Deposits - Discuss! (Mod Note in post 40)

UCDVet

murphaph wrote: »

That's the escrow system that's in place in the UK. Couple of weeks if there's no dispute, several weeks if there is a dispute. No escrow agency is going to be able to hand over a deposit on the day a tenant vacates (they won't carry cash and a bank transfer will take at least a day in the best case scenario...so the tenant still needs to have his deposit for the next place saved up as the LL there is not going to give him the keys until he has the deposit in his account or in his hand.) and that's assuming the agency can inspect on the exact day the tenant leaves.

Anyone who wants an escrow system must reckon with this built in delay in getting deposits back.

Sure - if there are disputes, that's a different story. But otherwise? Come'on. Tenants need to give notice, or it's the end-date on the lease. It's not like it should ever be a surprise. Date is known well in advance. Do they not have cashier checks in Ireland?

I purchased a house in the US and that's how it was done. Go sign papers, if everyone is happy, seller hands over the keys and the buyer hands over the cashier's check. Check is validated by the bank beforehand and is verified by the recipient immediately via phone. It's as good as cash, but harder to steal.

When I sold the house, I got a cashiers check - again - at closing. For the agreed upon amount. Same story. No way would anyone expect you to sign paperwork and walk away empty handed on the hopes of getting what you were entitled. And like I said, I bought and sold, no problems. And it was through an escrow agent and all proper/above boards.

And that was years ago, before the all these marvelous technologies. I just moved into an apartment and I was able to pay the landlord his deposit/first month's rent in MINUTES. Honestly, it was probably seconds, and he just wasn't paying attention. I went to my bank's website, typed in the numbers, got a confirmation text, entered that, transferred the money, and he said, 'Okay - I got it. Swing by and pick up the keys whenever you like'.

But when it's time to get a deposit - suddenly the same landlord/escrow company needs a few weeks to sort it, and everyone thinks nothing of it?

murphaph

The banking system in Ireland (and Europe at large) simply doesn't allow that sort of setup. The very quickest a transfer from one bank to another will take is one working day (new SEPA rules, used to be longer). There are bank drafts which act like cashiers cheques and I don't know if there's a way to validate the genuineness of one over the phone. The problem comes when a partial refund of deposit is deemed appropriate. The agent can't have a bank draft for every possible amount there on his person, so we're back to the bank transfer and this will take at least a day. The agency might also be swamped on the day you are moving out and may not be able to get an agent round until the next day or so.

mdebets

murphaph wrote: »

Yup. I'm all for a properly managed escrow system (I actually just follow the German model for my Irish tenants and put their deposits in an interest bearing savings account and give them the lot upon termination of the tenancy, but I'm not obliged to do that by any means). I use a standard Rabo direct account for my Irish tenants, which yields currently 1.45% before DIRT. For my German tenancy I must do things a little differently because I must be able to show a specific paper trail wrt deposit and interest etc. Most banks charge for this service. My bank offers it for free but pays the current statutory minimum of 0.2% interest, so my German tenant with guaranteed interest receives much less than my Irish tenants, which is sort of ironic.

If a proper escrow system comes in then it'll be a couple of weeks at best (assuming no disputes) before a tenant gets their deposit back, even in part. So, tenants will just have to have the deposit for the next place saved up and put away. To be honest I wouldn't want a tenant who couldn't save up a deposit for a place so this escrow thing would filter out some of the dead wood from my perspective, which can only be a good thing.

In Germany it's 3 months deposit but you can usually pay one month before tenancy commencement and the remaining 2 months within a set time thereafter. Something like that would be fine too.[/QUOTE

You can't just take the German escrow system on its own and transfer it to Ireland, you need to see it in the wider context of renting in Germany.

In Germany, the average length of tenancies is much longer than in Ireland. With many people, moving after a year in Ireland, its much harder for tenants, to come up with additional 6 months rent (old and new deposit). It's much easier in Germany, if you have several years, to save for the deposit, plus the possibility, to pay the deposit over two or three months after you have moved in, by which time you already have received your old deposit back.
The higher deposit (as a better protection of the landlord from rough tenants) in Germany is also balanced by other legislation that protects tenants from rough landlords (you can reduce your rent, if the landlord doesn't fix things he is supposed to fix and he is only allowed to raise the rent by a maximum of 20% per year). In Ireland, this is (to a lesser degree) offset by a lower deposit, to make it easier for a tenant to move.

