Sunday, February 10, 2008

Going, Going Gone...Consumers patience gone waiting for laws to protect them in property market!

Property for Sale, great river view, no basement!

There is a certain pattern to political events and action in Ireland. There is a crisis or media storm, Minister responsible wants to be seen as taking action, so he/she sets up a committee/taskforce to look into it. The group is told to report without delay given the urgency of the matter which they do....and then the findings of of the report remain unimplemented until another crisis/event occurs a number of years later.

And so it is with regulating auctioneers, estate agents, letting agents etc. In 2004 Michael McDowell set up a group to review the sector in light of concerns expressed. It worked very speedily and produced a report in 2005. In the interim the Government set up an implementation group....(I hope you are still with me on this) and last year the National Property Services Regulatory Authority was established on an ad-hoc basis. However as of today it doesn't have any statutory powers, so while it is engaging in preparatory work, it cannot regulate the activities of estate agents and auctioneers and cannot investigate complaints from property buyers and sellers if they arise and where necessary impose sanctions and award compensation.

This delay is unacceptable, in July 2005 the Government promised it would bring in these laws and two and a half years later, the latest information from the Government website suggests that the necessary legislation will not be published until late 2008 and given the time it takes for bills to go through the Oireachtas, it could be 2010 before consumers engaging in property transactions have the rights they badly need. The National Property Services Regulatory Authority which is based in Navan has appointed a CEO, and other staff, I assume, has a budget of almost €1m, but from a consumer prospective is a toothless watchdog.

Given the high home, land and property ownership levels in Ireland, large numbers of consumers are engaging in transactions each year. In particular the purchase of a home is a significant life event and with the large sums of money involved, it is vital that the profession meets the highest standards. While I have no doubt that the majority of estate agents and auctioneers do an excellent job, concerns and problems remain. The main issues for consumers include the misleading guide prices being advertised, inaccurate information about the property being provided, phantom bidders being used to artificially increase prices and blatant conflicts of interests. While the representative bodies such as the IPAV and IAVI can investigate complaints and take some disciplinary actions, they can only act on complaints made against their members. And while the majority are members of these associatons, you don't need to be. And even if they were to kick someone out of their association, they can still practice in the market. And as with all self regulatory bodies the public perception is that these bodies will side “with one of their own” and therefore consumers lack confidence in them and are less likely to complain.

I would also be concerned at the limited requirements for getting an auctioneers licence at present, made worse by the fact that once a licence is obtained there is a total lack of an ongoing supervisory and disciplinary system. It is positive that the NPSRA will have powers to set minimum levels of education and qualificiations for estate agents and auctioneers and will apply fitness and probity criteria.

Its funny that the Government can rush legislation through the Oireachtas when exchequer funding is at stake, but drags it heels on important pieces of legislation like this which are vital to protect consumers. CAI will continue to call on the Department of Justice, Equality and Law Reform to publish the legislation by the summer and to have it passed into law by the end of the year at the latest.