Dáil debates

Wednesday, 10 November 2010

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


Question again proposed: "That the Bill be now read a Second Time."

12:00 pm

Photo of James BannonJames Bannon (Longford-Westmeath, Fine Gael)
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Is the Minister of State at the Department of Enterprise, Trade and Innovation, Deputy Calleary, taking the debate?

Photo of Dara CallearyDara Calleary (Minister of State with special responsibility for Public Service Transformation and Labour Affairs, Department of Enterprise, Trade and Employment; Minister of State, Department of An Taoiseach; Minister of State, Department of Finance; Mayo, Fianna Fail)
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I am here to listen to the Deputy's every word.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Deputy Bannon only has four minutes and I am afraid the time is passing.

Photo of James BannonJames Bannon (Longford-Westmeath, Fine Gael)
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I concluded last night on the spectre of ghost estates, which are a blight on the landscape and a reminder that the Government is out of control and lacking accountability. Many suggestions have been made regarding what should be done with these estates, as well as the politicians and developers who were driven to such excesses of greed. On a positive note, I ask the Government to consider offering an incentive to returning emigrants. Many of those who left the country in the 1980s now want to return to their places of birth. Perhaps a pilot scheme could be introduced in counties Longford, Westmeath, Roscommon and Leitrim involving stamp duty exemptions for a period of six months in order to encourage people to move from cities and towns, as opposed to the reverse.

Tax breaks for returning emigrants could also provide a much needed boost to rural economies. I am familiar with an individual who emigrated to England in the 1950s or 1960s and who returns on a weekly basis to a small cottage he purchased in my parish. Two of his family members have also returned to the parish and they now commute to London. At weekends and holidays, they spend their money in the local economy. I am sure this example is replicated in many other areas and it should be encouraged across the country. In my constituency of Longford-Westmeath, where the number of vacant housing units is larger than in other parts of the country, my proposal could result in a win-win situation for everybody.

Nobody wants to see ghost estates deteriorating to the point where the broken window theory becomes a living nightmare. If we do not do something, the graffiti and broken windows of today will become the crime and devastation of a virtual war zone tomorrow. Unless it intends to raze vacant housing units, the Government must be innovative in making good its mistakes.

Section 75(5)(a) of the Bill provides for the establishment of a compensation fund containing a minimum of €5 million by the end of a four year period. I am concerned about the undue financial burden this fund may have on some practitioners if it is not considered carefully. Given that no more than €150,000 has been paid out over the past 25 years as a result of malpractice by agents, the amount appears unduly large.

I welcome the provisions on insurance. The IAVI, which also welcomes these provisions, has pointed out that its members already comply with insurance industry standards on the control of their clients' money. While the Bill contains these and other welcome provisions, I hope the Government will take on board my party's amendments.

Photo of M J NolanM J Nolan (Carlow-Kilkenny, Fianna Fail)
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I join previous speakers in welcoming the Property Services (Regulation) Bill 2009. Several years ago, I raised the issue of property services in the context of the debate on a Finance Bill. One of the difficulties in dealing with compelling Bills such as this is the slow and cumbersome procedures that must be followed to enact them. With advances in information technology, we should be able to find quicker ways of progressing urgent legislation through the Houses.

The Auctioneers and House Agents Act 1947, which is the principal legislation regulating the operations of auctioneers, was amended on only two occasions since it was enacted. The Bill before us has the support of the representative bodies for auctioneers and estate agents and it is only right that the public can expect improved policing and legislative support in the area of property and commercial sales.

During the boom, there was a significant increase in the number of individuals and companies managing housing and commercial developments but the laws on regulating them were sketchy. On a number of occasions, I became aware of cases in which individuals felt malpractice was taking place. They did not think their interests were being adequately addressed by these companies or individuals. They complained that no redress system was in place. I am pleased that this legislation covers that shortcoming by putting in place a redress system for those who have been at the wrong end of a deal in one way or another. The people I mentioned were also worried that no disciplinary procedure was in place for companies or individuals who were found guilty of wrongdoing.

Given that the Auctioneers and House Agents Act 1947 is outdated, as I have said, I am pleased that the Minister has taken on board most of the recommendations in the report on the regulation of the auctioneering profession, which was submitted to him by the auctioneering bodies some time ago. It is important that the bodies have welcomed this legislation. As the residential and commercial property sector is a vital part of our economy, it is important we have confidence in it.

