Government assisting property rip-off - Sargent

[David Cochrane]

Green Party Leader Trevor Sargent TD has accused the Taoiseach and his Government of facilitating property rip-offs, by failing to regulate auctioneers, estate agents, management companies and developers.

Deputy Sargent said: "The excellent Primetime Investigates programme broadcast last night shows that the Government has been turning a blind eye to unethical, illegal and conspiratorial practices at the expense of ordinary buyers, sellers and occupiers of homes.

"The fact that the property industry is virtually unregulated and that the industry funds the main political parties is not a coincidence. The Taoiseach should come clean on how much Fianna Fáil has received from estate agents, auctioneers, management companies and developers in the past ten years.

[michael1965]

The program was a real shocker. I just couldn't believe what I was hearing. Well done to RTE for it.

More regulation is part of the answer, but in one significant area, it isn't. The program showed that mortgage brokers and estate agents illegally collude to get information about buyers, which they are not entitled to. This practice is widespread apparently, so what I want to know is, when are we going to see prosecutions (under the existing law) ?

Also, developer owned management companies are nothing less than a return to the feudal landlord system. I believe the practice is not allowed for new developments, but all existing companies need to be wound up and vested in the individual residents/owners.

[Munion]

Personally I believe that people should be given an option to sell and/or buy their house via a transparent purchasing/selling system that is run by a trusted & independent source.

Imo the various CoCo's throughout the country should establish an eBay type service whereby private citizens can register as users and once vetted for authenticity by the CoCo they can then buy or sell their house on it.

Have the available houses in that CoCo jurisdiction be searchable with each property having its own webpage listing giving full and honest details about the house. Viewings could be organised through the website too. People would be then able to bid on a house and each bid (and the reserve price) once confirmed would be visible to all via that site.

A nominal flat fee could be charged to the sellers by the CoCo to maintain the service.

I think a similar system already operates in Australia.

[cyberianpan]

The rallying call to arms of "more regulation" is a common one these days. I only caught some brief coverage of this & it would seem that existing data protection regulation was broken... could someone list the problems- I wouldn't surprise me if there existed regulation that already covers the breaches !

It reminds me of an issue I came across in my appartment block. My development was built by a family which now seems responsible for a few billion worth of development. This was their first big development & a lot of corners were cut, in particular on the finishing. However the plans clearly indicated that it met fire standards. There was a shared gas flue running up the side of each building, this was meant to- but didn't - have significant fire insulation around it as obviously this was a serious potential hazzard. When a structural engineer assesed an appartment pre-sale he discovered this, there was an immediate & hushed/rushed remediation across all blocks in the development. Needless to say an "after the fact" fix like this was very expensive & wouldn't have been done unless...

...this breached a number of codes & was a criminal issue. I researched the law on it & the operation and found out that the Fire Brigade would be the competent enforcement & prosecutory authority. When I contacted them they were only tangentally aware & didn't seem to have resources. Also it takes quite some expertise & positioning to mount a prosecution & I don't believe the Fire Brigade have this: yes had there been a diasaster the Gardai would've got involved & aided but that is not the point. Asking around there seems to be no site checks done for building code quality whatsoever (there are worker health & safety checks done). So if you are a large developer to keep economically viable you will have to cut corners.

FF are the builders party, they'll love skillfully kicking this into touch with some review group, much tut-tutting & tsking will go on. Then they'll implement something with no operational teeth.

cYp

[Sidewinder]

I only caught some brief coverage of this & it would seem that existing data protection regulation was broken... could someone list the problems- I wouldn't surprise me if there existed regulation that already covers the breaches !

Well, if you can't be bothered/don't have the time to watch it for yourself the main points were

EAs making up imaginary bids to force buyers into a bidding war against themselves

EAs using fake bidders in auctions for the same purpose

EAs, mortgage brokers etc actively colluding with one another so that EAs knew just how much of a mortgage buyers would get, and then using the tricks above to get them to up their bid to the maximum they could afford

EAs not having any requirement to tell buyers about any negatives - from structural faults to impending developments nearby

EAs actively working against sellers by sometimes accepting low offers just to churn the property quickly

Developers with a track record of shoddy building standards and leaving estates half-finished still getting planning permission and still building more crappy houses all over the country

The whole "management company" rip-off, the vague contracts, the unitemised charges, the blatant gouging, the failure to file accounts, the legal issues when it comes to selling a home in an estate/block run by a management company that is in trouble with the Companies office

Apparently, only the collusion was technically illegal as it is a breach of the Data Protection Act. Everything else is just hunky-dory in the Brave New Ireland.

[Catalpa]

From Breaking News:


"The Taoiseach should come clean on how much Fianna Fáil has received from estate agents, auctioneers, management companies and developers in the past ten years.

Trevor Sargent.

Like come on!

I had a little experience onthis myself last year while checking out a property for someone who wanted to rent it out. It was clear as day that the agent was lying straight off. In fact it was so blatent that their brass neck was an off putter right from the start. In the event we never proceeded in renting the property.

[Libero]

Apparently, only the collusion was technically illegal as it is a breach of the Data Protection Act. Everything else is just hunky-dory in the Brave New Ireland.

The good news is that the statement above isn't remotely true. (The bad news follows.)

