in the private rented sector lived and he made it his mission to do something about it. It has taken many years to bring about reform in the private rented sector and only since the introduction of the Residential Tenancies Act 2004 has a tenant been entitled to anything other than 28 days' notice to quit. Before the introduction of the Residential Tenancies Act 2004 a tenant could be evicted without any reason. There was no entitlement to security of tenure, irrespective of how long a person had been in a property.

We may have been perceived as having a pro-tenant approach. Many of us know from our history books that in the 19th century our ancestors fought the land wars on the basis of the three Fs, which included security of tenure. We make no apologies for believing that security of tenure in the private rented sector is important. The private rented sector provides a home for those who use it and it cannot be treated casually.

Vice Chairman

I ask Ms Hayden to finish her presentation as we have to assess what action to take.

Ms Aideen Hayden

We should not forget some of these issues. There is greater wealth on one side of the equation than on the other because the person who lets a property is a property owner while the person renting it is a tenant who depends on a rented property for his or her home. I do not accept that we are pro-tenant but we are in favour of good-quality accommodation being made available to tenants. Last year we dealt with 700 landlords because we believe the private rented sector should function in the best way.

Letting agents present a major difficulty and we have made our case in that regard over many years. We have a particular issue with agents who will not disclose the names of landlords. This makes it very difficult for tenants to pursue cases against landlords. We believe that word has gone out on the grapevine that if letting agents do not disclose the names of landlords they cannot be pursued by tenants and we would like the Minister to address this issue at the earliest possible opportunity. Historically, there has been a lack of regulation of letting agents and Threshold has been very concerned about this over the years. The Residential Tenancies Act 2004 sets out the legal relationship between landlord and tenant. The landlord may be represented by a letting agent but the Act states the relationship is between landlord and tenant.

It is mainly tenants who suffer from the anti-social behaviour of other tenants. The Private Residential Tenancies Board produced a report for 2004-05 in which there were only 34 reported cases of anti-social behaviour, of which seven were found not to be anti-social behaviour. Some 17 cases related to noise and one of the difficulties with rented accommodation, particularly with older buildings, is poor quality construction. A number of instances of anti-social behaviour involved criminal activity and that is an issue for the Garda Síochána. We do not favour anti-social behaviour nor endorse it in any way. The victims of anti-social behaviour are, more often than not, other tenants or other people in the locality.

A member asked about the refusal of rent supplement. We compiled a report in conjunction with Comhairle and that is where I got the figure of 50% for those who did not accept rent supplement. Threshold carries out rent surveys on a monthly basis as part of the process whereby our access housing unit seeks property to rent for people leaving homelessness and we regularly find significant discrimination against rent supplement tenants. As Deputy Lynch said, advertisements on www.daft.ie and other property letting outlets show that a no rent supplement policy is common; this is so in around 50% of cases.

Vice Chairman

I thank Threshold for the presentation. I propose to members that we write to the Department regarding the questions raised here and then ask the Minister to comment. Is that agreed? Agreed.

I welcome the representatives of the Institute of Professional Auctioneers and Valuers, IPAV, and inform them that the format of the meeting will involve a brief presentation on their work, followed by a question and answer session. Before we begin, I draw attention to the fact that members of the committee have absolute privilege but this does not apply to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, by name or in such a way as to make him or her identifiable.

Mr. Fintan McNamara

I thank the committee members for the opportunity to address them this afternoon. My presentation is only four pages in length but I will try to shorten it even further because I know many of the facts and arguments were already presented to the committee today and three weeks ago.

The Institute of Professional Auctioneers and Valuers is a professional body that gives advice to around 10,000 landlords. Last year we set up a course to guide letting agents, both members and non-members of the IPAV, on the Residential Tenancies Act and other matters relating to lettings. This has proved very popular and we intend to run it again this autumn. We are doing good work in this regard. There are other advisory services in this business including www.Irishlandlord.com and the Irish Auctioneers and Valuers Institute. Less than 1% of landlords subscribe to the Irish Property Owners Association, a smaller body, but everyone must work together on this matter to ensure those providing accommodation to tenants are represented and consulted as widely as possible.

A number of members of the IPAV are also adjudicators and mediators for the Private Residential Tenancies Board. Approximately 108,000 landlords have signed up to the PRTB and this is a far greater level of compliance than under the 1996 registration system; in that case only 17,000 landlords registered units with local authorities. Approximately 220,000 tenancies are registered with the PRTB.

I participated in the deliberations of the rented housing commission, which framed the recommendations for the Residential Tenancies Act 2004. At the time it was estimated that approximately 10% of tenancies would present on an annual basis for dispute resolution. However, the reality is since the establishment of the Private Residential Tenancies Board, the total number of disputes lodged has been a little more than 5,500, a fraction of the anticipated figure.