Take for example, if the hot water breaks in your apartment and the landlord is not willing (or able) to pay for the repair. In Germany, you can just reduce your rent, which makes it more likely, that the landlord is finding a way to repair it. In Ireland, you effectively have to sue (via the PRTB) the landlord to get it done, which will take a while, during which time you are still expected to pay the full rent, or you can move out, which will mean you will loose your deposit, but it would be unlikely that a landlord would win a case for outstanding rent against you. If you now increase the deposit to 3 months rent, it would make it much harder for the tenant to move out and loose 3 months of rent. This would mean that the landlord has even less incentive to fix the warm water, as he know that the tenant can't move out and still has to pay the rent, and the PRTB order to fix the warm water is a long way away.

Similar points can be made about rent increases. In Germany, you can calculate upfront, what the maximum rent in 3 years time will be and you have government compiled list of average rents. In Ireland, the landlord can raise the rent to the open market value (which is debatable, as know official list exists), without taking into account the current list. If the overall rents increase massively, he could increase the rent by 50 or even more percent over a few years, giving problems to tenants who can't move, due to not having the money for a new deposit, but also can't pay the increased prices.

murphaph

There's no escrow system in Germany. The deposit can be and usually is held by the landlord.

I'm on record here as also being in favour of rent controls to bring stability to the Irish rental market.

MouseTail

murphaph wrote: »

There's no escrow system in Germany. The deposit can be and usually is held by the landlord.

I'm on record here as also being in favour of rent controls to bring stability to the Irish rental market.

Ireland will have an escrow system this year. At least Id be surprised if it drags into next year. There are murmurings on rent controls, but I cant see it happening.

murphaph

If you think it's bad now wait until the PRTB are administering this escrow system.

BeatNikDub

ted1 wrote: »

2 months deposit, your having a laugh. Until there is an escrow in place with the PRTB holding it anybody who gives more than 1 month is daft.

As for bank statements, revenue would even ask for them.

I looked at a place about 5 years ago and the landlord was asking for everything you listed. The place was a kept badly and was dirty. I let rip and him and his wife and put them in the place. Rented the sane house 2 doors down that was much nicer and didn't require any if the above. Just a deposit and a conversation with the landlord and lady

Absolutely agree Ted.

coffee_cake

As for dinnyiriwin, there is not one chance in hell I would ever going to pay 2 months deposit or even 3.

dinnyirwin wrote: »

Landlords now have a market where they can claw back some of the expenses that were handed out to them over the last few years and they could do nothing about. .

A deposit is NOTHING to do with clawing back your standard expenses...

The_Morrigan

This thread is to allow the discussion of all things deposits; norms, aspirations and theories on how to make the whole process more efficient for both landlords & tenants.

Posts from the Open Viewing thread have been copied over to here so you can pick up where you left off.

Morri

dinnyirwin

bluewolf wrote: »

A deposit is NOTHING to do with clawing back your standard expenses...

I suggest you read posts before commenting on them.

Nobody said that an increased deposit was to claw back expenses.
You took two different parts of a post and essentially added 2 and 2 and got 5.

And then you thank another poster who did exactly the same thing as you have just done too.

http://www.boards.ie/vbulletin/showpost.php?p=88942693&postcount=29

Please read the damned posts properly before replying to them.

The_Morrigan

dinnyirwin wrote: »

.......

Please read the damned posts properly before replying to them.

If you post in that manner again you'll find yourself without access to the forum. Addressing other posters in that way will not be tolerated.

Stheno

I'm potentially becoming a renter in the next year after years of living in my own home due to a marriage breakdown.

While I can stump up a deposit and employer references, what am I supposed to do about landlord references?

The_Morrigan

Stheno wrote: »

I'm potentially becoming a renter in the next year after years of living in my own home due to a marriage breakdown.

While I can stump up a deposit and employer references, what am I supposed to do about landlord references?

Everyone has to start somewhere and not everyone is going to have a reference from a previous landlord. Deposit and employer references are a good start and an explanation as to why you weren't renting recently.

billie1b

dinnyirwin wrote: »

Im a landlord and though I use an agent now for all of my properties the things that would impress me at the moment are.

