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May 2015

Question

My wife and I were renting a house in North Dublin for some time, however we recently vacated the property due to the fact that I found a new job which necessitated that we move. The house was let by an agency whocollected my deposit when I moved in and the subsequent rental payments.

Since moving out, my deposit has not been returned and when I raised this issue with the agency, they informed me that the landlord seems to be refusing to return our deposit. The agency insisted that the landlord is obliged to return our deposit and if the problem persists we should contact the PRTB.

It comes as a surprise to me that the agency can simply absolve themselves of any responsibility for the return of my deposit given that they collected it in the beginning. Is this the case? Any help would be greatly appreciated.

 

Answer

Deposit retention is an issue that frequently crops up at the end of tenancy agreements. The legislation that covers your query is the Residential Tenancies act 2004, and the Property Services (Regulation) (PSR) Act 2011, and the PRTB is the relevant forum for adjudicating your complaint.

To deal firstly with the issue of the agent collecting the deposit and paying it onto the landlord, the PSR Act sets out in Paragraph 16 of the required letter of engagement between a letting agent and his client (the landlord) that the deposit must be paid by the agent to the client (in this case your landlord) when the tenant enters into the property. (“16.2: Any moneys paid by a person to an Agent as a ‘tenancy deposit bond’ to secure against breaches of the tenancy, such as damages or non-payment of rent, will be paid into the Agent’s ‘client account’ identified in clause 19. The ‘tenancy deposit bond’ shall be paid to the Client once the tenant has entered the tenancy.”).

The letting agent was therefore correct to pay the deposit to the landlord. It is good practice that it is made clear prior to the commencement of the tenancy that it is the landlord who will hold the deposit. In some instances the landlord will request that his agent holds the deposit by separate arrangement to avoid cash-flow issues at the end of the lease. You should note, however, that the deposit remains the lawful property of the tenant unless the landlord establishes a right to it, and the onus is on the landlord to prove why part or all of the deposit should not be returned.

I note that you’ve stated in your question that you recently vacated the property due to the fact that you have found new employment and it was necessary that you move.

You have not stated under what form of lease you occupied the property and I presume you signed a standard fixed-term tenancy agreement. Your rights are generally not affected in the event of a new fixed- term agreement not being in place. It is the responsibility of the landlord to register the tenancy with the PRTB, whether he does this himself, or has the letting agent do it on his behalf.

You can check yourself whether or not this has been done. I presume that you then fully complied with the terms of your lease, that the property is not damaged beyond normal wear and tear and that there are no unpaid utilities. I also presume that you served the correct notice on your landlord of your intention to vacate the property and that you are not breaking a fixed term lease – a common misconception among tenants is that a landlord can be given a month’s notice of their intention to vacate a property.

Presuming, then, that the correct notice was served and that there is no valid reason on the face of it for the landlord to withhold the deposit, you may take a case against your landlord via the PRTB website at a cost of €15, or via a paper application to the PRTB at a cost of €25. Mediation by the PRTB can take a number of weeks and adjudication of the case may take a number of months. Many landlords do not keep the deposit in an account separate from their own funds and the return of a deposit can cause cash-flow problems and your landlord may well find himself in this situation.

There has been discussion for some time about the possible establishment of an independent deposit protection scheme. The MediKids has made a number of submissions on this issue, however it does not look as if any significant progress has been made in relation to it.

Edward Carey is a member of the Society of Chartered Surveyors Ireland (MediKids) Residential Agency Surveying Professional Group