At long last, something may be done to protect the interests of consumers when they buy or sell property in this State. Unscrupulous individuals and agencies have been allowed to operate without constraint and, in a housing market beset by shortages, they have engaged in "gazumping" and ripping off their unfortunate customers.
A working group established by the Minister for Justice, Mr McDowell, will meet today to review the level of fees being charged by estate agents and auctioneers; their publication of unrealistic guide prices; and the absence of entry qualifications and effective disciplinary mechanisms within the profession. A report is expected before Christmas.
The exercise will not bring down house prices, because they are driven by market forces. But the costs of associated transactions, involving auctioneers and estate agents, are likely to fall, while consumers may be accorded a greater degree of protection. The Director of Consumer Affairs, Ms Carmel Foley, has criticised the "huge fees" being charged, on the grounds that they do not reflect the level of service being provided to clients. Fees are based on a percentage of the sale price and the massive inflation in house prices of recent years has generated unjustifiable profits. It would be far better, she suggested, if fees were based on the amount of work done.
The biggest grievance by the public involves the publication of inaccurate pre-auction guide prices by estate agents. Invariably, most houses sell for far more than the guide price. The result is that unsuccessful bidders incur unnecessary expense in commissioning property surveys. The working group is expected to examine the French system - now being introduced to England - whereby the owner provides a property survey, along with a legal search of deeds and title, to all interested parties.
There are also concerns over the practice of "gazumping" and the creation of "ghost bidders" by estate agents, in order to drive up prices. If public confidence in the system is to be restored, professional standards and a code of ethics, backed by the power of expulsion for wrongdoing, must be established on a statutory basis. There is some awareness within the profession of the need for reform. But radical change is likely to be resisted. Some councillors, senators and TDs take up auctioneering as an ancillary business, particularly in rural areas. And they can be expected to join with their colleagues in defending their financial interests. In spite of that, reform is urgently required. The consumer must be protected.