BRIAN O’DRISCOLL summarises various aspects of the new statutory and mandatory requirements for property professionals throughout the Republic of Ireland.
The Property Service (Regulation) Act 2011
The Property Service (Regulation) Act (the Act) was signed into law in December 2011 and led to the body known as the Property Services Regulatory Authority (PSRA) being established in April 2012. The Act aims to promote consumer protection and public awareness of property services, as well as setting standards for property service providers (i.e., auctioneers/estate agents, letting agents and property management agents). The PSRA is the body responsible for the licensing and regulation of property services providers and for overseeing the complaints, investigation and redress system for consumers.
Letters of Engagement
This requirement has been introduced to ensure that there is clarity between the agent and the client in terms of the service to be provided, in order to improve transparency and reduce the likelihood of disputes occurring.
The PSRA has published Letters of Engagement (LoEs) for each of the property services defined in the Act. Under the law, it is now a statutory requirement that an LoE must be issued by an agent to a client within seven days of agreeing or beginning to provide a property service, whichever is the earliest, and the client must return the LoE, duly signed, within seven working days.
If an agent does not receive a signed LoE from the client, they must cease to provide or shall not start to provide the property service.
All agents are required to use the LoEs that have been specified on the PSRA website – www.psr.ie. Any items within brackets should be replaced with the appropriate text, or any option that is inappropriate should be removed to confirm the agreement between the client and agent. For example, “within (NUMBER) days” could be changed to “within 21 days” or “Arrangements ([will] OR [will not])* be made by the Agent” would be changed to “Arrangements will not be made by the Agent” as appropriate. There is no discretion to change or amend the detail in the LoEs; however, additional clauses, which do not negate or conflict with those in the specified form or breach any statutory provision, may be added by agreement of both client and agent.
Advised market value
Agents are required to provide clients with a statement of the advised market value (AMV) of the residential/commercial property or agricultural land that they have been asked to value for the purpose of selling. An agent shall not state an estimate of the selling price to a prospective purchaser, in any advertisement, particulars or conditions of sale, or at the auction, that is less than the AMV, and the PSRA may require an agent to provide evidence of the reasonableness and means of calculation of any AMV.
The AMV is the agent’s reasonable estimate, at the time of such valuation, of the amount, or of the relevant price range, that would be paid by a willing buyer in an arm’s length transaction after proper marketing, where both parties act knowledgeably, prudently and without compulsion.
Advised letting value
Agents are required to provide clients with a statement of the advised letting value (ALV) of the residential/commercial property or agricultural land that they have been asked to value for the purpose of letting. The ALV is the agent’s reasonable estimate, at the time of such valuation of the amount, or of the relevant price range, that would be paid by a willing tenant on appropriate letting terms in an arm’s length transaction after proper marketing, where both parties act knowledgeably, prudently and without compulsion.
Records of offers received
Agents are required to retain a record of all offers received by the agent in respect of the residential/commercial property or agricultural land offered for sale for at least six years.
Excluded bidders at auctions
It is an offence for agents to make or accept bids on behalf of a vendor unless the residential/commercial property or agricultural land is subject to a court order under the Family Law Act 1995 or the Family Law (Divorce) Act 1996.
Commercial property leases
The register is now available and it includes the address, rent, date and term of lease of all commercial leases entered into in Ireland since January 1, 2010, as declared to the Revenue Commissioners for stamp duty purposes.
A commercial property lease is an instrument creating a tenancy in respect of commercial property that is used for the purposes of business within the meaning of section 3 of the Landlord and Tenant (Amendment) Act 1980. Tenants, or their authorised person, are required to provide the PSRA with particulars of each commercial lease entered into on or after April 3, 2012, within 30 days of receiving the stamp certificate from the Revenue Commissioners. The Register is available on the PSRA website – www.psr.ie – in addition to their guidance on ‘Commercial lease Return FAQs’ and the online specified form ‘New Commercial Lease Return – PSRA/CL1-13’.
Guidance and advice
In order to create awareness of the new statutory and mandatory requirements for property services, the Society has published an LoE consumer guide and a series of help sheets, which are now available at www.scsi.ie/Regulations/PSRACompliance. In addition to this guidance, the Society also conducted a free roadshow across the regions, and a recording of this CPD is available at http://video.onestream.tv/production/view/1673.
If you have any queries on regulatory compliance please do not hesitate to contact us at firstname.lastname@example.org.