Dáil debates

Wednesday, 10 November 2010

Property Services (Regulation) Bill 2009 [Seanad]: Second Stage (Resumed)


1:00 pm

Photo of John BrowneJohn Browne (Wexford, Fianna Fail)

I would like to make a few brief comments on the Bill, which I welcome. The Minister, Deputy Dermot Ahern, and his officials have given a great deal of thought to its implementation. Its origins derive from a report containing 43 or 44 recommendations. That report was worthwhile at the time and the Minister is implementing some of its recommendations. We have all seen how the property boom has affected some of the regulations covering auctioneering, solicitors and other related areas. The Irish property market covers a wide area ranging from sales, purchases, financing, letting transactions involving land, commercial and industry property and domestic dwellings. Any Bill would have to reflect the different views of interests in all those areas.

We have heard of many difficulties clients have encountered in purchasing property, particularly when prices were increasing on a regular basis. There was the phenomenon of gazumping, to which previous speakers referred, where a potential purchaser had practically agreed a purchase price with an auctioneer and on returning an hour later to complete the purchase agreement he or she learned that another potential purchaser has offered an alleged increased price and one party was played against the other; as a result of that the price of houses, in particular, escalated out of all proportion. We also saw a proliferation of auctioneers setting up businesses in every town and village throughout the country but most of them have now ceased trading.

We have returned to a position whereby only what we would describe as long-term auctioneers, that is, those who have been part and parcel of every town and city for many years, remain. They have stood the test of time. This area required legislation and further consideration will be necessary in future to ensure we do not return to the bad old days of recent years.

I do not know how the Minister proposes to address the issue of mortgage brokers, on which I ask him to comment. The number of mortgage brokers being established proliferated for a time. Some of them made life difficult for people by securing loans which the borrowers had no chance of repaying. All Deputies are being contacted by people who cannot make loan repayments of €1,200, €1,300 and €1,400 per month because their mortgages were secured on the basis of false details of income. This falsification occurred to ensure the banks provided a loan. A tight regime will be needed to govern this area.

While much of the blame for the problem I describe lies with the banks, much of the documentation presented to the banks did not reflect the earnings of mortgage applicants, many of whom find themselves in serious difficulty as they try to repay the loans. I wonder how decisions taken by banks to issue loans that were based on false details of income would stand up legally. This matter must be addressed to ensure such circumstances do not arise in future.

In many cases, people who have leased buildings or rented houses encounter difficulties when they seek to have their deposit returned. The landlord of the building or house frequently finds a flimsy excuse, damage to paintwork for instance, to avoid refunding the deposit. This is an area of major concern which must be addressed.

Speakers referred to ghost estates, an issue that has become a popular topic of conversation. How did the powers that be arrive at the recent figure on the number of ghost estates cited in newspaper reports? It appears they included holiday homes in the figures. Holiday homes do not belong in this category because their owners visit their properties at weekends, in holiday periods and at other times of the year. They should not be included in figures on ghost estates. In small villages such as Kilmuckridge and Curracloe and in the magnificent village of Rosslare, one finds that those who come at weekends and various other times of the year spend a great deal of money and usually visit local pubs, hotels and shops. I would be concerned, therefore, if it were to transpire that this group had been included in the figure on ghost estates.

The figures reported also appear to have included estates that are almost complete. This week, the local newspaper in my home town reported that residents of Madeira Grove are up in arms because their estate has been described as a ghost estate. I understand there are 200 families living in the practically finished estate and its residents are very happy with the contractor.

Local authorities are having great difficulty drawing down bonds which were paid over by builders who have since gone bust. Wexford County Council is experiencing serious difficulty as it seeks to draw down bonds to complete estates in Enniscorthy and throughout the county. Some of the bonds are held by insurance companies which are making it difficult for county councils to access the money. As a result, roads in estates are not being finished and local authorities are trying to find moneys they do not have to try to complete estates in the interests of residents. The issue of bonds, including the amounts involved and the ability to draw them down to enable local residents to have their estates finished, must be addressed.

I welcome the Bill. It replaces the current system for regulating auctioneers and house agents which is operated by the District Court with an updated system to be operated by a new statutory body, the property services regulatory authority. I ask the Minister to signal which type of individuals he intends to appoint to the new authority. Will they be professionals, people with a legal background or individuals with common sense? Sometimes the professionals appointed to State boards and bodies do not have much common sense. It is important that the appointees have experience of property services and the manner in which bodies of this nature should operate. I ask the Minister to comment.

The Bill also provides for improved consumer protection by establishing a system for investigating and adjudicating on complaints relating to the provision of property services and a property services compensation fund. While these are important developments, many existing bodies take too long to investigate and adjudicate on complaints. The Minister should impose time limits on the investigation of complaints. Some of the departmental bodies with which I deal are slow and cumbersome and people usually become tired waiting for investigations to conclude and compensation to be paid. Time constraints are necessary for this reason.

The legislation extends the licensing system to property management agents and extends statutory safeguards to the clients of such agents. It is an important element in the Government's strategy to address problems arising from the management and governance of multi-unit developments, which are another important area. The main functions of the property services regulatory authority will be to operate a comprehensive licensing system, set and enforce standards, establish and administer a system of investigation, promote increased consumer awareness and protection and establish, maintain and administer the property services compensation fund. These are all worthwhile and laudable functions and it is important that the authority is established as quickly as possible.

I ask the Minister to address the issues Deputies have raised. We must ensure there is no repeat of the mistakes of the past. I refer to the proliferation of mortgage broker companies which quickly went out of business, the practice of gazumping and the continuous increase in rents. Even now, while some commercial and residential rents have decreased, other landlords are trying to buck the system by maintaining rents at high levels or increasing them. This is an area of concern.

I welcome the Bill and hope it will pass all Stages quickly. I also hope the Minister will accept some of the suggestions and amendments that will be proposed, as he signalled he will.


Sahar Croughan
Posted on 29 Nov 2010 8:58 pm (Report this comment)

This a clarion cry to middle-class professional wealthy voters; of All stipes ?
1. 'the previous proliferation of (new) auctioneers; now ceased'.
What is he talking about? I'm only a tenant; but it is obvious that these newly licensed (young) auctioneers, who are now out of business - a main reason might be because they did NOT OWN FREEHOLD of their premises and when business diminished, could not pay the Lease RENT: whereas Mr. Browne's "long-term auctioneers, who have always been Part and Parcel of the town" OWN THEIR OWN BUILDINGS - and so stay in 'businesses' THAT MAKE NO ACTUAL PROFIT. ? Yet, Mr. Browns attributes these as Better than the newer (and younger?) ones.
Anyhow, as a tenant, I don't like ANY of them.

2. About this new 'Property Services Regulatory Authority' which will administer rules about Management and Governance of multi-unit developments.
This should be balanced to the tenants? But will it be? Or just a route for fat-cat investors to avoid paying solicitor's fees; by accessing a tax-payer paid Quango ?

There is a truly evil shift in this country? to a massive bloc of easy-got money Investors, who now intrinsically believe themselves the new 'LORDS'.

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