The Property Services (Regulation) Act, 2011, will bring into effect significant changes in licensing and practice for auctioneers, estate agents, property managers and other property professionals. The Act formally establishes the Property Services Regulatory Authority (PSRA), which will be the new licensing body under the Act.
Professionals covered by the Act include auctioneers, estate agents, letting agents and management agents (typically engaged by owners’ management companies). These professionals will be known as property services providers (PSPs) under the new Act.
Approximately 50% of the Society’s membership is affected by this major change to regulation.
Background to the Act
On December 20, 2011, President Michael D Higgins signed the Property Services (Regulation) Act 2011 and established the PSRA.
Under the Act, the functions of the Authority may be summarised as:
- to issue and renew licences to property services providers;
- to establish and maintain a register of licensees;
- to specify and enforce qualification standards (e.g., education and training standards) and other requirements (e.g., the nature and minimum levels of professional indemnity insurance, client accounts, client contracts, etc.);
- to specify and enforce standards to be observed in the provision of property services by licensees;
- to establish, maintain and administer the Property Services Compensation Fund;
- to establish and administer a system of investigation of licensees and other persons providing property services;
- to promote the development of codes of practice; and,
- to promote public awareness and disseminate information in respect of property services.
Licensing of property services providers
Arguably the most significant of the imminent changes are the new requirements regarding licensing. All professionals who fall under the classification of PSP (full details of the definitions of the various categories of professional are available on the Authority’s website – www.psr.ie) must be licensed by the Authority to carry out their work. The Act defines four separate types of property service:
- the auction of property other than land;
- the purchase or sale, by whatever means, of land;
- the letting of land; and,
- property management services.
A separate licence will be issued for each of the four categories.
However, a PSP may, if all the licensing requirements are met, hold a single licence covering one or more of the different categories. In addition to each business being licensed, the law now requires that each person who provides property services must also obtain a licence.
The Authority has devised four application forms, for a company, a partnership, a sole trader (independent contractor), and an individual (employee).
Preliminary details regarding registration fees, contributions to the Compensation Fund, and other aspects of the Act are set out in the authority’s ‘Guide to becoming a Licensed Property Service Provider’ – www.npsra.ie/website/npsra/npsraweb.nsf/page/publications-guidance-en.
Members of the Society of Chartered Surveyors Ireland who would formerly have obtained their licence from the District Court under the Auctioneers and House Agents Acts 1947 to 1973, are by now aware that these licences will expire on July 5, 2012, to be replaced by licences obtained under the new Act.
Understandably, there has been some concern among members about how the new licensing system will operate. The Authority recently wrote to existing licence holders, stating that it expects “that the licensing of PSPs will be carried out to coincide with the expiry of the current licences … in July 2012”.
Upon receipt of this letter a number of members contacted the Society advising that they had already commenced the District Court application process for the renewal of licences for July 2012/13. The Society contacted the Authority to find out if the current licence holders would have to engage in a district court application process this year and the PSRA’s response was:
“While it is a matter for the Minister to make the necessary order for the commencement of the statutory provisions, I would be confident that the Authority will be in a position to take over the licensing from the Revenue Commissioners with effect from the commencement of the 2012/13 licensing year on July 6, 2012.”
This position was reiterated by the Authority’s CEO, Tom Lynch, in a recent address to members of the Residential Agency Professional Group, when he stated that he was “hugely confident” that the Authority would be in a position to issue licences from July 6.
PSRA CEO emphasises new legal situation
In his presentation, which took place at the Residential Agency Professional Group’s CPD briefing on May 16 in The Heritage Hotel, Portlaoise, Mr Lynch particularly emphasised to members that the Act places licensing, and the responsibilities of the PSP, on a new legislative footing, where breaches of the Act are now criminal acts and will be enforced as such. The Authority can impose fines and other sanctions, such as suspending or even revoking licences.
Certain breaches of the legislation, such as hindering an investigation or practising without a licence, can even result in imprisonment. Mr Lynch’s presentation is available to members via the SCSI website. While the Authority is confident that licensing arrangements will be in place on or before July 6, and that all relevant information will be available on the Authority’s website, there will be a transition period while new applications are being processed. Mr Lynch assured members that if they are legally providing property services prior to July 6, and they submit their application form prior to that date, they can continue to practise until the new licence is issued, and notice of receipt of the application form will be issued as confirmation of this.
To assist and inform professionals who are affected by these changes, the PSRA has issued a ‘Guide to Becoming a Licensed Property Services Provider (Auctioneer/Estate Agent, Letting Agent or Management Agent)’, which is available on the Authority’s website. The guide outlines the requirements and qualifications necessary to obtain a licence, including:
- property services covered by the Act;
- property services providers covered by the Act;
- who needs to be licensed; and,
- how to make an application for a licence.
Part II of the Guide, which will contain detailed information on completing the application forms, has been omitted for the time being, and will be included as soon as the Authority is in a position to invite licence applications.
The Society will continue to actively engage with the PSRA and update members on any developments. Society Director of Regulation Brian O’Driscoll says: “Any queries in relation to the PSRA should be directed to the PSRA in this first instance. If members require any clarification on regulation matters generally, they should contact the Society at firstname.lastname@example.org”.
Minister appoints Authority
On April 3 the Minister for Justice, Equality and Defence, Alan Shatter TD, signed the first Commencement Order and the Establishment Order under the Act and appointed the 11 members to the Authority:
Geraldine Clarke (Chair) is a solicitor with Gleeson McGrath Baldwin Solicitors in Dublin.
Carol Boate is an Advocacy Division Manager with The Competition Authority.
Edward Carey is Managing Director, Property Team Carey Auctioneers, Enfield, Co. Meath. He is a former President of the IAVI and is currently Chairman, Residential Agency Practice Group, Society of Chartered Surveyors Ireland.
Patrick Davitt has worked in auctioneering for over 30 years. He has been a member of the Institute of Professional Auctioneers and Valuers (IPAV) since 1983 and a Fellow of the Institute since 1985.
James Doorley is Assistant Director of the National Youth Council of Ireland with responsibility for Advocacy and Representation.
Deirdre Fox is Chairperson of the board of an owners’ management company. She established the Apartment Owners Network in 2008 to provide a voice for members of management companies.
Martin Hanratty lectures in the DIT School of Real Estate and Construction Economics, and is Head of the Department of Real Estate, DIT. He is a member of the Society of Chartered Surveyors Ireland Surveying Courses Accreditation Committee.
Josephine Henry is an Advocate Planner for Inner City Communities with Community Technical Aid (CTA) Dublin.
Paul Mooney is a Director/Partner in Strathmore Ivernia Ltd. He is a member of the Society of Chartered Surveyors Ireland, and an accredited mediator with Mediation Forum Ireland.
Myles O’Reilly operates a consultancy practice, O’Reilly Consultants, offering advice on management, competition and fair trade issues.
Regina Terry is a Principal Officer in the Civil Law Reform Division of the Department of Justice and Equality.
For further information on the Act, and on the PSRA, log on to www.psr.ie. To download a copy of the ‘Guide to Becoming a Licensed Property Services Provider (Auctioneer/Estate Agent, Letting Agent or Management Agent), log on to www.npsra.ie/website/npsra/npsraweb.nsf/page/publicationsguidance-en.
To access presentations from the recent Residential and Rural Agency Professional Group CPD meetings, log on to www.scsi.ie.