Thursday, 8 December 2005
Department of Justice, Equality and Law Reform
Question 192: To ask the Minister for Justice, Equality and Law Reform his views on correspondence (details supplied); the steps he is taking to prevent this form of gazumping; and if he will make a statement on the matter. [38559/05]
I commissioned the auctioneering and estate agency review group in July 2004 to examine the future licensing and regulatory requirements of property practitioners against a background of serious public concern about certain selling practices in the property industry. When the group invited submissions from the public about its work, experiences similar to those detailed with this question were among the complaints received. The group's report of July 2005 made a number of recommendations aimed at protecting consumers from practices like gazumping. It noted that it is sellers who gazump and barring any changes to the law of contract, it will always be the right of individual sellers to raise or lower their price demands or to withdraw their property from sale. It will always be the right of buyers to reduce purchase offers or to back away from a purchase until the point at which contracts have been signed and exchanged. In its Report on Gazumping, the Law Reform Commission, after extensive examination of the issue, concluded that "the only practicable reforms are to take steps to inform buyers, and in that way, to protect them". The group noted that a problem arises if a developer who has accepted a large number of deposits pulls out of the sale at a later stage to relaunch the scheme at a higher price. The group described that practice as reprehensible and argued that it should cease. It recommended that all builders and developers should stand over conditionally agreed sale prices. It cited the home purchase protection pledge issued by members of the Irish Home Builders' Association as a model for appropriate behaviour between buyer and seller that should be enforced throughout the sector.
I am taking steps, with the approval of the Government, to establish a new regulatory authority that will assume responsibility for the licensing and regulation of all auctioneering, estate agency, property letting and property management service providers. The new authority will not be responsible for regulating the behaviour of builders and developers, but it will have a consumer information function aimed at ensuring that consumers entering into contracts such as that described in the Deputy's question understand the rights and entitlements, or otherwise, which are conferred on each party by the payment of a deposit. If an auctioneer is acting as an agent in such transactions, it is intended that the regulatory authority will have an oversight function relating to the services he or she provides. It will also make a complaints mechanism available to people who have not achieved satisfaction through existing mechanisms. It is further intended that the regulatory authority will develop contacts with other regulatory and representative bodies, such as the Construction Industry Federation, to encourage the development of the fullest possible protection for consumers in this area.