Many people may not realise this but the private rental sector is a happier place than people think. Some 90% of tenancies are trouble free and the very fact that less than 1% present for dispute resolution on an annual basis is testament to this. If this were not the case we would see many more problems, but when problems arise they are fraught and very difficult, there is no question about this. When one meets a problem tenant, one meets a problem tenant but if it were not the case that a large number of tenancies were trouble free then there would be a good deal less investment in the business. The figures are in line with our European partners. Tenants and landlords do not differ throughout Europe and the problems are the same. I was on the board of the European property owners' body for seven years. I was assistant general secretary to the body and I experienced matters at first hand.

There has been talk of inspections. Local authority inspections are important and it is very important to have standards. However, there is a figure of which people are not aware. Since the introduction of standards in the mid 1990s, some 100,000 local authority inspections have taken place. We understand there are 200,000 rented units which means almost half of them have been inspected. I realise there are repeat inspections but quite a number have been inspected. A number of properties are new stock and the stock has doubled or perhaps trebled in the past ten years because of the influx of investment and foreign nationals coming here and residing in the rental sector. Such properties do not need to be inspected. The inspections should be well targeted.

I refer to another figure about local authorities. The reality is that 60% of rented accommodation is located in key urban areas. There are several local authorities operating in areas in which the number of rented units is quite small and they do not really need to inspect these. The entire registration fee which goes to the PRTB should resource the PRTB entirely and inspections should be funded differently.

Of the inspections which took place, some 20% of properties have been found to be sub-standard, but sub-standard does not mean the places are uninhabitable. Frequently it means a pane of glass is broken, a room needs to be painted, a vent is missing or something minor needs to be done. Usually the authorities write to the landlord and he complies and very few people actually reach the situation whereby there is legal action taken against them.

I refer to the current statistics on deposit retention. Reference was made in the last presentation to the deposit protection scheme. Officials from the PRTB have spoken at our letting courses and addressed our seminars. They have pointed out that of the disputes lodged to date 70% have been lodged by tenants and 52% of these relate to deposit retention. Adjudications and tribunals have broadly determined that in 25% of cases the tenant was entitled to a return of the entire deposit and in a further 24% of cases the landlord was justified in withholding the deposit, which in many instances did not cover his or her losses. In 51% of cases the deposit was apportioned between the disputing parties. These are important figures because in many cases where the landlord has given back the deposit the tenant may not have the resources to pay the deposit or he may have the resources to pay the deposit but a good deal more damage may have been done and the tenant has gone into the ether and cannot be tracked down.

I point out again that 1% of tenancies are brought annually to the PRTB for dispute resolution. In any given country deposit retention is par for the course and this goes with the territory. Landlords will see damage done and withhold deposits and sometimes they withhold too much. Tenants may cause damage and believe they are being penalised unduly or they may wish to move to other accommodation and take the deposit with them. Tenants may build up arrears of rent and use up the deposit and then seek a reference from the landlord when they wish to move on to further accommodation and some landlords return it simply to get rid of them. Anecdotal evidence suggests that many landlords are pleased to return the deposit to get rid of a tenant who is troublesome. I do not believe that introducing a further layer of bureaucracy in the form of a deposit protection board would cure the problem. It may even make it somewhat worse because in New Zealand where there is a deposit protection board there are between 20,000 and 30,000 applications for deposits every year. There would be a good deal more work involved and we should fine-tune the activities of the PRTB a good deal more before we go down that road. It would be to all intents and purposes using a sledgehammer to crack a nut.

We propose several recommendations. We note the PRTB is introducing a paper based adjudication process which will we hope expedite the dispute resolution process. The PRTB should be empowered — in given circumstances where the power would be used very rarely — to refer disputes relating to deposit retention up to a certain threshold to the Small Claims Court, where they were dealt with in the past. This approach may well be necessary if, in a continuing economic downturn, there is a significantly increased number of disputes lodged which would clog up an already overstretched dispute resolution process. Moreover, this facility, if applied pragmatically and judiciously, would free up the board to deal with serious fraud cases. This modus operandi would enable the board to give far greater protection to the rights of landlords and tenants. A facility would be in place, but it would not need to be used in all circumstances.

Equally problematic is the cumbersome, overly-bureaucratic registration system. I was on the ad hoc board of the rented housing commission, which drew up the report. I knew before the registration system was introduced that it would be a bureaucratic nightmare for landlords, and so it has proved to be, as 35% of the forms are still coming back incomplete. A significant number of PRTB staff are tied up with the process.

There is a movement towards an IT system and undoubtedly it would help to expedite things in the future and eradicate the problem of incomplete forms. However, the situation which pertains means that in one rented unit alone there can be three requirements to apply for registration in one 12-month period. Imagine if we had to send in deposits for the same apartment three times every year. There is a lot of transience in the rental sector. People like to move on to different pastures, especially in a downturn where rents are falling. They break their leases routinely and many landlords are left helpless.

