The Government intends to refer the legal issues surrounding the issue of "gazumping" to the Law Reform Commission, following the failure of a civil action taken by a young Co Kildare couple against a developer who increased the price of a house by £20,000 after accepting a deposit.
At Naas Circuit Court yesterday, Judge Jacqueline Linnane dismissed a civil case against Greenhills Construction Ltd and Loughlion Developments Ltd.
Stephen and Annette Butler, O'Higgins Terrace, Curragh Camp, took the action over a house at the Curragh Plains, Kildare town.
The Minister for the Environment, Mr Dempsey, said he had raised the issue of "undesirable market practices" with the Irish Home Builders' Association and its response had been "very positive".
A spokesman for the association said it would introduce a voluntary code of practice aimed at protecting both potential purchasers and builders.
The Fine Gael spokesman on housing, Mr Brian Hayes, has called on the Government to legislate urgently to protect young couples being gazumped by developers.
In court yesterday Judge Linnane said she agreed with a High Court decision taken by Mr Justice McCracken in a similar case in which he stated that though he did not morally agree with the action, legally the defendant was entitled to do what he did. Judge Linnane ruled that the Butlers did not have a binding contract with the builder. A booking deposit did not constitute an agreement, she said.
The couple paid a £1,000 booking deposit on a three-bedroomed semi-detached house on September 12th, 1997. The site foreman, Mr Tom O'Doherty, issued a receipt and marked the site sold on the plans.
Mrs Butler asked him to confirm the house would be sold at £69,900. Mr O'Doherty wrote "House price £69,900 - fixed" on the receipt, which also contained the phrase "Subject to Contract". It was only when the contracts were issued to the plaintiffs' solicitors, Boyce Burns & Co, the following May that the couple discovered the price had risen by £20,000 to £89,900.