Both the public and the industry are enjoying benefits of regulation
FOR decades, the property market has lacked regulation and centralised information and a welcome development has been the establishment of the Property Services Regulatory Authority (PSRA).
The authority was established in 2012 and its main function is to regulate the activities of estate agents, letting agents and management agents. The authority is also responsible for maintaining three national registers; The Register of Licensed Property Services Providers, the Residential Property Price Register and the Commercial Leases Register.
I spoke with the chief executive of the PSRA, Tom Lynch, and he updated me on the Authority's progress: "Approximately 2,300 employers have registered with the authority and approximately 5,500 individuals are registered.
The authority is not yet auditing firms but it has investigated approximately 500 complaints made by the public.
"The largest group of complaints (approximately 125) is about firms who are trading but are not registered with the authority.
"When investigating these the authority often found that the firms had subsequently ceased trading. A further group were in fact registered but the complainant had been confused by a variation between the trading name of the firm and its official name on the register. However, approximately 40 firms were discovered to be trading and unregistered and the regulator has 'put the process in train' to prosecute those firms.
"Whilst complaints are being received on a variety of issues ranging from allegations of bad service to misleading advertising, to my surprise there has been only six complaints about alleged misleading price guidelines or 'Advised Minimum Values' (AMVs.) With the commercial investment market booming and the residential market very strong in pockets, reserve prices and AMV are consistently being greatly exceeded at auction and tender and negative commentary is developing in the press."
Mr Lynch said that while few complaints have been received, in the last week their attention has been drawn to allegations of improper AMVs and also the re-emergence of 'gazumping'.
He pointed out that the AMV is not necessarily the same price as that advertised, but that the price which is advertised or quoted cannot be less than the AMV as advised by the estate agent to the vendor when taking on the sale.
In the event of a complaint, the regulator has the power to audit the estate agents files to verify the original AMV provided.
The Commercial Leases Register has operated since January 2010 and the tenant involved in every lease of a premises since then was obliged to file basic information about the letting. New lettings are being registered at the rate of approximately 8,500 per annum.
Since April 2012, tenants are required to provide additional extensive information on items such as rent free periods, rent reviews, repairing obligations and any agreements entered into by "side letter" and not included in the lease.
The Property Regulator said that despite a simple online filing process, returns of additional information from tenants are slow and the authority has issued reminders to all new tenants.
The authority receives information on new lettings from the Revenue Commissioners when the stamp duty on the lease is paid. Recently, the regulator has found that a lot of the returns being filed are being incorrectly made by the landlord and not by the tenant.
Estate agents are also telling me of cases of tenants agreeing rent reductions with their landlords which they are then incorrectly submitting as new lettings to the database.
My advice to all involved is to ensure that tenants are always correctly registering new leases and agents should double-check the facts of all lettings before offering them as evidence in a rent review arbitration.
The 'Commercial Leases Register' will become increasingly useful as the market adapts to it and more and more deals are recorded.
Mr Lynch told me that the Residential Property Price Register is operating smoothly and receives 130,000 visits to its website per month.
The regulator is finding that a lot of potential purchasers are using the register as a tool to help them decide what locations they can afford to purchase in.
Mr Lynch is keen to see the register developed to provide much more detail on each house sold, such as floor areas and numbers of bedrooms etc.
Despite a few "teething problems" and some grumbling from agents about the amount of paperwork involved, the work of the PSRA and its databases must be supported as it protects and informs the public and assists the operation of the profession.