Five years on from the introduction of the Residential Tenancies Act, one third of applications are returned incomplete. There are 11 or more mandatory boxes to be filled on the form and this bureaucratic nightmare must be dealt with. The rented housing commission proposed that rented units, rather than actual tenancies, be registered once every four years, but for a fee that would be adequate to resource the PRTB. This would get rid of the problem of incomplete registrations, would provide for far greater compliance from landlords and would free up PRTB staff.

Section 86 of the Residential Tenancies Act needs to be amended. Currently, tenants can stay in accommodation for extended periods of up to two years, can clock up €12,000, €15,000 or €20,000 in rent and people just have to wait. It is happening fairly widely. This situation needs to be addressed and because of it there is a very bad perception of the PRTB in the property industry. PRTB staff are doing their very best to cope with the situation and the legislation, and are very much confined by it.

The notice of termination needs to be simplified. It is littered with references throughout the Act and even experienced legal practitioners write out invalid notices of termination. It extends the problem when one has to get rid of a tenant. Adjudicators and tribunals should, in certain circumstances where it is warranted, have the power to terminate a tenancy even where a notice is invalidly served. That would help the situation.

I could say much more about this Act, but I have deliberately confined my comments. We are making this presentation in the context of the review of the Residential Tenancies Act. I have consulted widely with our members and landlords and the view is that if what we have proposed here today was looked at and taken seriously it would greatly transform things.

The recent €200 levy on rental units, while clearly unwelcome for investors and landlords, is accepted as a necessary evil in the current fiscal climate. However, the IPAV hopes local authorities will be sympathetic and be empowered to waive liability for the levy on property owners who now own units that cannot be let and are, in some extreme cases, facing grave hardship having lost their jobs. Economists believe that thousands of section-driven investment properties purchased in the boom will never be saleable again, even when normal activity returns to the property market.

It is also disappointing that the Minister did not accept an amendment to cap the levy so that it would amount to no more than €600 in older converted pre-1963 style houses that provide comfortable accommodation for HSE-assisted tenants, some with disabilities. I would have liked to have seen €200 levy capped at €600, but it was not done. It is estimated that some 30,000 people are in rented accommodation. Some of them are challenged, do not like to house share and want to have their own self-contained unit. These units may not be available in the future because of the expense of providing them and the heavy charges.

I agree with previous speakers who indicated that the rent supplement is not sufficient to help single people reside in these units or to pay their rent. The Government should reconsider the €200 levy. To someone who owns an apartment in Monkstown that is earning an annual rent of €25,000 or €30,000 a year, €200 is only a detail. However, if one owns a house in Limerick divided into seven units, housing seven tenants receiving assistance, some with disabilities, earning an annual income of €20,000 or less due to vacancies or people being unable to pay rent, and one is paying PRTB registration charges and the €200, one might pay a total of €3,000 or €4,000 a year. These houses will disappear and there is a need for housing to take up the slack.

The IPAV is also concerned that the proposed introduction of a residential property tax will delay a recovery in the housing market. The property tax introduced in 1983 was inherently unfair and penalised urban dwellers, especially in Dublin. The IPAV recommends that at the very minimum such a tax be postponed and if introduced that it be accompanied by a significant reduction in, or abolition of, transaction taxes. Stamp duty rates in the past ten years have been penal. People were able to bear them in the property boom when there was high employment and property prices were going up. Some of the people concerned have lost their jobs and are in straitened circumstances so asking them to pay a property tax when they have already effectively paid one up-front is unfair. The property tax should be carefully reviewed before its introduction.

Agents have been made responsible for the production of energy rating certificates on properties they are selling or letting but do not own. A recent survey of estate agents working in 14 European countries revealed that not only was this obligation not imposed on agents but that in no less than 10% of sales or lettings was there a reference to building energy rating, BER, certificates. They are not taking it very seriously in Europe.

The obligation on agents should extend to no more than informing and reminding property owners of their obligations in respect of the BER. To demand more is to cast the agents in an invidious and unfair position. That is important. If one does not own a property one cannot order the owner to get a BER certificate for his property. If one refuses to sell the place for him he will move to another agent and one loses business. People will take on that business, especially those who are not affiliated to professional bodies and operate in a different environment.

We have been told that there are 91,000 tenants on rent supplement in the residential rented sector out of a total of between 450,000 and 500,000 tenants. In the past ten years that would have represented approximately 20% of the residential rented sector. I do not accept the view that the rent supplement underpinned market rents. There was an influx of approximately 400,000 foreign nationals in the past decade who were used to a rental culture, who filled the sector and were employed in lucrative construction jobs so were able to pay higher rents. I agree, however, that in some parts of the market, particularly for single people, the rent supplement is not sufficient to match the market, even where rents are falling because that type of accommodation is in high demand. That should be examined.

I thank the committee for its attention. My presentation was short but I will be delighted to take questions.

Vice Chairman

I thank Mr. McNamara for his presentation.

