I thank the committee for the invitation to address it. Although some of the points have been made already, I will try to reinforce some of the arguments made from the point of view of the IPAV.
IPAV is the representative body for auctioneers and estate agents nationwide and now exclusively represents estate agents and letting agents. We were formed in 1971 and cover 500 member firms that in a normal market would employ approximately 3,000 people in property-related activities, including valuation, sales, lettings and property management. The institute is a self-regulating body and members must operate to a prescribed code of conduct. IPAV's disciplinary committee also has two independent, external members. The provision of high quality education courses, including continuous professional development for existing members, is a central part of IPAV's work and we regularly introduce courses for letting agencies on the Residential Tenancies Act and renting matters.
I passed out a script but I do not propose to read it because the committee already has many of the figures. I was part of the rented housing commission when it was set up. When it recommended the establishment of the PRTB, it was estimated that up to 10% of tenancies would present on an annual basis. Eight years later, less than 1% of tenancies have presented for dispute resolution. That was not anticipated.
In the rental market, deposit retention goes with the territory. Tenants do damage and landlords sometimes in the belief they have been wronged withhold deposits wrongfully. The difficulty is education. There must be greater awareness among landlords that the deposit can only be retained in the instance of serious damage being done, that ordinary wear and tear does not justify withholding the deposit.
In the majority of cases, adjudicators in tribunals have found the landlord was justified in withholding part of or the entire deposit. That is what the PRTB was set up for, to resolve these matters. We are now considering an extra layer of bureaucracy and in our opinion that is going down the wrong road. The private rented sector in Ireland is the most regulated in Europe. Since the 1990s there has been a raft of regulations, including standards regulation, and more than 100,000 inspections of private rented accommodation have taken place. Successive surveys attest to the fact that 90% of tenancies are trouble-free. There is a good relationship between landlords and tenants, including a survey recently carried out by the PRTB.
The suggestion that rental deposits should forwarded to the PRTB is disproportionate, as Threshold has already stated, and it will give rise to expensive, unnecessary bureaucracy. Essentially it is using a sledgehammer to crack a nut. It has been noted that the British scheme operates free of charge for landlords or tenants and there is no expensive compulsory registration of landlords and tenancies. We have 171,000 registered landlords, although the figure has shot up in the last year. In Britain, only 250,000 landlords have signed up to the custodial deposit scheme, which has been in operation for four years from a possible 2 million landlords. The custodial deposit scheme, which was supposed to be self-financing, has cost the English taxpayer £12 million to date. Substantial numbers of landlords are not complying. Some use insurance-based schemes that cost them money but we have regular contact with the Association of Residential Letting Agents in Britain and the fact is that compliance has not been widespread.
We have had massive compliance with registration in Ireland and it has been a success from the point of view of the Government and the PRTB. Under the last registration system, only 17,000 landlords registered 29,000 units. There are still problems and there are landlords who are capricious and who withhold deposits wrongfully. Something has to be done about them. This is going too far. There will be an extra burden on the rented sector which will disincentivise investment and the results will not be justified.
Despite the existence of a custodial deposit scheme in the UK there is no indication that the level of disputes arising from deposit retention is any less frequent than Ireland. It goes with the territory. Deposit retention schemes only exist in a very small number of jurisdictions, mainly Anglophile countries. Improvements need to be made. Substantial fines should be imposed on landlords who retain deposits. The word would get around very quickly. There has been a huge increase in the number of applications in regard to rent arrears. It is very difficult to enforce termination orders on tenants who have left or gone into the ether. Landlords are different. They have the property. They are sitting ducks and can eventually be brought to book. There needs to be greater educational awareness and higher fines.
