Cian O'Callaghan (Dublin Bay North, Social Democrats)
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190. To ask the Minister for Housing, Planning, and Local Government when the tenancy deposit protection scheme will be commenced; and if he will make a statement on the matter. [38755/21]

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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The Residential Tenancies (Amendment) Act 2015 provided for, among other things, the establishment of a tenancy deposit protection scheme to be operated by the Residential Tenancies Board (RTB).

The Programme for Government commits to the examination of a system of holding rental deposits and how best to achieve this is under consideration my Department.

However, there have been significant changes in the rental market since the 2015 scheme was first envisaged and designed. For example, the 2015 scheme was intended to be financed by the interest payable on deposits lodged; this is no longer viable, given the current financial market conditions.

Furthermore, it is noteworthy that disputes relating to deposits are no longer the most common dispute type referred to the RTB.

Financing the operation of the scheme is an important consideration, particularly in terms of ensuring that the likely outcomes of a new scheme are achieved efficiently and effectively and that the best value from public funds is secured. Careful consideration is therefore required to introduce any necessary reforms and enhancements to the 2015 scheme, with a view to considering whether and how to introduce a re-designed scheme that is fit for purpose and suitable for current and future rental and financial markets.

Any review of the scope and provisions of a Deposit Protection scheme will need to take account of changes in the residential sectors since the 2015 Deposit Protection Scheme legal provisions were enacted, to inform any necessary legislative change. Consideration will need to be given as to whether or not it is feasible to proceed to revise and implement a deposit protection scheme at this time, or to defer to a later point in time, when the RTB's Change Management Plan has been fully implemented and more robust data and information is available for consideration.

The RTB has cut case times for deposit-related disputes as the introduction of new processes has borne fruit and the question of proportionality is key and it is imperative to question whether the scale of spending and intervention required is commensurate with the scale of the issue. From a value-for-money perspective at a time when the rental market is experiencing extreme pressure in terms of supply and costs, the introduction of a deposit protection scheme would require careful consideration.

Section 7 of the Residential Tenancies (No. 2) Act 2021 inserts a new section 19B into the Residential Tenancies Act 2004 which will apply to tenancies created no earlier than one month after the passing of the Act (i.e. from 9 August 2021), to restrict the total amount that a tenant is required to pay to a landlord by way of a deposit or an advance rent payment to secure a tenancy to no more than the equivalent of 2 months’ rent (i.e. any deposit cannot exceed 1 month’s rent and any advance rent payment cannot exceed 1 month’s rent). A restriction of the equivalent of 1 month’s rent is also placed on the amount that a tenant is obliged to pay as a regular advance rent payment to a landlord during a tenancy. Provision is made for a student residing in student specific accommodation to choose to pay a greater amount of advance rent, if he/she so wishes.

These measures are intended to greatly reduce any financial exposure to tenants, including students who do not opt out of the new protections, on foot of paying such restricted upfront payments.