Helen McEntee (Meath East, Fine Gael) | Oireachtas source

I thank Deputy MacSharry for putting forward the Bill and allowing me an opportunity to set out the Government's position on it. The Government will not oppose the Bill. In fact, I welcome the objectives behind it to improve efficiency and reduce costs in the process of buying and selling property, which are certainly commendable goals we all share and want to achieve. Indeed, the Government and I, as Minister, continue to take major initiatives to address the need for fundamental reform and greater efficiency in our property law and conveyancing practices. To take just a few examples, there are key legislative and policy developments, such as the Land and Conveyancing Law Reform Acts 2009 to 2021, inclusive, which have greatly reformed and modernised property law and simplified conveyancing practice. Second, the Tailte Éireann Act 2022 consolidated the mandatory nationwide registration of property within property valuation, mapping and surveying functions in a single State body, Tailte Éireann, from March 2023. A total of 90% of property titles nationally are now registered, which greatly simplifies the future conveyancing of that property. Third, there was a report to examine whether the proposed introduction of a new profession of conveyancer, or the greater use of digital technology, could reduce overall conveyancing delays and costs. I look forward to receiving that report from the Legal Services Regulatory Authority, which is expected in the coming weeks.

Despite these considerable achievements, we all acknowledge remaining delays and costs in many property sales are still a problem and that further progress is needed. The objectives behind the Bill, therefore, merit further recommendation and examination. The core intention of the Bill is to propose a new statutory obligation whereby, when a seller wishes to put a property up for sale, they must first supply a seller's legal pack. This pack must then be made available to all potential buyers and advertised as part of the sale. The Bill suggests that introducing this pack will reduce conveyancing delays and costs by front-loading the production of key documents on the property being put up for sale. It also suggests the pack will ultimately reduce the number of sales that fall through.

Nevertheless, it is important to outline where we have identified challenges and difficulties with the Bill to see how we can work through them and to learn about mistakes that have been made in other jurisdictions. There is a risk the Bill as drafted could lead to increased conveyancing costs and delays and even reduce the supply of properties coming onto the market, so it is important we take the opportunity during this debate to highlight a number of issues that have been identified and will need to be considered further both by Deputy MacSharry and by the Oireachtas joint committee as it carries out post-Second Stage scrutiny.

First, and as I have mentioned, other jurisdictions have not necessarily had positive experiences with sellers' legal packs. A similar pack was introduced in England and Wales in 2007, but had to be suspended in 2010. The government concluded that the pack had added to rather than reduced conveyancing costs and delays. We should bear that experience in mind when seeking to introduce something similar here. Second, the Bill could lead to additional costs being placed on sellers, but may not realise corresponding savings for buyers. For example, compiling the minimum mandatory documents required for the legal pack under section 3(1) will incur significant up-front expense before a property is brought to market or any potential purchaser is in view. As we have heard from the Deputy, section 5 requires that each document in the pack as compiled to be less than 12 months old. These minimum documents have to be obtained from multiple sources, most of which charge their fees. The risk is that if a sale falls through, or no serious purchaser appears, that these will be sunken costs. Some sellers, in particular those trading up or in financial difficulties, and some executor sales may not have money available to meet these up-front costs. In addition, buyers and their lenders need any of the mandatory documents that are time sensitive to be up to date when the sale is closed. Again, the seller risks having to update those documents for closing and applicable fees will potentially need to be paid again. We will have to look at the timeline or whether there is a way of expanding that. Sellers will also incur extra legal fees. Currently, their solicitors only have to deal with queries about title from one buyer who has gone sale agreed, and paid a booking deposit. However, the Bill requires the legal pack to be advertised much earlier, and to all potential buyers. The seller's solicitor would have to deal with queries from multiple potential buyers, which would potentially increase their workload and their fees in turn. Sellers' costs would also increase because the Bill requires the seller to provide a range of searches against the property for the legal pack. Searches are expensive and this again would require sellers to duplicate costs that are currently carried out by buyers. Buyers and their lenders will still prefer to rely on their own searches, which run right up to the closing date.

Third, it would be important to ensure that the Bill would not add delays to the conveyancing process. For instance, under the Bill the property cannot be placed on the market until the pack is ready. However, some of the documents required under section 3(1) can take weeks or months to obtain. In England, the experience was that the seller's pack was delaying properties getting on the market for sale. Section 3(3) states that the pack shall not include documents other than those listed in earlier subsections (1) and (2). I have been informed that the Law Society is concerned that this could lengthen the timeline for sales by forcing sellers to undertake preparation for sales in two phases - one for the mandatory documents under section 3(1) and the other for non-mandatory documents. This would run counter to the pre-contract investigation of title, PCIT, system introduced by the Law Society in 2019, which requires buyers and sellers to produce each required document at the most efficient point in the conveyancing process. This has greatly reduced delays between signing contracts and closing the sale. In addition, by limiting a seller's disclosure about the property to the information listed under section 3 of the Bill, the seller would not be meeting the obligations placed by lenders on the buyer's solicitor, who has to check the title thoroughly in order to provide his or her certificate of title on the property to the lender. This could cause wider legal difficulty so would have to be examined further.

Fourth, a number of stakeholders including the Law Society, Tailte Éireann and the Property Services Regulatory Authority have raised some technical concerns about the specific documents required for inclusion in the legal pack under section 3 of the Bill, including the minimum mandatory documents. It would be important that there be consultation with these different bodies. I also note that the Bill does not refer to a number of other key documents that would have to be provided and checked. These include Family Home Protection Act declarations for residential property, and detailed documentation under the Multi-Unit Developments Act 2011 for apartments such as fire safety documents and other further specialised documentation for agricultural or perhaps commercial properties.

Finally, the Bill seeks to create new statutory obligations through the introduction of the seller's pack and identifies the protection of consumers and purchasers as one of its key objectives, but it does not envisage any independent enforcement mechanism. The issue of enforcement is again something that would require further consideration. I welcome again the objectives of the Bill, but I must also outline and underline the issues I believe would need to be examined and fully considered further as the Bill moves to Committee Stage where it risks not achieving its overall intended purpose, that is, to make things easier for people who want to buy and sell houses. It is clear that a number of practical and legal issues need to be addressed first. Before proceeding to Committee Stage, I strongly recommend that the Deputy, working closely with the Oireachtas joint committee, gives consideration to the issues I have outlined and that there would be consultation with the various stakeholders. These steps would ensure that the Bill's potential objective could be realised effectively.

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