Items 1 and 2 are criminal, being prima facie breaches of Section 6 of the Criminal Justice (Theft and Fraud Offences) Act, 2001. Item 3 is criminal by implication.

Items 4 and 5 are, I'm pretty sure, professional negligence on the part of the estate agent and actionable in tort unless expressly excluded by contract.
Certainly, I'd sue if I were treated like that, and I think I'd win, once I could prove that behaviour took place.

Here's the bad news. They don't appear to teach Section 6 of the 2001 Act down in Templemore, despite the behaviour it prohibits being the source of much criminal injury in Ireland. And the Garda Fraud Squad are pretty busy. Not many prosecutions are ever taken and the Gardai and DPPs office, AFAIK, haven't taken much interest in developing the scope of the law in the area despite ample evidence of all the ingredients being present in cases when people are ripped-off in one context or another.

As for civil cases for professional negligence, they're pretty expensive and it's often not easy to prove the case. That said, courts will be very sceptical towards estate agents in the future where they argue they did right by their client.

It all boils down to something that really shames our Republic: our systems of civil and criminal justice are broken. Unaccessable, unresponsive, not protecting citizens and the values of our democracy.

[Conor]

Personally I believe that people should be given an option to sell and/or buy their house via a transparent purchasing/selling system that is run by a trusted & independent source.

Imo the various CoCo's throughout the country should establish an eBay type service whereby private citizens can register as users and once vetted for authenticity by the CoCo they can then buy or sell their house on it.

Have the available houses in that CoCo jurisdiction be searchable with each property having its own webpage listing giving full and honest details about the house. Viewings could be organised through the website too. People would be then able to bid on a house and each bid (and the reserve price) once confirmed would be visible to all via that site.

A nominal flat fee could be charged to the sellers by the CoCo to maintain the service.

I think a similar system already operates in Australia.

I heard about something similar on Pat Kenny this morning, sellityourself.ie. It's privately operated, and doesn't run auctions itself, but it cuts out the estate agent.

It doesn't have much interest yet, but it seems like a good idea. Hope it takes off.

[cyberianpan]

Apparently, only the collusion was technically illegal as it is a breach of the Data Protection Act. Everything else is just hunky-dory in the Brave New Ireland.

The good news is that the statement above isn't remotely true. (The bad news follows.)

Items 1 and 2 are criminal, being prima facie breaches of Section 6 of the Criminal Justice (Theft and Fraud Offences) Act, 2001. Item 3 is criminal by implication.

Items 4 and 5 are, I'm pretty sure, professional negligence on the part of the estate agent and actionable in tort unless expressly excluded by contract.
Certainly, I'd sue if I were treated like that, and I think I'd win, once I could prove that behaviour took place.

Here's the bad news. They don't appear to teach Section 6 of the 2001 Act down in Templemore, despite the behaviour it prohibits being the source of much criminal injury in Ireland. And the Garda Fraud Squad are pretty busy. Not many prosecutions are ever taken and the Gardai and DPPs office, AFAIK, haven't taken much interest in developing the scope of the law in the area despite ample evidence of all the ingredients being present in cases when people are ripped-off in one context or another.

As for civil cases for professional negligence, they're pretty expensive and it's often not easy to prove the case. That said, courts will be very sceptical towards estate agents in the future where they argue they did right by their client.

It all boils down to something that really shames our Republic: our systems of civil and criminal justice are broken. Unaccessable, unresponsive, not protecting citizens and the values of our democracy.

That is the point I was making , the existing regulations are mostly adequate- their enforcement is poor. There is a habit of people of saying [color=red]"X is wrong so we need Y, give us Y & we''ll be happy"[/color] , much better if people said [color=green]"X is wrong, what might work to fix it ?" [/color] Else the government will happily provide an ink/paper "solution" that achieves nothing.

Also some of those deception issues would be next to impossible to prove without a 24/7 surveillance society. What might be of benfit would be a multi-disciplinary agency (Gardai, planning, Health & Safety etc) established to oversee "building code". This would take more government effort & would be harder...

And yes of course some of the issues raised are outright nonsense, of course an estate agent will flog a house after 1 month on the market for €300k rather than wait 2 months for €360k ... double the work for a 20% increase in commission ? In the seller hasn't the brains to negotitate a tiered, performance based commission then they are idiots.

The whole "management company" ... vague contracts

the legal issues when it comes to selling a home in an estate/block run by a management company that is in trouble with the Companies office

This is the one area where existing framework is poor, very difficult given constitutional issues to enforce a solution here, what might instead be better would be to promote standards : eg to publish a standard set of articles of inc for management companies, then if the developer doesn't use that the vendors would know to question it.

cYp

[joemomma]

That is the point I was making , the existing regulations are mostly adequate- their enforcement is poor. There is a habit of people of saying [color=red]"X is wrong so we need Y, give us Y & we''ll be happy"[/color] , much better if people said [color=green]"X is wrong, what might work to fix it ?" [/color] Else the government will happily provide an ink/paper "solution" that achieves nothing.

There's more to regulation than making practices illegal. If you can't detect and prove that the practices are happening in the first place, then you can't say they you have regulation. Meaningful regulation of this sector would mean that practices which are already illegal can't be carried out without detection.

In the absence of a whistleblower in the estate agency, how can anyone ever tell if the party they're bidding against is in fact a fictional construct?