There are over 1.5 million residential properties in the State. While the property market is flat, young people and first-time buyers, in particular, continue to have an opportunity to get into the market. They need to be protected by this legislation, which I hope will get a speedy passage through this House. It has already been passed by the Seanad. It is important that young people should have confidence in the legislation.

I was pleased to note that the Minister confirmed on Second Stage that he is prepared to take amendments. Some shortcomings in the Bill have been identified since its publication, for example, during the debate in the Seanad. The Minister has said he is prepared to accept amendments to the Bill.

The protection of clients' money in our existing legislation is inadequate. This area was crying out for reform change, but it is now covered in the Bill before the House. The regulatory authority will licence and control all entities providing auctioneering and estate agency services. The State should have had a more hands-on approach to this matter in the past. Thankfully, it now recognises the shortcomings in this regard and is taking action to remedy them.

Auctioneers and estate agents also need some protection. They will all have to be licensed now. The new regulatory authority will have significant control over the regulation of estate agents and auctioneers. The Bill before the House quite rightly also makes provision for an appeals structure. It provides for the establishment of a property services appeals board. Companies and individuals that have been refused licences under this legislation will have the right to appeal to the board. This will also apply to companies that previously held licences which were not renewed.

Other Deputies have spoken during this debate about ghost estates, which are causing problems throughout the country at present. Many auctioneering companies have been mandated to look after such estates. The accounts of many of the developers involved in ghost estates have been sent to the National Asset Management Agency, which therefore also has an interest in the matter. Those who propose to buy unfinished or completed houses in ghost estates need to be protected. The Property Services (Regulation) Bill 2009 will give them some form of protection.

Many individuals, particularly in the commercial area, are concerned about agreements in leases which provide that in many cases, rents may only be amended upwards after between five and ten years. This is wrong. It is causing hardship for companies and commercial operators, particularly in shopping centres. The problem seems to relate primarily to developers who built shopping centres, agreed leases with upward-only rent reviews and then developed other shopping centres which were not as successful. As a result, individual tenants and leaseholders in many of the existing shopping centres are having to pay for the mistakes of developers who over-stretched themselves in other areas. This is wrong. If this economy is to recover - I am confident that it will - we need to seriously examine our cost base. We have spoken about the need to reduce unit costs and become more competitive. This area needs to be considered in that context.

Over the last two years, perhaps because of the economic downturn, we have succeeded in ensuring our cost base has stabilised and fallen. We are becoming more competitive and starting to attract renewed interest from overseas direct investors. They are once more starting to see Ireland as a good country in which to invest. They know we have a competitive cost base. They can export competitively from here. However, the Government still needs to deal with the whole question of upward-only rent reviews. I am unsure whether legislation can be enacted to outlaw that arrangement. It is something we will have to look at. I ask the Minister to examine what can be done in the context of other legislation, if not this legislation.

The basis of this legislation - the Property Services (Regulation) Bill 2009 - is the control and supervision of the property services market. It is important that the definition of a "property service" is identified in section 2 of the legislation as:

(a) the auction of property other than land,

(b) the purchase or sale, by whatever means, of land,

(c) the letting of land .... or

(d) property management services

Anybody who is involved in such business will need a licence issued by the new National Property Services Regulatory Authority. The main functions of the authority will be to operate a comprehensive licensing system, covering auctioneers, letting agents and property management agents; and to set and enforce standards for the granting of licences. In other words, those working in this sector will need to have certain education and training standards in order to operate professionally. The authority will ensure licensees have cover for professional indemnity and, importantly, observe certain standards in the provision of services. It will ensure such people have experience in the areas of auctioneering and estate agency. The authority will have to promote increased consumer protection and public awareness of property services in general. It will make sure that details of the cost to the consumer are available. It should be possible for customers to tell whether service providers are licensed.

During the good times of the past, there was a close relationship between bankers, auctioneers, solicitors and developers. While this was fine when the market was growing strongly, many individuals are suffering badly today as a result of the unprofessional advice on the property market they received from a number of sectors. I am aware many individuals who were comfortable financially and who were advised wrongly that they should borrow more than was good for them and get into the property market, something about which they knew little, and they are now suffering as a result.

