Moves to regulate sale of overseas property in Ireland

[OverseasCafe]

In the course of researching regulation in the market here we have found that the new National Property Services Regulatory Authority is to be given significant powers to act against both indigenous and overseas property agents selling in Ireland.

A new licencing system is to be initiated which will involve Garda references, appropriate levels of training, qualifications relevant to property services, PI Insurance, tax clearance certificates and full financial declaration.

You can find more information at www.npsra.ie.

From speaking with Tom Lynch it would seem that the authority is to have significant powers once it is fully up and running, which should be later this year.

The initiative is to be lauded as nothing like it exists anywhere else. It is to be hoped that it will indeed be given the powers, funding and staff to allow it to clean up the marketplace and give us a transparent and trustworthy property industry.

 

[Brendan Burgess]

This is a great development and I am surprised that it has not been publicised more widely.

What is the current status of this body? Has the legislation been passed?

If not, where is the actual Bill itself in the process?

Is there any distinction between Irish and overseas property sellers in the Bill?

If an seller from another EU country is licensed in its own country, then it won't need licensing in Ireland, which is fair enough. But do other EU countries regulate the sale of property.

Brendan

 

[MugsGame]

[broken link removed].

 

[OverseasCafe]

This is a great development and I am surprised that it has not been publicised more widely.

Yes, it is a significant and positive move and one for which the government should be given some credit. The NPSRA's PR function doesn't seem to be its strong point, however.

What is the current status of this body? Has the legislation been passed?

The Bill is expected to be published in final form in the coming months and should become law later this year. The Authority has already been set up, however, pending this legislation and has an office in Navan.

Is there any distinction between Irish and overseas property sellers in the Bill?

No, there will be no distinciton between Irish based and foreign based sellers. Once they are physically selling in Ireland they will come under the auspices of the new Authority.

If an seller from another EU country is licensed in its own country, then it won't need licensing in Ireland, which is fair enough. But do other EU countries regulate the sale of property.

All EU countries are obliged to have a representative body (the equivalent of our IAVI and IPAV), membership of one of these will mean that you do not have to apply for an Irish licence to sell here. You will, however, still be subject to the powers of the NPSRA while you are active in this country. They can prevent you from selling here if they see a reason to do so.

We'll put up a fuller outline of what will be involved in acquiring a licence from the NPSRA shortly.

 

[John Rambo]

I'm just playing devils advocate here, but having bought property overseas I've some experience. Are people who get stung in these overseas property scenarios not getting what they deserve? I purchased in an area that I had visited a good few times, and not on one of these organised trips where the proverbial dirt is swept under the carpet. I did my own research regarding rents etc. And I used reputable legal people both here and overseas and took advice regarding tax implications etc. I mean, I've heard stories of people paying foreign estate agents with briefcases filled with cash...people heading up to Citywest on a Saturday and buying three apartments in some Eastern European country they've hardly heard of. Yes there should be some form of regulation but it's hard to see how it can be effective given the jurisdictional issues.

 

[OverseasCafe]

The main functions of the new Authority will be:

• To operate a comprehensive licensing system covering all providers of property services, i.e. auctioneers, estate agents and property management agents. This extended system will replace the current licensing system for auctioneers and house agents;

• To set and enforce standards for the grant of licences (e.g. educational/training standards; levels of professional indemnity insurance) as well as standards to be observed in the provision of property services by licensees;

• To establish and administer a system of investigation and adjudication of complaints relating to the provision of property services;

• To promote increased consumer protection and public awareness (where appropriate in liaison and co-operation with other statutory bodies and with relevant professional and consumer bodies) of property services in general and the cost to consumers, risks and benefits associated with the provision of those services;

• To establish, maintain and administer a compensation fund to compensate parties who lose money as a direct consequence of the dishonesty of a licensee.

Legislation will extend to those selling overseas property in Ireland. Foreign PSP’s who come to Ireland to sell overseas property, for example via exhibitions or seminars, will also be covered.

The Implementation Group has established and published on its site a register of licensed Auctioneers and House Agents. It is voluntary to register at the moment but, when legislation is passed, it will become mandatory to do so.

Regulation will not only include a licensing requirement, but also scrutiny by the Authority during the course of complaint investigations, audits or general inspections. The Authority will have power to sanction a licensee up to and including the suspension or revocation of a licence. The Authority will be given significant powers, such as the ability to prosecute a licensee which may result in fines, imprisonment or both. Its officers will be given the authority to enter and inspect premises or exhibitions to ensure that the principals are licensed and acting in accordance with its code of practice. In order to obtain a licence there will also be a requirement to produce financial records and a tax clearance certificate. Where a person suffers loss due to the dishonesty of a licensee the Authority may award compensation from a fund which will be set up from fees compulsorily paid by licensees.

All licensees will be required to furnish personal, business and Garda references along with having Professional Indemnity (PI) insurance and proof of appropriate training. We're not yet sure what constitutes 'appropriate training' as this part of the NPSRA's work is somewhat of a work in progress at the minute.

 

[OverseasCafe]

There is a more complete article on the NPSRA and how it will affect the overseas market at [broken link removed]

It is quite long so there is no point in posting it here.

 

[OverseasCafe]

Are people who get stung in these overseas property scenarios not getting what they deserve?... I've heard stories of people paying foreign estate agents with briefcases filled with cash...people heading up to Citywest on a Saturday and buying three apartments in some Eastern European country they've hardly heard of. Yes there should be some form of regulation but it's hard to see how it can be effective given the jurisdictional issues.

It is important to distinguish what the NPSRA can and cannot do. It's function is to make sure that Property Services Providers (PSPs) operate within a predefined regulatory framework in their interaction with clients here in Ireland. They are not there to make decisions for potential buyers or to back them up if they make incorrect choices.

If someone decides to purchase properties to flip them and it doesn't work out, that is their problem, unless they have been given guarantees of capital gains by the agent. I don't know of any agent stupid enough to put such a scenario on paper.

I think the NPSRA goes as far as it can in this regard, it should ensure that there is, at least, some form of regulation and licensing for those involved in the property industry here. That in itself is a huge step forward.

What happens in other countries is, and always will be, outside its remit.