Joe Costello (Dublin Central, Labour)
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This issue has been a running sore for a long time, namely, the withholding of the deposits of tenants in private rented accommodation. While this problem has been around for many decades nothing has been done to address it. The problem arises because very often landlords retain tenants' deposits or part thereof, often on spurious grounds such as damage to property, unpaid utility bills or a failure of the tenant to pay all rental income on time and so on. This is the largest issue of complaint by tenants to Threshold, which published its annual report last week, and the Private Rented Tenancies Board, PRTB. Threshold and the PRTB say they have a 75% success rate when they take up this issue with landlords. In other words, when representation is made and pressure is applied to the landlords, they acknowledge that perhaps they should not have retained the full deposit or part thereof.

This is a running sore and it is also a serious matter for people in the Dublin area where rents have not decreased even though house prices have decreased significantly, by 50%. Nearly all rental accommodation suitable for a couple or a family with a child or two, costs in the region of €800 to €1,200 a month. A person on rent supplement allowance will not receive this amount from the community welfare officer. A student, for example, who does not get back the deposit is unable to meet the cost of a fresh deposit.

An independent structure is required and this has been a recommendation for some time. An independent body could be the PRTB or a local authority or another third party. This body could hold the deposits paid rather than the landlords holding them. A deposit does not belong to the landlord but rather it belongs to the tenant. There should be an independent body in place to receive the deposit so that when the tenant moves on, it would adjudicate on whether some part of the deposit should be retained by the tenant or given to the landlord.

I ask the Minister to recognise the serious grievance of so many people. Hundreds of thousands of people live in rented accommodation. I ask that the necessary legislation be introduced to set up such an independent, third party body to retain deposits.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Before I reply to Deputy Costello on the housing matter, I wish to take the opportunity to acknowledge the work of Deputy Willie Penrose as Minister of State with responsibility for housing and planning at the Department of the Environment, Community and Local Government since 9 March 2011. I thank him for his outstanding work and the interest and knowledge he had of housing matters in particular and the principled position he took on a particular issue. I had an excellent working relationship with him which I deeply appreciate and I wish him well.

The Residential Tenancies Act 2004 regulates the tenant-landlord relationship in the private rented residential sector. My Department conducted a review of the Act in 2009 and the incorrect retention of deposits by landlords was identified in the review process as one of a range of issues that merited specific attention. In July 2011, the Government approved the drafting of the Residential Tenancies (Amendment) Bill 2011. The general scheme of the Bill proposes the introduction of fines where a landlord is found to have incorrectly retained a tenant's deposit, as a first step to eliminating the problem of deposit retention. My Department is currently liaising with the Office of the Parliamentary Counsel regarding the drafting of the Bill.

The programme for Government commits to the introduction of a deposit protection scheme and it is important that action in this regard is taken in the context of a strong evidence base. I have therefore asked the Private Residential Tenancies Board, which is the independent statutory body charged with the administration of the Act, to commission cost benefit analysis-based research on such a scheme and to report back to me with recommendations. I understand that the research will be put out to tender in the coming weeks and I expect that the board will revert to me with detailed research and recommendations by summer 2012.

Previous research on this topic by the PRTB has engaged in comparative examination of schemes existing in a number of other countries but has not included any detailed analysis of the costs and benefits of establishing a deposit protection scheme in Ireland. In line with the regulatory impact analysis guidelines for a proposal of this scale, a detailed cost benefit analysis of how a deposit protection scheme might be applied to the existing Irish system, and the costs arising, should be the initial action. Any new scheme must be integrated into the Residential Tenancies Act. It should be linked to the registration function of the PRTB, and perhaps also to minimum rental accommodation standards. The purpose of this further research is to identify what type of scheme could best suit the Irish market and its costs and operational implications. This will then enable me to make a definitive, evidence-based, recommendation to Government on this matter in due course.

Joe Costello (Dublin Central, Labour)
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I thank the Minister for his reply and I am pleased that the matter is being progressed by the Government. I hope there will be no delay because there have been complaints for decades. The situation is dire in many cases. I regularly receive complaints at my clinics. Tenants complain that the landlord retains a substantial portion of the deposit. In one case, the landlord retained €500 out of the deposit of €800 on the basis of wear and tear to the apartment. This is very much a moveable feast and it is very difficult to verify wear and tear over a period of time. The current rules as regulated by the PRTB are not sufficiently tight to allow for proper criteria or verification.

The only way to deal with this issue is by way of an independent mechanism. Rules and regulations alone are not satisfactory. I am not in favour of establishing another quango of any description. Local authorities deal with a large body of tenants and they would be best qualified to deal with private rental deposits or, failing that, the PRTB which is the regulatory body, should be responsible. I hope the process being undertaken by the Minister can be conducted without delay and a structure will be in place in the not too distant future.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I assure Deputy Costello that I am not happy at there being too many quangos. I have demonstrated this view in recent times. The Government is committed to solving this problem. The programme for Government, the statement on housing approved by the Government at the instigation of Deputy Penrose and the Government's recent housing policy statement which was published in July, all clearly indicate that the rental market will be of increasing importance to the citizen because the capital moneys are no longer available to build local authority housing. The private rented residential market will be coming under scrutiny and will be included in the regulatory framework in the future. The research to which I referred will consider both the security and the insurance-based approaches to the scheme. We will see what are the costs and the operational structures required within the PRTB and the legislative implications arising. I assure the Deputy it is a Government priority. I hope the research will be available on time by mid-2012 and that we will be able to proceed with the implementation of the recommendations before the year is out.