Senator Paudie Coffey

I welcome the delegation to the committee. The committee is obliged to hear views from all sides and all stakeholders in the rental sector. I acknowledge the role of those who have provided private rental accommodation over many years where the Government failed to provide accommodation for many on housing lists. The private rental sector stepped in to provide people with quality homes in most instances.

What is the IPAV's view on the regulation of letting agents? Would it welcome this? Would it make its job easier to keep its members in check to have everyone operating to a regulation that they all understand, are aware of and with which they are statutorily obliged to comply? I would like to hear the delegation's view.

Mr. McNamara mentioned the number of local authority inspections as being over 100,000. That might be the case but many of those would be repeat inspections. Our understanding is that there is over €10 million of funds in the Private Residential Tenancies Board that has not been taken up by local authorities for inspections. That indicates to me that local authorities are not carrying out the necessary number of inspections to ensure standards are upheld. I include the local authorities' own houses in that, many of which need to be inspected as well, but a conflict of interest arises in that local authorities are responsible for inspecting the private rented sector yet there is nobody independent of them to inspect their own housing stock, which is substantial.

I note a certain reluctance on the part of Mr. McNamara regarding the deposit protection scheme. Will he further elaborate on this? One of the institute's recommendations is that disputes over a certain threshold should be referred to the Small Claims Court. The Private Residential Tenancies Board's dispute system was set up was to remove that function from the Small Claims Court to prevent the clogging up of that system. Could Mr. McNamara be more clear about the threshold in terms of referral to the Small Claims Court?

With regard to the €200 levy, I understand the concern in terms of private houses that are not let but an anomaly arises, and it was highlighted both in the Seanad and the Dáil recently when the Bill was before the Houses, in that the rental accommodation scheme houses, many of which Mr. McNamara's institute would be responsible for in the private sector and in respect of which there are secure contracts with local authorities and tenants over many years, are exempt from the €200 levy yet vacant houses owned by landlords which may be beside those rental accommodation scheme houses are liable for the €200 levy. There is an anomaly in that respect.

The rental accommodation scheme houses should be included in the €200 levy and that it should be reversed. If a house is vacant for a period of, say, six months or a year, that should be exempted. That is something the Minister, and this committee, should recommend to the Department because an anomaly arises in that private houses that might have a five year or ten year secure contract are exempt from the €200 levy yet some vacant private houses are liable for it. I agree with Mr. McNamara's point.

There are thousands of vacant unsold private houses throughout the country. Mr. McNamara did not mention those in any great detail and I would like to hear his view on that issue. Would he welcome some type of scheme in conjunction with the Department and local authorities to let those houses to persons on housing lists or is he happy to leave it to the private market? Would his organisation welcome some type of scheme to let those houses to people on housing lists or would it rather leave it to the private market?

Senator Camillus Glynn

I welcome the members of the delegation. Mr. McNamara said the institute is a self-regulating body and that all members must operate to a prescribed code of conduct. What action does his organisation take against any member found to default relevant to the standard set by the IPAV? How many members are on his committee?

I am not terribly disposed to bodies which are self-regulating. Some time ago I incurred the wrath of another organisation which for a long time was self-regulating but that is no longer the case.

In regard to standards, Mr. McNamara would have heard the question I asked of Threshold. How would Mr. McNamara's organisation see the new deposit protection scheme operating? I have some concerns about it because I want to ensure fair play. I have considerable experience in the area of housing including social and affordable and housing co-operatives. I organised one many years ago as a member of a local authority. What additional role do the representatives consider local authorities could play? I believe they could play a significant role because, to a large extent, the current system does not work well. I could continue at length outlining the reasons for this.

In terms of the upholding of standards on which the institute insists, the fact that it has a disciplinary committee infers that it is serious about addressing this issue. What actions does it take against members whose accommodation is less than the acceptable standard? Does it wait for some other agency to take appropriate action to address that, or does it take action and, if so, what action has it taken in this regard to date? Can the representatives give us some examples of the action the institute has taken in that respect?

Deputy Ciarán Lynch

I thank the members of the Institute of Professional Auctioneers and Valuers for attending. There was a context in which this meeting with the representatives of the institute was sought, but the representatives have not referred to that context which relates to comments made by the IPOA. In the institute's correspondence with this committee, its request to meet the committee was on foot of an earlier meeting. The representatives can deal with that matter shortly. They did not raise it in their presentation, but if they wish to deal with it later, they are more than welcome to do so.

My questions are in a different context. How many members has the IPAV? Whom exactly does it represent? Does its remit extend beyond what we would understand as the landlord tenant arrangement under the Residential Tenancies Act? I understand the institute has a position on downward rent reviews in the commercial rental sector. It has made considerable commentary on that recently and I will conclude my comments by referring to that area.

Senator Glynn made an interesting comment on the issue of self-regulation and measures and actions arising from it. It is a known fact that top-up payments are being made to landlords by people in receipt of social welfare benefits. Having encountered such behaviour among its members, what action has the institute taken or does it have a policy position on such behaviour? Is a member found engaging in such behaviour debarred from the institute, or does it impose a penalty on such a member? What are the qualifications criteria for being a member of the IPAV?

