Michael Ahern (Cork East, Fianna Fail)

I am glad to have an opportunity to contribute to the debate. I was involved in the regulation business for a while, especially in the context of company law and accountancy. My experience was that self-regulation does not work. It does not work in the accountancy industry or the legal system where changes are being made slowly. Hopefully, those involved will get to it one of these days. The Medical Council, for example, felt it was able to look after its members but it has brought in non-medical administrators. It is important, therefore, to have outside regulation. Without regulation in society, it would be chaotic.

Regulation has many meanings but the simplest is "the controlling of human or societal behaviours by rules or restrictions". It can take the form of legal restrictions, self-regulation through trade associations, social norms within a community and so on. Regulation mandated by a state tends to produce outcomes that might not otherwise occur, to produce or prevent outcomes in different places as to what might otherwise occur or to produce or prevent outcomes in different timescales from what would otherwise occur. Regulations are justified for a variety of reasons such as the possibility of market failures, the risk of monopolies, to ensure there is a collective action for the common good, lack of information and unforeseen externalisations. There are many reasons regulation should be brought about.

The property service business is broad and it can have a serious impact on those who take advice from property professionals such as auctioneers, estate agents, management agents or letting agents. When people deal with them, mostly in regard to the purchase of houses, they are usually making the biggest financial deal in their lives and there is a need for total and utter confidence and trust in those providing the information. For many years, service providers were self-educated but in this day and age that is not sufficient. There must be an education standard and training systems and the standards and systems must be regulated by a competent body recognised by the State. They must be up to scratch to address what is needed in society.

Two organisations, the IPAV and IAVI, dominate the industry. These agencies recognised it was necessary to amend the 1947 regulations to make them relevant to the modern era. A review group conducted a study, which made 42 recommendations to the Department. This Bill has taken on board many of the key recommendations. The group has done a great service to the industry but, most especially, to the nation. It has recognised that the system cannot continue to exist as it has because it has not been fit for purpose and it is still clinging to the set up of 60 years ago. In the accountancy profession, practitioners can put a plaque on their wall stating they are an accountant or adviser without having experience or training. I pursued this issue to ensure this would not be allowed and this should also apply to auctioneers and estate agents. They must obtain a licence and must do the necessary training because property services is a vital industry, as people must take advice from those who sell property.

The improvement of consumer protection, systems for investigating and adjudicating on complaints and the establishment of a property service compensation fund are provided for in the Bill. The fund will compensate those who suffer financial loss as a result of dishonesty on the part of property service providers. Every business should be required to have insurance. Many have but some do not and they will be required to do so in order that they can obtain a licence. It is necessary to ensure those who are not licensed will be prevented from remaining in the industry.

For some time and, especially over the past ten to 15 years, the number of management companies and agencies has mushroomed, especially in multi-unit developments. The extension of the licensing system to property management agents and the statutory safeguard for the clients of such agents is an important element of the legislation and the Department's efforts to deal with problems that have arisen in this regard on housing estates and in multi-unit developments. It is causing severe problems for home owners and it is important that the issue be addressed. I am glad it has been included in the Bill.

I refer to the issue of deposit retention, which has been highlighted over the past few weeks. The Union of Students In Ireland, USI, has stated that more than 40% of students who responded to a survey stated their deposits had been withheld by landlords at the end of term without any reason being given. I have been contacted by a number of tenants at my clinics who complained that their deposits had been withheld after they had moved out of a property. Without going to court, it is difficult to get landlords to hand over the deposits, as they give many excuses as to why they should not. The deposits should be held by a third party and if damage is done, it should be assessed by an independent body and the cost of the repairs taken from the deposit. That needs urgent attention.

The Bill is progressive, timely, it will help improve trust and confidence in the property services business and it will protect the customer from those who are out to scam them. I welcome the Bill and wish it a speedy passage through the House.

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