I welcome the Bill and I hope it has a speedy passage through the House because we need this legislation on the Statute Book quickly.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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I welcome this comprehensive Bill which is ambitious in so far as its sets out to control and supervise persons involved in property services and to improve standards. The vast majority of those engaged in the property industry such as estate agents and auctioneers and others who provided services were reputable and carried out their work in a professional way but, at the same time, others got involved when it was profitable and lucrative to do so and they generated a lucrative income. I would like to highlight the need for transparency, which is provided for in the legislation.

Everyone knows that in the past irregularities occurred in private treaty sales. Purchasers were misled in many instances and they had to pay much higher prices. This applied not only to homes, but also to land, leases and rental accommodation. I welcome very much the fact that we will have transparency. However, I must question how this will be guaranteed. The Minister will establish the authority and an appeals mechanism will be established but he must give a forceful indication that past practices will be consigned to history and will never happen again. A few years ago, gazumping was an issue. What happened in those cases? If one went into an auctioneer to purchase a property and asked for a day or a week to consider buying it, sometimes within hours, not days or weeks, the price had increased without any justification. It was unfair to many young people and that is why many young couples have mortgages they are unable to afford. They are having to default, which is a terrible tragedy. The finger of blame must be pointed at auctioneers and estate agents, particularly for their role in the early part of the boom in the construction industry. I hope the Minister will clearly identify this issue and insist that the authority makes all transactions transparent.

Departments are also to blame. Two years ago I identified a scandal in which the Department of Agriculture, Fisheries and Food had been knowingly ripped off on a lease in Galway for an office block to deliver services to farmers in the west. It has taken me the best part of two years to get 60% of the story through parliamentary questions. It is like torture extracting information about whether the need for a premises was advertised by the Department and whether there was a fair competition among all those who had premises to lease or if it was an insider job. I am beginning to believe it was, having seen the names of the owners of the office block that is being used. One of them works for Anglo Irish Bank and the other for Allied Irish Banks. To add insult to injury, as Deputy Nolan said, they were retrospectively granted another two years on the lease, which is unbelievable. Given the times we were living in, that may have worked but, sadly, the amount wasted by the Department in acquiring that property was unbelievable. It acquired facilities far in excess of its needs and that should not have happened. I hope the Minister of State will bring this to the attention of the Minister for Justice and Law Reform to ensure a similar scenario does not arise again. Other new office blocks were available and the Department was ripped off in this instance. There was no transparency, sadly, even on the part of the Department. It is one thing for auctioneers and estate agents to conceal details but I have not been able to find out whether the lease was advertised or if an open competition took place. There has been no indication that it was open and I have never been granted information in this regard.

The Bill intends to provide for a central body to control and supervise the industry. I do not know where it will be located but, initially, the authority will comprise 11 members, some of whom will work part-time. At this stage, I would have expected us to have moved on from the days when a Minister made all the appointments to such a body. This authority will probably be one of most important established this decade, given its responsibilities following what happened with regard to property sales. The Minister says the authority will be independent and I will take his word for it, but if he appoints all the members based on their experience, education and qualifications, he will leave the door open to criticism about its independence. How independent can an authority be? I do not know how the Minister can justify the authority and the appeals mechanism. Who will be appointed to oversee the appeals mechanism? How independent will they be?

There is an appeals mechanism in the Department of Agriculture, Fisheries and Food and when people are not satisfied with the outcome of an appeal, they then take their case to other departmental officials. How can an official be expected to give a biased decision against one of his own colleagues? That does not happen and that is why the appeals mechanism provided for in this legislation must be independent and it must have the teeth and power to make decisions, irrespective of the membership of the authority since their decisions will be under appeal.

It is important there be a change from the old mechanism of granting auctioneering licences and estate agents' licences. Any person who has been in court on the day auctioneering licences have been renewed would be aware that luckily officials from the Revenue Commissioners would be present to provide information that the applicant seeking a licence renewal was held in good financial standing at that given time and then the solicitor representing the applicant would deliver further information to the court. It seems the process was a rubber-stamp exercise. With no disrespect to the courts, many applicants got through the net in those instances who because of their previous records should not have gotten through. There was no authority in place to monitor standards and decide that X, Y or Z was not entitled to a licence. I do not know the number of licence applications by auctioneers and others that have been refused by the courts other than in circumstances where outrageous decisions were made by those people.

