Minister for Justice, Equality and Defence, Alan Shatter T.D., has welcomed Dáil approval of the Property Services (Regulation) Bill 2009. He said that amendments he had tabled and which had been accepted during its passage through the Dáil, would introduce much-needed transparency to the residential and commercial property markets. This was a commitment in the Programme for Government which he was pleased to be in a position to discharge in this legislation.
The Minister said “I believe that publication of residential property sales prices and the establishment and maintenance of the Commercial Leases Database by the Property Services Regulatory Authority will help to restore much-needed confidence to the property market.
Together with the new statutory requirement on auctioneers to publish a realistic "advised market value" of property for sale rather than using the discredited "guide price" mechanism, the legislation will serve to enhance consumer protection and improve consumer confidence.”
The Minister said that he had also introduced new provisions to address the potentially serious conflict of interests which can arise where an auctioneer promotes an apparently attractive loan package to intending purchasers without revealing that the financial institution providing the loan had already funded the development (or was prepared to fund the development where housing units were being sold from plans).
The Minister said “This conflict of interest has arisen in particular in the case of multi-unit developments where a financial institution has had links with the developer and sought to reduce its exposure to risk by assembling what appeared to be an attractive loan package for intending purchasers. Purchasers who availed of the package ended up paying ‘over the odds’ for the property.”
Having completed its passage through the Dáil, the Bill will now return to the Seanad for consideration of Dáil amendments; the Minister said he was confident that the legislation would be enacted before the end of the year.
The Minister said he regarded the publication of residential property prices and establishment of the Commercial Leases database as key Government priorities and he expected that the Property Services Regulatory Authority, which is being established under the legislation, and the Revenue Commissioners would put a user-friendly and accessible system in place as soon as possible. Preparatory work had already been underway for some time. He said he wanted to thank the Revenue Commissioners in particular for their participation in the new arrangements.
As regards the new licensing requirements for auctioneers and letting agents, the Minister said that a number of regulations specifying the required eligibility standards in relation to education and training and professional indemnity insurance would have to be made by the Authority. In the meantime, the current licences of auctioneers and letting agents issued under the District Court system would remain valid until 30 June next.
The Minister said that he was anxious that the licensing of property management agents, who are not currently subject to any licensing arrangements, would be given immediate priority by the new Authority.
The Minister said “The introduction of licensing arrangements for property management agents is urgent in order to raise standards in that segment of the property services sector. Many of the problems suffered by apartment owners in multi-unit developments would be solved if proper standards and redress mechanisms were put in place. The new legislation will achieve that objective and I am convinced that the new licensing requirements, together with the provisions of the Multi-Unit Developments Act which entered into force earlier this year, will solve many of the problems experienced in recent years by apartment owners and owners’ management companies”.
23 November 2011
ENDS
Notes to Editors:
The Property Services (Regulation) Bill 2009 provides for the establishment of the Property Services Regulatory Authority. The main functions of the Authority will be as follows:
Licensing of property services providers
The legislation will replace the current court-based system for regulating auctioneers and house agents with an updated regulatory system covering auctioneers, estate agents, and property management agents.
As part of the licensing system, the Authority will specify and implement the following standards:
· standards relating to the required education, training and experience levels of applicants for licences;
· levels of professional indemnity insurance,
· quality of financial accounting systems, and
· ethical standards to be observed in the provision of property services
Redress mechanisms
The Authority will investigate complaints against auctioneers, estate agents and property management agents and impose sanctions in respect of improper conduct. It will also carry out investigations on its own volition. A Compensation Fund is also being established to provide compensation for losses arising from the dishonesty of licensees.
Setting other property related standards
Under the legislation –
· Auctioneers, estate agents and property management agents will be required to conclude a detailed agreement (‘letter of engagement’) with clients within 7 days of agreeing to provide a property service;
· Auctioneers will be required to publish a realistic "advised market value" of property for sale rather than using the discredited "guide price" mechanism;
· In order to avoid any conflict of interest and ensure transparency, an auctioneer who wishes to provide a financial service to a purchaser of property which the auctioneer is selling will be required to obtain the agreement of the vendor of the property.
· An auctioneer who promotes a loan package to intending purchasers will be required to indicate whether or not the financial institution offering the loan had already funded the development (or was prepared to fund it where housing units are being sold from plans).
· In the case of private treaty sales, auctioneers will be required to maintain records of all offers received in respect of property.
· The legislation gives the new Authority a power to make regulations in relation to other property-related matters, such as specifying the content of advertisements for the sale or letting of property; standards for measuring property; the determination do the cost of surveys, etc.
Residential Property Prices and Commercial Leases
The statutory functions of the new Authority will also include –
· the publication of residential property sales prices; and
· the establishment and maintenance of a public database containing relevant details of letting arrangements and rent reviews in the commercial property market.
These measures will help to restore consumer confidence in the property market.