New Laws to Regulate Irish Property Industry Announced

Ireland, NPSRA, agents, regulation, overseas property, fraud, EU, Ombudsman, banks, fines

The Irish domestic and overseas property industries are to become government regulated for the first time when a new trade authority comes into force in 2008. Overseas agents face penalties ranging from a fine of €3,000 or 12 months in jail if found guilty of breaking the new laws.

The National Property Services Regulatory Authority (NPSRA) is currently adding the final touches to its remit and will be fully active when legislation is passed through parliament, reported to be in the first half of this year.

Tom Lynch, chief executive designate of the NPSRA, told OPP the association will have a wide remit and any firm operating in Ireland selling domestic or overseas property, at exhibitions for example, will need to have a licence to work in the country. "If agents are from within the EU we will recognise any official licence they may have, but all companies will have to provide or apply for a licence. If they do not have one, whether they are from inside the EU or not, we will act."

Delays are expected for companies wishing to sell to Irish buyers, as firms without a valid EU licence will have to produce a range of information to the NPSRA. A final policy is still in discussion, but a minimum educational standard for agents is believed to be among the set of requirements listed, in addition to proving a certain level of professional competence. Other measures include providing the NPSRA with police clearance certificates, tax documentation and all companies operating in Ireland must obtain professional indemnity insurance.

Rise in complaints

Last year, some 4,374 complaints were made to the Irish Financial Services Ombudsman about companies, acting either illegally or in a misleading manner, including banks, financial services organisations and property professionals - a rise of 15% on y-o-y. The ombudsman also awarded damages in two instances worth €55,000 after buyers complained of misleading advice given to them from agents selling overseas property from Ireland.

Lynch said the NPSRA aims to wipe out unscrupulous operators by conducting snap inspections of offices and exhibitions and, once empowered, will have real powers to come down on companies found acting fraudulently. "If we find a company that is selling overseas property in Ireland without a licence, we will have the power to seize their goods, equipment and cash. To help facilitate this, a requirement that all firms operating in Ireland must have an Irish bank account will come into affect. That way, if things do go wrong, the money is still in the country and we will have legal jurisdiction to freeze those funds for possible compensation," he explained.

There are limitations to the NPSRA's powers, however. The code of conduct currently being drawn up by the association does not cover overseas property companies approaching Irish buyers via the Internet, or advertisements in foreign newspapers. "The bottom line is that if you are coming to Ireland to sell overseas property you need to contact us and obtain a licence or you will be acting illegally," Lynch added.

A recent survey undertaken by PricewaterhouseCoopers found that the property industry in Ireland expects more Irish investors to look overseas for higher capital growth as the domestic market is in decline.

Source OPP
Date added: 24 January 2008