Now that the Minister has arrived, I note he proposes to appoint 11 members to the authority and that he will select them. I presume he will do so on the basis of experience. Will those people be required to be dissociated or not tied in any way to auctioneering businesses or to the sales area? People in many of the agencies in this area previously would have been closely identified with the auctioneering business; I refer to people the Minister could identify in this respect but I am not saying he identified them in the past. It is important the Minister dissociates himself from that and gets the best professional people available who can make judgments, supervise and exercise control over auctioneers applying for licences. It is important that licences be granted by the authority.

I was surprised to learn that an interim body which does not have statutory powers has been in place. Will the Minister advise the House what work it has done to date? Did it monitor, supervise or control any aspect of the auctioneering business and the people and companies involved in it?

A difficulty has arisen in terms of what management boards are doing in certain areas. It is regrettable that many local authorities throughout the country for some reason best known to themselves, by accident or design, included in planning housing estates in small villages and towns, which proliferated throughout the country, as being under the remit of management bodies. Certainly in rural areas that has led to the collapse of sales. A purchaser would have approached an auctioneer and agreed a house sale and that case was then passed to the solicitor to deal with the legal end of transaction, but the solicitor would have immediately said "stop the lights" that he or she could not proceed with it because of the existence of the management company. Whether the management company represented the developer or a voluntary group, it did not make any difference to the purchaser but the fact that it was in place and was unnecessary led to the failure of many sales. Serious opposition to such management companies has been expressed by purchasers within an estate who did not want to be part of this set up because of the difficulties involved in it and no benefits derived from being part of it for the tenants or purchasers of houses in an estate, a flat complex or commercial premises.

Where management companies were in place in areas where commercial premises in County Galway were flooded during the bad weather last November and December, such companies could not be activated; they took no responsibility for the damage done in the first instance or for the fact that flooding occurred and damage was done to premises, property and installations and appliances within offices. That happened extensively and one would have to ask what is the role of such management companies. When the Minister next examines the Bill I hope he will note that some management groups and companies that were put in place may have been inadvertently included by planners not realising the outcome of their inclusion at a later date. I hope he will review that with a view to releasing or lifting such provision where it is agreed by the developer and or the tenants and purchasers of properties.

I welcome the Bill and what it seeks to achieve. Why is it the Minister's intention, by regulation, to stagger the implementation of the measures covering issues in the Bill? Why are all the measures not being included on a one-off basis? Has the Minister decided where the authority will be based? If it is to be based in a central location, how does he expect it to exercise control over and give advice to auctioneers as far north as Donegal and as far south as Kerry and to those located in places in between?

1:00 pm

Photo of John BrowneJohn Browne (Wexford, Fianna Fail)
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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.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Independent)
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I also welcome the Bill on which the House has waited for the best part of 13 years. We needed a property services regulatory authority in recent decades. That this legislation has arrived in the dying days of the Government provides a poor commentary on how government operates. We also had to wait for more than a decade for the Multi-unit Developments Bill, the second element of the overall legislation on the property sector, with which the House has finally begun to deal.

I raised issues related to these matters with the former Taoiseach, Deputy Bertie Ahern, on 60, 70 or 80 occasions. Deputies on this side were repeatedly informed that legislation was pending or being prepared. They went through a huge saga about the difficulties of preparing legislation on property management or sales because of the Constitution and that constitutional prohibitions made it nearly impossible to bring forward legislation. The reality was that the landlord, auctioneer and estate agent sector of the economy was heavily involved in the Fianna Fáil Party. It was a core element of Fianna Fáil as it evolved in the 1980s and 1990s and the former Taoiseach, Deputy Bertie Ahern, had no intention of bringing in either legislative item on his watch. It is regrettable that Members have been obliged to wait for so long, that this has allowed a key element of the combustion that produced our current economic bankruptcy to take place and that the Government absolutely refused to bring forward necessary legislation. Now, the horse having bolted to some extent, the Government has come forward in its dying days with this key legislation.

In the period from the late 1990s until perhaps 18 months to two years ago, the Irish property market experienced a massive explosion in prices. Much of that explosion was ruthlessly driven by estate agents, auctioneers and landlords. They ruthlessly and without the slightest sense of decency or feeling for those who were homeless or who needed accommodation, sucked the marrow from the bone. They ruthlessly chased every euro that could be had. In my own constituency, the arrival of the Sherry FitzGerald auctioneering company suddenly led to an amazing explosion in, and doubling of, prices. The prices increased week after week by €5,000 or €10,000 and each time one read a property supplement, a new price increase was evident.

