Landlords and tenants regularly end up at odds when a tenant is leaving and seeking the return of their deposit. Irish start-up Deposify aims to solve those problems with its deposit management service.
Tracy Keogh, Deposify's chief operating officer, says the concept of deposits was first developed in the mid 1900s and we have not really innovated on it since. A lot of tenants do not realise that the deposit is actually legally theirs and if a landlord takes in a deposit at the start of a tenancy, they need to find it at the end of the agreement. She says the problem is really down to a lack of trust. Some tenants do not trust their landlords to repay their deposit and so refuse to pay the last month's rent on the property. And then some landlords mix the deposit in with their own funds which could mean that the money is not available to repay to the tenant when it is needed.
Ms Keogh says that over 50% of landlords outsource the issue to letting agents, but these agents are seeing more problems in the area of appliance and administration. Describing Deposify as a deposit management system for landlords and tenants, Ms Keogh says the company also manages disputes. She says that rows on deposits can take 12 to 18 months to resolve, and can include legal costs. The Private Residential Tenancy Board process takes too long, Ms Keogh believes as the value of the claim is usually quite low.
Deposify is looking to best practice in the US, where things are a little bit further along in terms of compliance. Ms Keogh says that landlords there can not co-mingle funds and a lot of admin is required to set up separate accounts. There are also higher risks involved, as fines could be three times the size of the deposit. One US landlord was three days late in replaying the deposit due to an oversight and was fined a total of $40,000, she explains.
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