Members of the committee need to be mindful that their job is not to jump into a binary opposition position. We need to appreciate that the different groups that come before the committee promote the interests of their members. When it comes to the deposit retention issue and other issues, one could slip into the type of thinking, as expressed by Mandy Rice-Davies -"well, they would say that, wouldn't they?". Deputy Coffey made an interesting point in this context. I would have concerns about dealing with tenancy issues in the courts. The PRTB has a quasi-judicial function. If a tenant wrecks a property or acts in a criminal way, the landlord has the option to bring a case against the tenant to the District or Circuit Court and report to the Garda that a tenant has damaged his or her property. Dealing with such issues does not come within the remit of the PRTB, its role is to deal with tenant disputes.

I am not convinced by the representatives' argument concerning a deposit retention scheme. Such deposits are ultimately the tenants' money. It is not the money of the institute's members, the money of the IPOA's members or the PRTB's money. The money belongs to the tenants.

The issue is not whether the landlords or the tenants are acting inappropriately with regard to deposit retention, it is that the system is being clogged up with deposit retention issues. Dealing these issues should be removed from remit of the PRTB, to use the logic of the argument made about bringing such issues to the courts. An argument could be made for deposit retention issues to be removed from the remit of the PRTB to be dealt with separately and more speedily. I note the delay in dealing with such issues. It is incredible and that adjudicators who earn more than €600 a day and who are members of the institute dealt with only one case a day up to recently and now they have been asked to deal with three cases a day. Anybody who has worked in the area of conflict resolution knows there is a formula to deal with conflicts, although it might not be like "Judge Judy". One conflict per day was being dealt with and people were being paid more than €600 per day which was very easy money. I am glad the PRTB is now looking for three adjudications per day. I would like to hear the IPAV's views on that matter and how its members, who comprise many of these adjudicators, are finding that adjustment.

I refer to downward rent reviews. I note the IPAV has taken quite a strong position on this matter. A major concern I have is the absence of any downward rent review provision, although the Minister recently grafted something on to the end of the Land and Conveyancing Law Reform Bill but we do not know if it will ever be enacted.

People who have leases on commercial properties cannot legally get a downward review of their rent. The only reviews are upward. When the Minister's Bill is enacted, the provision will apply only to new leases or leases that come up for renewal which could be in 20 years' time because leases tend to run for such periods of time.

I looked at Retail Ireland's excellent figures from yesterday and the largest contributing factor to costs in the retail sector is the cost meeting rents, some of which were set two or three years ago at the height of a property pyramid, property bubble or whatever one wants to call it.

What is most concerning is that we are moving towards negotiations in regard to the National Asset Management Agency and the value of many of the properties involved will be determined on their rental lease value. Rents go up and down in the private residential property market. The IPAV accepts that but seems to have a difficulty accepting it in the commercial sector. Given the absence of such a provision currently, we, as taxpayers, will overvalue these properties because there is an in-built clause that one cannot lower rent. If there was a provision providing that rents could be lowered, the State would get a better bang for its buck and the taxpayer would pay less for the underwriting or valuing of these properties.

Deputy Michael Fitzpatrick

I would like to hear from Mr. John Shaw and Mr. Thomas Woodbyrne because they are professionals in the field. I would like to hear about the situation on the ground.

I refer to deposits, letting agreements and so on. In the past, deposits were a rarity and one was lucky to get a month's rent in advance. If one looked for a deposit and a month's rent in advance, one would not get it. Very often auctioneers wanted to get the business done and letting agreements were signed.

How many tenants deal directly with landlords rather than an agent? The IPAV is a professional body which deals with these issues in a professional way, which is right and proper. Prior to 1971, in many cases, auctioneers operated independently and that was not very satisfactory. Auctioneers now have a professional body looking after their professional interests.

I refer to the number of vacant houses and local authorities. We talk much about private rented accommodation. Local authorities, which have been in the field for many years, would not have been the best landlords either. In my work, I receive more complaints from local authority tenants than from those in private rented accommodation. When I approach a landlord regarding a tenant, I always get a very favourable response from him or her. I find landlords very receptive to public representatives speaking to them on behalf of a tenant. I cannot cite a case in which the landlord did not come up trumps and provide whatever was necessary to satisfy the tenant.

I refer to rented accommodation. How is the deposit handled by the agent? Is it held in a separate account on behalf of the tenant? If an inspector walked in to check the IPAV's accounts tomorrow, would he or she be able to identify the number of lettings, the number of deposits, where and how they were held?

Mr. John Shaw

On the question of deposits, probably 60% to 70% are paid to landlords in the Limerick area, the area I represent. Private letting agencies also handle deposits, some of which are registered and some are not. They take about 20% to 25% of deposits, while auctioneers and estate agents handle the rest. If we are managing a property, we hold the deposit in the client's account and it is usually between €600 and €800. If we let a property for a landlord but he or she manages it, we pass on control of the property to him or her at that stage. The tenant will be informed that it is being passed on to the landlord and that he or she will have to deal with him or her.

