House buyers to get more protection
A new Government watchdog is to give consumers more protection in Ireland’s booming property market, it was claimed today.
A regulatory authority with robust powers was proposed by the Auctioneering/Estate Agency Review Group appointed by Law Reform Minister Michael McDowell.
“I am satisfied that the new authority will provide a robust, progressive structure to underpin a high quality, transparent, and consumer friendly property market into the future,” Mr McDowell said.
The Review Group’s report today called for the licensing of auctioneers and estate agents as well as property letting and property management agents.
It also insisted on regulation, monitoring and inspection of the services provided by practitioners within the industry.
Consumers must also be informed of their rights and have protection and redress in the market, the Group said.
Mr McDowell said the new authority, which will be based in Navan under Government decentralisation, will be established on an interim basis, pending Dáil legislation.
“I will be keen to see the new authority develop a strategy for the transfer of the licensing function from the Courts Service.
“The new legislation will address the provision of monitoring and inspection functions, a code of ethics and practice for the sector, a consumer complaints and redress system, arrangements for the better protection of clients’ funds and provision for sanctions and compensation arrangements,” he said.
Speaking before the report’s launch, McDowell said the State has been naïve in its approach to date in regulating the property market.
“The current situation is not an effective or modern system and the consumer’s interest is not adequately served.”
Mr McDowell said that the regulatory body should have the power to penalise licence-holders and withdraw licences if necessary.
“The district court can only rescind an auctioneer’s licence on the clearest possible grounds, almost on criminal misbehaviour or gross dishonesty. That’s not an adequate protection for consumers,” he said.
“You will now have to show some competence and some degree of education or experience which would warrant you being trusted with this capacity to handle very significant transactions for many people, the most important transaction in their own life,” he added.
The Review Group also urged all practitioners to keep money from client accounts separate from commercial funds.
Mr McDowell said the practice of ’gazumping’ – where one bidder makes an offer on a property only to be outbid by a bigger offer – would also be addressed.
“It causes heartache to many people,” he said. “They feel they have a deal and then they’re told somebody has come on the inside track.”
The traditional ’guide price’ on property will be replaced by an ’advised minimum price’ with which Mr McDowell said the estate agent will put his or her ethical and professional reputation on the line by setting.
The minister set up the Review Group in July 2004 to examine all aspects of the auctioneering profession in Ireland and to make recommendations for any changes in terms of structure or legislation to ensure a proper and appropriate auctioneering, property letting and property management service to the public.
The minister’s spokesman added: “The review was initiated against a background of a considerable level of public concern about certain selling practices in the market, apparent deficiencies in regulatory and supervisory arrangements in respect of service providers and the need to take account of new forms of property marketing including franchises and the internet.”
The Group included representatives of the auctioneering profession, consumers, the Competition Authority, Law Society of Ireland, the farming sector, the co-operatives sector and Government departments, and was chaired by Alan McCarthy, former chief executive of Coras Trachtala.
