Dáil Éireann Debate, Thursday - 26 March 2015
242. Deputy Barry Cowen asked the Minister for the Environment, Community and Local Government if he will provide details on the operation and financing of the proposed deposit retention scheme that is to be provided for in the Residential Tenancies (Amendment) Bill 2012; his plans that the custodial model proposed will be self-financing; and the factors that would mitigate against the scheme being self-financing. [12451/15]
View answerDeposit retention and rent arrears are the main categories of dispute from applicant parties for dispute resolution according to the annual report of the Private Residential Tenancies Board (PRTB) for 2013. The Programme for Government includes a commitment to establish a tenancy deposit protection scheme.
On foot of this commitment the PRTB commissioned research on such a scheme and reported back to my Department with recommendations in that regard. The subsequent report, prepared by Indecon International Economic Consultants, assessed a number of different options for delivery of a scheme ranging from one where all elements are delivered by the PRTB to one where all elements are outsourced to a private operator. The report examined each option in terms of both insurance and custodial type schemes.
All of the options presented in the report were considered and Government approval was ultimately secured for the establishment of a tenancy deposit scheme based on a custodial model to be operated by the PRTB. In a custodial scheme, tenancy deposits are transferred to the scheme for the duration of the tenancy. They are then repaid by the scheme operator following agreement between the landlord and tenant or following the outcome of a dispute resolution process in cases where there is no agreement. It is my intention to introduce the legislative amendments in relation to the scheme at Committee Stage of the Residential Tenancies (Amendment) (No. 2) Bill 2012 in the Seanad.
The model proposed will generate an income stream from the deposit fund, which will be used to finance the scheme. The scheme will also have cost implications for the PRTB, especially in the initial establishment phase. There have been many changes since Indecon conducted the cost-benefit analysis in 2012 including in relation to interest rates and average rents. The true costs associated with the scheme will only become clear through the procurement process. The management of costs will be crucial to the financial viability of the scheme and my Department is working closely with the PRTB in this regard.