Mr. Thomas Woodbyrne

I also speak as an adjudicator and mediator on the PRTB panel. I would be against the proposal that rent deposits be forwarded to the PRTB for the following reasons. The PRTB has been the subject of criticism in the media by landlords, aired in particular on "Liveline". Should the recommendation that deposits be forwarded to the PRTB be implemented, it would fuel suspicion and expose the board to further allegations of less than equal treatment. However, if the proposal is to be considered, I suggest an alternative. Given that most residential lettings on the east coast are conducted through an agent and that the soon to be enacted Property Services (Regulation) Bill 2009 will provide for a compensation fund that will cover all relevant activity under section 75 — security deposits may be held in trust under the provisions and in accordance with the obligations of a stakeholder by a licensee — this alternative will not only efficiently achieve the intended objective, it will also provide an incentive to engage in mediation as opposed to litigation.

Payment to adjudicators may happen. It is due to adjournments and so on that an adjudicator will only carry out one such adjudication on the day. In the service of conflict resolution there will be a percentage of errors, mainly due to undisclosed information, that will justify an aggrieved party in making an application to the tribunal. However, appeals are minimised by a strong reference to the relevant sections of the legislation and the strength of evidence clearly outlined in the adjudicator's report. Adjudicators who provide for this attention to detail bring value for money to the current level of payment, as in similar disputes within the commercial sector one is charged — prior to the issue of findings — in excess of €2,000 per case. In that instance the adjudicator's report is not required to provide a reason for his or her determination.

On the question of agents holding deposits, it is important to note that all members of our institution are bonded. I speak for my own office in saying we prefer to hold deposits. It is outlined in the terms of our service arrangements that should a landlord request the deposit, as he or she is legally entitled to do, we will disengage our service from him or her if we perceive there is a breach of the 2004 Act. This works very well; one simply has to be strong about it.

Mr. Fintan McNamara

I will deal with some of the other points raised by members. Mr. Shaw addressed some of the issues relating to landlords who look after properties themselves. I estimate that at least 70% of landlords — as many as 80% in some areas — look after their own properties, including letting, with the remainder handing over their properties to agents. Deputy Ciarán Lynch asked what we did about professionals who misbehaved. We are not a landlords' body as such. Rather, we are a body of estate agents, some of whom are involved in lettings and many of whom are investors themselves. Our members provide advice for some 10,000 buy-to-let investors and landlords on an annual basis. There is no professional body representing landlords. There is a private company which offers services to landlords, some of which are very useful, but it is not a professional body and less than 1% of landlords subscribe to it. No annual general meetings take place and the standards relevant to other professional bodies are not applicable.

Landlords are regulated by the State in the form of the Private Residential Tenancies Board. Estate agents and letting agents who are members of our professional body are subject to our code of practice. Procedures are in place which allow for them to be disciplined, including the imposition of fines and expulsion from the association. Fortunately, in the last 25 years, we have had to pay out only some €50,000 in compensation to clients for misappropriation of funds. The new National Property Services Regulatory Authority which is being established on a statutory basis will take over that disciplinary role in the future. It will be interesting to see how it works. Since the relevant legislation was introduced, an bord snip nua has proposed the amalgamation of the PRTB and the authority. We have not yet formalised a view on whether this would be a worthwhile approach. There are certain areas of common ground for both bodies. The regulatory authority will deal with letting agents, managing agents, property professionals and estate agents. Those who misbehave, whether in respect of residential or commercial rentals, will be subject to the code of practice of the regulatory body.

In regard to inspections and deposit retention, I am of the view that up to a certain threshold, probably somewhere between €500 and €1,000, disputes about deposits should be referred back to the Small Claims Court. Such cases used to take approximately three months to be adjudicated upon and judges were generally more than favourable to tenants. If a landlord was not properly organised in court, tenants tended to get back their entire deposit. My view is that a return to that arrangement would free up the PRTB to deal with more complex cases. I am certainly convinced that the introduction of a deposit retention scheme would only result in more bureaucracy and red tape and greater demands on monetary and staff resources. It would place a significant burden on an already overstretched system.

I am pleased to hear there is a degree of support for our position in regard to the €200 levy on second homes. We did not lobby for properties let under the rental accommodation scheme to be exempt; that was the Minister's decision. What we asked was that older converted stock, comprising five or six apartments in a single property, in which Health Service Executive-assisted tenants are housed, should be exempt. These are not good quality locations and the properties in question will continue to be subject to standards, inspections and upgrading. The €200 exemption would be more relevant in this regard than in the RAS. As has been stated, single people with disabilities find normal house sharing with three or four other people difficult. Many like their own space.

