Written answers

Wednesday, 30 April 2014

Department of Justice and Equality

House Prices

Photo of Terence FlanaganTerence Flanagan (Dublin North East, Independent)
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524. To ask the Minister for Justice and Equality his views on correspondence (details supplied) regarding property prices; and if he will make a statement on the matter. [18573/14]

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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The position is that the issue of gazumping was examined in detail by the Law Reform Commission in its 1999 "Report on Gazumping" (LRC 59-99). The Commission noted that the delay between the conclusion of negotiations and the payment of a booking deposit and, on the other hand, the making of a formal contract is usually in the purchaser's interest e.g. in order to arrange finance or to ascertain if there are legal difficulties. The Commission did not recommend any legislative changes to deal with this issue.

The issue was also considered by the Auctioneering/Estate Agency Review Group in its 2005 Report to the Minister for Justice, Equality and Law Reform. The Group noted that vendors will always have the right to raise or lower their asking price or to withdraw their property from sale, and for purchasers to reduce their offers or to withdraw from an intended purchase at any time before the contracts are signed by both parties. The Group agreed with the conclusion of the Law Reform Commission that ‘the only practicable reforms are to take steps to inform buyers and, in that way, to protect them’.

With regard to this recommendation, I understand that the Property Services Regulatory Authority in its “Guide for Users of Property Services Providers in Ireland", which is available on its website, explains the legal position relating to gazumping. In Part III of the Guide, the legal position relating to paying deposits and the signing of contracts is explained. In the circumstances, I have no plans to introduce legislation in this area.

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