Despite new regulation of estate agents, the basic rule will still apply for vendors and purchasers alike, – ‘if you snooze, you lose’

IN ONE OF the early acts of his presidency, Michael D Higgins signed into law at the end of 2011 major reforms of the estate agency industry and how estate agents must, and must not, go about selling properties.

The new law was first proposed almost eight years ago, in 2004, by former minister for justice Michael McDowell. A tired and frustrated public has almost given up on it ever happening.

So, at last, the Property Services (Regulation) Act 2011 is now the law, but the wait still goes on. We are now waiting for what are called commencement orders to be signed by Minister for Justice Alan Shatter to activate the various parts of the new law.

This will only be done when the members of the Property Services Regulatory Authority are appointed. “Applications are being assessed,” according to the Department of Justice. No time frame is given.

In the meantime, it might be interesting to look at some practices of estate agents and ask whether they will be consigned to history. In five cases it’s YES; in five cases it’s NO.

You make an offer on a house that is long on the market and, within a few days, the estate agent tells you that there is another offer in and it’s €20,000 above yours. You are frustrated and feel entitled to know whether there is really another bidder, while the estate agent is entitled to be beyond unproven suspicions. An end to suspected “phantom” offers? YES

Estate agents’ fees to vendors are given as a percentage of the sale price. Will the fees be clearly laid out, not just in small percentage terms, but in real actual figures? YES

Some would-be buyers are suspected by estate agents of abusing the booking deposit system which is based on trust. Booking deposits are always refundable. Can the new law provide for conditions to be imposed on the return of booking deposits? YES

You are told that “we are guiding €250,000 on that property”. What you are not told is that the vendor is really looking for a minimum of €300,000. Under the new law, the advised market value (AMV) to the purchasers must not be less than the advised figure given to the vendor. No more double-speak. YES

You are selling your property and realise that your estate agent is also arranging the purchaser’s mortgage finance. You have a sense that it is not entirely proper and that you should have been asked was it okay. Now you will be. YES

The duty of estate agents is to get the best possible price for a property, without withholding information from hopeful purchasers. This duty to the vendors prevents them from actively alerting would-be buyers to problems. Estate agents have bemoaned their obligations in this regard. Has anything changed? NO

Puffing up properties is something of a tradition in Ireland. But most people do not believe that they will be walking around, stunned by a semi-detached in Templeogue or that a small garden in Dublin 3 is really sun-drenched in the middle of February. Will this change? NO

Large and bold ‘Sold’ signs are often left outside a property for an unnecessarily long period of time, sometimes until the purchaser or the neighbours insist that it be taken down immediately. A change? NO

What about the practice of packing viewers of a property for sale together at a public viewing and giving the impression of huge interest in it. Any change? NO

Carefully releasing new properties on the market in phases to suit the developer was, in the boom years, regarded by some as manipulating the market. The then Fine Gael spokesman on Justice, Alan Shatter, called for an inquiry into such behaviour. Has it happened? NO

Many estate agents say that they welcome the new rules and that clarity of standards and what is acceptable behaviour is long overdue.

Complaints can already be made to the Property Services Regulation Authority, but until it has legal status under the Act, only against estate agents who have voluntarily signed up to the authority’s code of practice.

The new law is expected to hugely help the Irish property market to operate fairly and transparently. Official vigilance, long absent, should help. But for vendors and purchasers alike, the basic rule will still apply – “if you snooze, you lose”.

Pat Igoe is a solicitor in Blackrock, Co Dublin