The Government of which the Minister, Deputy Dermot Ahern, is a member simply stood there watching this happen and refused to take action. For example, it knew that gazumping was widespread and that some auctioneers were representing both the buyer and the seller against all principles of proper legal administration. The Government knew the building regulations had been abandoned to self-regulation. Consequently, young couples in particular who were forming households could not get key information on the structures for which they were paying perhaps €300,000 to €500,000 and on which they took out crucifying and back-breaking mortgages of €300,000 to €400,000, which they would be obliged to try to pay back. The Government allowed all this to take place over those years in a most disgraceful fashion. Finally, now that the market has collapsed and even some auctioneering and estate agent companies have gone out of business, the Government is introducing what I agree is a commendable property regulatory authority.

In addition, a huge role was played in this disaster by the national newspapers and in particular by the Independent group and The Irish Times. Each Thursday and Friday witnessed the astonishing sight of these two national newspapers producing a property supplement that was bigger than the actual newspaper itself. This was taken for granted each Thursday and Friday week after week and month after month. Moreover, these so-called property supplements contained articles that presumably were written by workers who regarded themselves as journalists. However, they were incredible puff pieces and peaens of praise to estates built in the middle of nowhere or with no services or with no public transport. This took place week after week. Approximately one year ago, I asked Professor John Horgan whether he would investigate the role of the aforementioned two national newspapers in particular in fanning the flames of the gazumping and the disaster in the auctioneering profession. He of course replied that this was not a matter for the Press Ombudsman as it was not part of its remit to investigate such matters and that it could not be done. I note Members are being lectured on a daily basis by journalists, who worked for those two organisations, about the economy and on how the country will get through the next year.

Photo of Dermot AhernDermot Ahern (Minister, Department of Justice, Equality and Law Reform; Louth, Fianna Fail)
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Hear, hear. Absolutely.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Independent)
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However, with one or two exceptions, the same journalists have hardly ever mentioned that their colleagues and the owners of their newspapers played a huge role in what has come to pass with the effective collapse of our fiscal position. This point must be noted and should be examined because either there is journalism or there is not. Journalism should be about giving the real facts about, for example, a housing development. It should ask whether it is a good housing development, whether it is well built or whether it could contain defective materials. However, there was no such investigation. People looked the other way but now, while Members try to pick up the pieces, some of those who were around in those days and who wrote on national politics and issues claim it had nothing to do with them. Nevertheless, it played a huge role in fanning the flames of what happened in the auctioneering profession. While this matter still requires examination, I welcome the belated beginning of the process to establish a property services regulatory authority.

I note that my colleague, Deputy Rabbitte, drew attention to the authority in the context of the exact manner in which the elimination of anti-competitive practices will be pursued in the future and I presume the regulator will have the final say in this regard. The Minister should return to the issue of how to ensure the prevention of a happy cartel of three or four auctioneering firms in a particular locality that decide what should be the price levels. The Minister must tease out this issue of anti-competitive practices in his response to the debate on the Bill in this House although I acknowledge it has passed through the Seanad.

In addition, the dearth of information has been a key problem for purchasers or renters of homes over the years. Again, the Minister should respond with regard to rents and to house prices. In future, will a register of all property sales be in place? My understanding from a quick reading of the Bill is that this does not appear to be the case. However, it clearly is critical for ordinary citizens to establish market level prices. In particular, it will be critical for people trying to establish their first home to know the facts and to know what are the market prices. It should not be a big secret or something that can be created, as was the bubble by a group of auctioneers aided and abetted by various newspapers. Will such a clear register of all property transactions be put in place? Will there be a clear register of rents or must such a measure await implementation by the Labour Party in the next Government? This is a key element the Government has not addressed.