- Have your references (job and 2 or more previous landlords) with you.
- Have bank statements with you.
- Have a cheque ready and write in the first months rent plus 2 months deposit. (dont write in the amount til you hand it over or you might be wasting a cheque).
- Look respectable. Its not as easy as people think for a scumbag to look respectable. They just wont go to the effort. There are exceptions of course but in general.
- Arrive early. If the landlord does happen to be there early he might want to be in and out before everyone else is to turn up if he likes you and you want to take the property. He wants to avoid the scrum viewing too if at all possible.
- Ask questions, but dont start asking for things that the landlord may not want to provide. Like oh, that microwave is a year old, we would like a new one before we take it.
- If its furnished dont start asking the landlord to take away his own furniture = more hassle for him.


If you are a couple make sure you have references and statements for both people.

Some people dont like the idea of paying 2 months deposit but I can tell you it impresses landlords. Sets you out from the crowd.
As a matter of fact I have instructed my agent to ask for two months deposit for any let now. And I see it going to 3 months as standard in the not too distant future. It just gives the landlord that little bit more protection in case the tenant is a scumbag. And generally scumbags wont hand over 2 or 3 months deposit plus a month in advance.

Putting off bringing references, deposit etc just puts you behind anyone that has the ability to deal on the spot.
Having all those things allows the landlord to make a deal and then he can check them out in the morning. Instead of waiting around the next day for a whole heap of them.

You wanna see my bank statement and I as a tenant want to see yours and your statement from your mortgage company to show your payments are up to date and your not fobbing the money off!

Grolschevik

Sorry: posted this in another deposit thread, but it's probably more relevant here:

The whole point of the double or triple deposit idea is to give landlords more of a buffer against overholding, non-paying tenants, right?

However, it seems to me that those sorts of tenants who would not pay rent or overhold will still do so. But they'll just start doing so earlier. As in "I paid two (three) months worth of deposit, so I just won't pay my last two (three) months rent".

It's a false solution. The time it can take for a legal and actually enforced eviction make it so. Those tenants who would take the piss will still do so. And the perennial suspicion of landlords and deposit retention might even make it more likely?

Whereas those that won't do it will be financially inconvenienced or be turned off that property.

dinnyirwin

Grolschevik wrote: »

Sorry: posted this in another deposit thread, but it's probably more relevant here:

The whole point of the double or triple deposit idea is to give landlords more of a buffer against overholding, non-paying tenants, right?

However, it seems to me that those sorts of tenants who would not pay rent or overhold will still do so. But they'll just start doing so earlier. As in "I paid two (three) months worth of deposit, so I just won't pay my last two (three) months rent".

It's a false solution. The time it can take for a legal and actually enforced eviction make it so. Those tenants who would take the piss will still do so. And the perennial suspicion of landlords and deposit retention might even make it more likely?

Whereas those that won't do it will be financially inconvenienced or be turned off that property.

The eviction process could start while the non paying tent still has money in their deposit left. As they face the prospect of losing more of that they might well decide they dont want to lose anymore. Or like you say they might just dig in, but that would be rare.
Also if you get a tenant who will put up three months deposit next to one who can only put up one month, you would definitely think the tenant with 3 months deposit is more likely to be not be thinking about not paying the rent for the last three months. ANd you would think they would be more solvent and able to pay the rent.

Anyway 2 months will be standard by next year (already discussions about it on irishlandlord and askaboutmoney) and 3 months wont be long after. As it is at the moment I never see the deposits from my tenants. The agent hangs on to the deposit. The agent will issue a cheque for the deposit 2 weeks after the tenant has returned the keys, to give a little time to see if everything is in order.
Problem is when there is more damage done than the deposit is worth.

I also think a central escrow service will be in place in the next couple of years. This can be used as reference very easily for both landlord and tenant.

dinnyirwin

billie1b wrote: »

You wanna see my bank statement and I as a tenant want to see yours and your statement from your mortgage company to show your payments are up to date and your not fobbing the money off!

Has that strategy ever got you into the property you wanted?

johnnyskeleton

dinnyirwin wrote: »

Has that strategy ever got you into the property you wanted?

Interesting that this is being mooted now, when there is a severe rental shortage (in Dublin) and people are doing almost anything to snap up even unsuitable properties. You are suggesting that demanding increased terms, on top of already increased rent, is not only a good thing but is simply levelling the playing pitch.

If there is a glut of rental properties in a few months time, is it right for tenants to demand that they pay no deposit, show no documents and have a unilateral break clause?

The system of one month deposit, one month in advance, previous landlord reference and work reference has stood the test of time and is fair to both sides.