It is fair to suggest houses that have been empty for extended periods should be exempted from the €200 levy and that the Minister should reconsider capping old houses. There seems to be a problem with the legislation, in that the Minister cannot distinguish between modern built apartments. For example, it is ridiculous that 100 apartments together in one block would only pay €600. I am referring to exempting older stock, which provides accommodation for the HSE.

I am in favour of the regulation of letting agents. The IPAV has done its best to provide courses, education and training for those exclusively involved in letting. We did so last year and will do so again. The expectation is that they will need to get a licence to operate. If they let, they will need to pay into a compensation fund and be subjected by the National Property Services Regulatory Authority, NPSRA, to the same practices as estate agents.

I do not intend to delve into the proposal on commercial lettings.

Deputy Ciarán Lynch

There has been much commentary in the media.

Mr. Fintan McNamara

No. Our sister organisation has taken a larger role and has more of an impact in this regard. I subscribe to much of what it is stating, in that commercial lettings can be as difficult for tenants as they can be for landlords. In practice, people are taking a pragmatic view and reducing rents where the situations warrant it. We dealt with this matter in our commercial lettings course last year. Our legal advisers gave people good pointers on how to get around the problem. However, a change in the legislation could generate unanticipated problems.

Senator Camillus Glynn

I asked a couple of questions on the disciplinary committee that have not been answered. What action does it take against defaulting members and how many people sit on it? The presentation refers to two independent external members. I prefaced my remarks by saying that I am not in favour of self-regulation.

Mr. Fintan McNamara

I answered the question, but I will recap. The disciplinary committee has approximately nine members, including two external members. We have paid a small amount of €50,000 in compensation to clients who have been subjected to dishonesty by our members in the past 25 years. Where a client feels aggrieved, the procedure allows him or her to complain to the institute and the agent must explain the situation. In 90% of cases, we find that claims have been largely unfounded or were resolvable through mediation or so on. While some agents misbehave, many agents are not members of the professional bodies. Rather, they operate in a separate and unregulated market. Many of the problems occur in this area, not with members.

I regret that the Senator does not believe that professional bodies are useful, as I am in favour of self-regulation.

Senator Camillus Glynn

I am not casting aspersions on the IPAV, but I do not agree with self-regulation full stop. I will not go into the examples, but they support my comments.

Of the nine members, are two independent while the other seven are part of the system? Mr. McNamara will agree that it is not a good balance. What action does the IPAV take against defaulting members or those who have been found to have acted incorrectly?

Mr. Fintan McNamara

He or she can be called in, fined and expelled from the professional body.

Senator Camillus Glynn

Is the IPAV legally in a position to fine the person?

Mr. Fintan McNamara

As far as I am aware, yes. We can make the agent responsible. If he or she has done something wrong to a client, such as running away with a deposit, we can compensate the client from our compensation fund. The agent will be expelled from our body. Perhaps Mr. Shaw will help me regarding the fines. I must double check my facts, but I believe that we can enforce fines. Our sister organisation has fined people for not complying with continuous professional development.

Vice Chairman

Mr. McNamara might communicate with the Senator.

Mr. Fintan McNamara

Yes.

Deputy Ciarán Lynch

With regard to top-up payments, which we discussed earlier with Threshold and which we mentioned in this discussion, does the IPAV have a policy or position on this? Does it apply a code of practice whereby if a member of the IPAV is found to be engaged in top-up payments to rent allowance payments it means expulsion from the organisation?

Mr. Fintan McNamara

In the case that it was brought to our attention. If a member of the IPAV was working for a landlord and he or she facilitated the landlord by getting top-up payments he or she would be acting illegally and our advice would be not to engage in it. By doing this people would be leaving themselves wide open; if there is a dispute with a tenant and he or she subsequently goes to the PRTB anybody receiving illicit payments is wide open to severe fines. We do not have a direct role because the landlord is the agent's client and he or she would have to complain to us that the agent was taking top-up payments. However, if an agent was taking top-up payments for a landlord it is unlikely that the landlord would complain to us, if members know what I mean.

Deputy Ciarán Lynch

If by a roll of the dice a member of the IPAV is found to be engaged in that practice — it does not matter how it is instigated and a tenant might instigate it because he or she would want to stay and would offer €15 to do so and the landlord might cut a deal — or if an IPAV member is a conduit for that type of behaviour does the organisation have a position on it?

Mr. Fintan McNamara

If our members were acting illegally of course we would call them in and they would have to explain themselves and we would have to investigate it.

Deputy Ciarán Lynch

What would be the outcome of that process?

Mr. Fintan McNamara

Our opinion is that a member of our professional body cannot in any way act illegally.

Deputy Ciarán Lynch

Would he or she cease to be a member of the organisation?

Mr. Fintan McNamara

Deputy Lynch is asking a hypothetical question.

Deputy Ciarán Lynch

Is Mr. McNamara questioning my stating that the practice is happening?