The Minister is aware that my constituency of Dublin North-East contains what essentially is a planned new city of perhaps 50,000 people or more, namely, the north fringe. Its territory extends across the entire north side of Dublin city from Finglas across to my constituency on the coast. At present, because of the problems to which I referred earlier, the future development of the north fringe is on a knife edge. Perhaps 20% to 25% of the planned homes have been built in some parts of the area, such as Clongriffin, Belmayne, Burnell and The Coast in Baldoyle. There are tracts of derelict land where there is some development on one side while in field after field the soil has been stripped off but the land left derelict. A range of services, such as a health centre and supermarket, was planned for the area but they have simply not happened.

We are still trying to chase some of the problems that have emerged in the development. Worst of all, this area was gravely affected by the pyrite disaster. Between 2000 and 2007, because there was no invigilation of building regulations, a large number of homes were damaged by in-fill containing too great a proportion of pyrite. For that reason, I welcome the fact that the beginnings of an agreement was arrived at yesterday in the Commercial Court between Menolly Homes and Lagan Construction regarding the remediation of, perhaps, 500 homes in Drynam Hall in Kinsealy, The Coast in Baldoyle and Beaupark in Clongriffin. I understand a fund of up to €40 million is being created and efforts will be made to liaise with the legal representatives of householders to reach a long-term agreement for the repair of those homes. It has been claimed - I said it myself in this House - that up to 20,000 housing units in the north fringe, Fingal, Meath, Louth and a large part of north Leinster may be affected by pyrite damage. This results from the lack of regulation by the Government during the property boom. The agreement is welcome. Thanks to the work of the High Court, we now have the beginnings of an agreement for the remediation of these 500 homes in the north fringe.

The great distress that householders in the north fringe have suffered takes us back to the business before the House today. At long last, we are trying to create a regulator for the property market. In The Coast in Baldoyle, there are apartment complexes for which the local authority refuses to give a fire certificate and in parts of the estates there is a range of other problems. Much of this can be traced back to the failure of the Government to bring forward the requisite legislation.

I welcome the Bill. We need to examine again the issues relating to competition, pricing and rental agreements. It is deplorable that it is only when the Government is past the 11th hour of its life that it is finally bringing in legislation to establish a reasonable and fair regulation of the property sector. It is better late than never but this is another area where the Government badly failed the country and another reason we need to have a new Government as soon as possible.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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I am glad to have an opportunity to speak on this legislation. I welcome its coming to the House, albeit after a very protracted gestation period. No subject will generate more discussion at the present time than this one.

The Building Control Act, which passed some years ago, was supposed to control, regulate and ensure development took place in an orderly fashion and that consumers and householders, whether renting or purchasing, were protected. Unfortunately, that did not happen. Nor does it happen yet. The economic circumstances that have overtaken the country make the position even worse for those concerned.

I will make one reference to the national house building guarantee scheme, which used to protect house owners. It is ineffective. With regard to the pyrite referred to by Deputy Broughan, it does not work beyond a certain point. People who have been affected by that plague are faced with the responsibility of rebuilding their houses from the ground up. In the 1980s, when we were less developed than at present, it was possible for the house building guarantee scheme to cover, in its entirety, any reconstruction work that had to take place in a house.

I was looking at some houses in my own constituency recently. Someone suggested that they did not need to be rebuilt because the side walls had been pushed out by only an inch and a half or thereabouts and that a little plaster or mortar would be sufficient. Unfortunately, that kind of nonsense only deludes us. We should not allow the public to be deluded and conned by that kind of nonsense.

I cannot believe that some of the things that happened during the boom period have gone unchallenged, with no recompense to the consumer. I cannot understand why properties were sold by agents of one kind or another to unsuspecting members of the public. Purchasers approached financial institutions seeking money to buy properties, having been assured by their legal representatives and estate agents that they were sound. The financial institutions asked only how much did the purchaser want. There was no limit on the sums being borrowed. The problems would then emerge. Perhaps a series of planning applications had been refused and planning permission was not possible. The purchaser was then stuck with a useless property. There are many cases of people who are stuck on landlocked sites or on land that, for one reason or another, is incapable of taking development. What happens? Nothing. Many of these cases have been in the courts. I have been to court on many occasions to see what was happening. This is appalling and the Minister must be aware of it.

I am not sure that any recompense is going to come to those people by way of this legislation. As sure as one door is closed someone will open another, find a loophole and do the same thing to a new group of unsuspecting people who have not been conned yet but who are just about to be.

The measures contained in the Bill are fine. The question is will they work and how soon will they address the issues to which other Members have already referred?

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.