Brendan Kenneally (Waterford, Fianna Fail)

I thank Deputy O'Brien for sharing his time with me and I welcome the opportunity to speak on the Property Services (Regulation) Bill 2009. There is agreement on all sides of the House that property management has been crying out for regulation. Anything that streamlines services or makes them more efficient is to be welcomed. When we speak about small and medium enterprises we regularly call for costs and bureaucracy to be cut. Costs in the industry will be reduced by changing the licensing of auctioneers from the current court based system to the regulatory regime proposed in the Bill.

I do not usually like to see new bodies being established or power being taken from Departments but this authority is different because it will not cost the Exchequer anything. Too many bodies set up in the past did not fund themselves and I do not see any difficulty with an agency being self-reliant. The fees it generates from the industry will cover its operating costs of €3 million per year. I assume the big auctioneer firms which have a presence in almost every town and city across the country will pay the lion's share of the fees. I hope the amount of funding they provide will not give them a disproportionate influence over the authority's activities.

It was sensible of the Minister to set up an implementation group and a chief executive designate because there is always a lead-in period after legislation comes into force, particularly where a new organisation is being established. Much of the preparatory work has already been done. I assume the State is paying the salaries of the individuals involved in the implementation process and I ask whether this expenditure will be recouped when the authority begins to generate its own income.

The licensing regulations are important because we are all aware of how rapidly the property market developed during the late 1990s and the early years of this century. Regulations did not develop as rapidly as one would like, however, and it is time that we caught up.

I am glad property management companies will be covered by the regulations. While they are more prevalent in Dublin, property management companies operate in every corner of the country. They have largely been unregulated and, while it is probably fair to say that the vast majority carry out their functions in an exemplary manner, a number do not.

While the Bill sets out a number of conditions that must be met before a licence is granted, I could not find out how long a licence will last. One of the licence conditions is that the individual must be tax compliant. A tax clearance certificate from Revenue is valid for a year but if the licence expires after two or more years, its holder may not be tax compliant for the full duration. I wonder if there is a mechanism in the Bill to check whether somebody who is not tax compliant is operating under the scheme. Obviously, that should not be allowed.

I wish to speak about section 44 of the Bill, which relates to letters of engagement. I am not sure if I have the correct version of the Bill, as passed by the Seanad. My reading of the section is that when a person employs an auctioneer to sell a house, within a short period of time the auctioneer must set out the agreement or contract between them in a letter of engagement. What happens if the person employs a second auctioneer, which happens quite often at present? I assume a second letter of engagement must be issued in such circumstances. I do not know what prices are being charged, or rates of commission are being earned, by auctioneers at present. I have very few dealings with them. One might have agreed rates of commission of 2% or 3% in the letters of engagement with both of one's auctioneers, in addition to the other matters agreed in the letters. As far as I know, if both of them are involved in the sale of one's house, as things stand the commission is split between the two of them. Under this legislation, would one have to pay commission to both auctioneers even if one of them had done very little? If so, one might not be keen to hire a second auctioneer even if that would make it easier for one to dispose of one's property.

I would like to ask a similar question about letting agents. As far as I can see, anyone who is covered under this legislation must issue a letter of engagement. Will such a letter be needed if a letting agent rents out a property for as little as €500 a month? Many letting agents have separate property management companies. If such a company is managing the renting out of a property, it might be on a commission of 10% of the rent per month, for example. That would be a small amount of money if the company were involved in renting just one property. I wonder if this form of bureaucracy is necessary in cases of that nature. If a property is being rented for a payment below a certain threshold, perhaps the transaction should be exempt from these requirements.

I welcome section 67, which provides protections for people who report improper conduct. We are familiar with certain cases, such as the AIB case, that were brought to our attention by whistleblowers. It happened in FÁS as well, although I think that was done under a cloak of anonymity. We have to protect these people. I welcome the fact that this legislation will offer some protection to people who act in good faith. Does the authority have the power to ensure such people are not discriminated against? It is easy to ensure a person is not dismissed, or does not suffer a reduction in salary, but it may be more difficult to prove that a promotion opportunity has been denied. It needs to be watched. A simple and clear mechanism should be available to that end. Will it be possible for the authority to accept an anonymous report from a person who might be worried about being victimised? A person who works for a licensed operator might be happy to come forward as long as his or her name is not published. We must protect honest men and women. Their integrity is invaluable to us.

I am pleased to have had an opportunity to say a few words on the Property Services (Regulation) Bill 2009. I compliment the Minister on its introduction. I hope it will make its way into law shortly.

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