Deposit Protection Scheme
From the 1st of April 2013 Northern Ireland introduced a scheme to protect tenant’s deposit. Up until that date tenants in Northern Ireland were in the same position as their brethren in the Republic i.e.
the landlord held the deposit as security against breaches of the tenancy agreement and the tenancy agreement set out the circumstances in which the deposit was to be treated at the end of the tenancy agreement.
There are two types of schemes which have been approved to operate in Northern Ireland, the custodial scheme and the Insurance scheme:
- The Custodial scheme, which is free for both the landlord and tenant to use, is where all the deposit is handed over by the landlord to the scheme administrator for safe keeping in a designated account and either the tenant or the landlord can apply at the end of the tenancy for repayment of the deposit. In the event of a dispute the scheme administrator will hold on to the disputed amount until the dispute is resolved.
- The Insurance scheme is where the Landlord holds on to the deposit and pays a fee and any contribution towards insurance to the scheme administrator. The Landlord refunds the deposit to the tenant when it is due to be refunded. In the case where there is a dispute, the landlord hands over to the scheme administrator the disputed amount to safeguard until the dispute is resolved.
The Private Residential Tenancy Board commissioned a study entitled “Investigation of the Viability of Establishing a Deposit Retention/Protection Scheme (s) In Ireland”. The report was completed in 2009. In its most recent annual reports Threshold have called for the introduction of a similar scheme as introduced in Northern Ireland.
Mr Bob Jordan, Threshold Chief Executive, said:
“The problem of deposit retention has become more acute in recent years because many lanlords themselves are facing financial difficulties and simply don’t have the money to pay back”