If you want a better tenant, or the larger deposit etc, why not charge below market rent and say it is because of that, rather than trying to change the industry norms?

gaius c

dinnyirwin wrote: »

It really bugs me when people start expecting a basic level of service for paying me a huge chunk of their monthly payslip.

FYP

billie1b

dinnyirwin wrote: »

Has that strategy ever got you into the property you wanted?

Yeah, my landlord has shown me a statement of his up to date payements on the house, without asking but he never asked to see my personal bank account. He's a great landlord though, if theres anything wrong he has it fixed within days and doesn't higher the rent to recoup it. He lowered the rent by €100 of the asking price for us after meeting us. You on the other hand sound like the nightmare landlord we had in our previous house a couple of years ago, a cowboy

djimi

billie1b wrote: »

You wanna see my bank statement and I as a tenant want to see yours and your statement from your mortgage company to show your payments are up to date and your not fobbing the money off!

Mortgage payments are not really any concern of the tenant, but what I have said in the past is that tenants should start asking landlords for proof that management fees are paid and up to date, because that is an issue that will directly affect the tenanct, with things like clamping and service reduction (deactivation of key fobs etc) becoming very common now where management fees are in arrears.

billie1b

djimi wrote: »

Mortgage payments are not really any concern of the tenant

Just like my bank account is of no real concern to the Landlord, also Landlords should have to supply references from previous tenants and contact details, same as tenants have to

djimi

billie1b wrote: »

Just like my bank account is of no real concern to the Landlord, also Landlords should have to supply references from previous tenants and contact details, same as tenants have to

I can see why a landlord might want to see a tenants bank account details (just like Id like to see a landlords bank account details, so that I can tell if they if they have the money to actually run the tenancy properly), but the reality is that I am not going to hand over my personal financial details to somoene that I probably know as only a name and a mobile number from Daft.ie, and nobody in their right mind (be it tenant or landlord) should even consider it. The rental scene in this country is still far too much cowboy country for something like that to be considered safe practice.

billie1b

djimi wrote: »

I can see why a landlord might want to see a tenants bank account details (just like Id like to see a landlords bank account details, so that I can tell if they if they have the money to actually run the tenancy properly), but the reality is that I am not going to hand over my personal financial details to somoene that I probably know as only a name and a mobile number from Daft.ie, and nobody in their right mind (be it tenant or landlord) should even consider it. The rental scene in this country is still far too much cowboy country for something like that to be considered safe practice.

Exactly my point, neither would I be handing over any personal financial details to landlords

irishjig69b

Tell u all one thing I will never rent to social welfare people again dirty bast rads and wanting their rent deposit back, some people have a cheek, tread anywhere for this?

irishjig69b

irishjig69b wrote: »

Tell u all one thing I will never rent to social welfare people again dirty bast rads and wanting their rent deposit back, some people have a cheek, tread anywhere for this?

You sound like a real nice human being. Really hope that you are one of those landlords who finds themselves losing their investment property and going bankrupt.

The_Morrigan

irishjig69b wrote: »

Tell u all one thing I will never rent to social welfare people again dirty bast rads and wanting their rent deposit back, some people have a cheek, tread anywhere for this?

Deleted User wrote: »

You sound like a real nice human being. Really hope that you are one of those landlords who finds themselves losing their investment property and going bankrupt.

Cut it out - posts like these are not welcome here.

irishjig69b

The_Morrigan wrote: »

Cut it out - posts like these are not welcome here.

My point is I rented my property out to a social welfare girl with a kid 3 weeks later she moved her just outta the joy scumbag bf into it, had nowt but trouble and when she finally got out left the place in a tip, and her last social welfare check very strangely disappeared, now not all social welfare people are like this but a lot have no respect and I'd rather burn it than give it out to them again.........that answer u q Darko?

The_Morrigan

irishjig69b wrote: »

My point is I rented my property out to a social welfare girl with a kid 3 weeks later she moved her just outta the joy scumbag bf into it, had nowt but trouble and when she finally got out left the place in a tip, and her last social welfare check very strangely disappeared, now not all social welfare people are like this but a lot have no respect and I'd rather burn it than give it out to them again.........that answer u q Darko?

You do realise that your point is invalidated by your tone and style of posting right?
I've already asked you to cut it out - as per your first post there is no thread for that here!

irishjig69b

The_Morrigan wrote: »

You do realise that your point is invalidated by your tone and style of posting right?
I've already asked you to cut it out - as per your first post there is no thread for that here!

Right so, forgive me I thought this was a decision page, my bad