Mr. Fintan McNamara

Deputy Lynch is asking a hypothetical question——

Deputy Ciarán Lynch

I am not asking a hypothetical question. If that is case Mr. McNamara is stating what I am stating is false. Is Mr. McNamara questioning the assumption I am making that top-up payments are being made or does he accept this?

Mr. Fintan McNamara

I accept it.

Deputy Ciarán Lynch

As top-up payments are being made, does Mr. McNamara's organisation have a clear position and policy on this? If a member is caught engaging in or facilitating the practice of top-up payments — I do not care who instigates it and whether it is a landlord or a tenant — does it mean expulsion from the organisation?

Mr. Fintan McNamara

To date we have not had a complaint from anybody.

Deputy Ciarán Lynch

Does the organisation have a position on it?

Mr. Fintan McNamara

Our position would be decided by our national council but I would be very surprised——

Deputy Ciarán Lynch

Does the organisation have a position on it?

Mr. Fintan McNamara

I could state it would say that somebody behaving illegally should not be doing so and could not continue to be a member.

Deputy Ciarán Lynch

I am not saying members of the organisation are engaged in the practice. What I want to know is whether the organisation has a position on it. In the event of a member being found to be engaged in it what would be the outcome?

Mr. Fintan McNamara

We would have to go through our normal disciplinary process and find out exactly what happened in the situation. If clear illegality was involved there would be serious consequences.

Deputy Ciarán Lynch

I will give Mr. McNamara some slack on this because it is clear his organisation does not have a position on it. Will Mr. McNamara give a commitment to go back to his organisation and having discussed it write to the committee outlining what the position would be?

Mr. Fintan McNamara

I have no problem with that.

Vice Chairman

Are there any further questions?

Mr. Thomas Woodbyrne

What is the Deputy's definition of a top-up payment?

Deputy Ciarán Lynch

A top-up payment is where an agreement on payment has been made under the rental allowance scheme by a community welfare officer and the tenant is paying a percentage on top of that disclosed payment. Perhaps it is a payment of €10 or €15; Mr. Woodbyrne knows what I am talking about as this practice is happening on a wide scale. If I need to explain it I will take as much time as he wants but he knows what I am talking about.

Mr. Thomas Woodbyrne

I am not aware of that practice in any shape or form and I would imagine——

Deputy Ciarán Lynch

Is Mr. Woodbyrne denying that top-up payments are taking place because——

Mr. Thomas Woodbyrne

I am not aware of that practice.

Deputy Ciarán Lynch

I have privilege here, which I will not use this evening, but I could name many addresses where top-up payments are taking place. I will not do so but I do have that privilege.

Vice Chairman

I ask Mr. McNamara to respond to the question asked by Deputy Ciarán Lynch.

Mr. Fintan McNamara

I wish to make one further comment. The point made by Threshold earlier that payments of the entire rent should be made directly to landlords is the solution to the problem. I will send the committee our policy on top-up payments and Deputy Ciarán Lynch will find that people who are not members of our professional body may operate it. It is more of a problem among landlords who operate among themselves.

Deputy Ciarán Lynch

Mr. Woodbyrne has made a statement here that he is unaware or does not believe top-up payments are happening. Is that correct?

Mr. Thomas Woodbyrne

May I finish the statement? I am not aware. Through letting agents or affiliated offices there is a lease agreement in place that identifies the monthly event.

Vice Chairman

Mr. Woodbyrne and Mr. McNamara have agreed to correspond.

Deputy Ciarán Lynch

For the record, does the IPAV deny top-up payments are taking place?

Mr. Fintan McNamara

Threshold says they are taking place so we take its word for it. I do not say any of our agents are involved in it and we have not had a complaint to date.

Deputy Ciarán Lynch

Will Mr. McNamara correspond with this committee on the position regarding that matter?

Mr. Fintan McNamara

I will. I did not clarify earlier that the reason we suggested this meeting was that it was very important that the widest interest in the property business be consulted. One of the reasons I was concerned about the IPOA presentations was that it did not make recommendations on what changes might be needed. It was a litany of complaints. I hope the presentation I have made here today is broadly representative.

Deputy Ciarán Lynch

I accept that.

Deputy Michael Fitzpatrick

Is the IPAV the largest body representing professional auctioneers?

Mr. Fintan McNamara

We have approximately 500 members, as has our sister organisation. I could not say which is larger or smaller.

Deputy Michael Fitzpatrick

Can Mr. McNamara put on the record the name of the other organisation?

Mr. Fintan McNamara

The Irish Auctioneers and Valuers Institute. I understand it is to appear before the committee next week.

Deputy Michael Fitzpatrick

There are two bodies.

Mr. Fintan McNamara

There are three professional bodies. There is also the Society of Chartered Surveyors; therefore, we are well represented.

Vice Chairman

I thank both delegations, Threshold and the IPAV, for attending today's meeting, which has been very interesting and informative.

The joint committee adjourned at 1.30 p.m. until 2 p.m. on Tuesday, 1 September 2009.