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Property

Winter 2012

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The magazine of the Institute of Professional Auctioneers & Valuers

l a n o i s s e f P ro


Welcome

Dear Member Welcome to the Winter 2012 edition of the Property Professional magazine. As we come to the end of yet another year, there was little good news in Budget 2013 which has seen another huge tranche of money taken out of the Irish economy. The much vaunted property tax has finally arrived at what IPAV believes to be a totally inappropriate time in the midst of a horrendous recession in the property industry. I believe it will slow down any recovery in the market and is clearly very biased against urban dwellers who will pay the lion’s share of the LPT. The imposition of PRSI on all rent income is another blow to the rented sector where a scarcity of good quality accommodation, particularly at the lower end of the market, is becoming ever more of a reality. The property Professional is the Magazine of the Institute of Professional Auctioneers & Valuers 129 Lower Baggot Street Dublin 2 Tel: 01 6785685 Fax: 01 6762890 E-mail: info@ipav.ie Websites: www.ipav.ie www.OnView.ie CEI Website: www.web-cei.com

Front cover: Entrance to Newgrange Stone Age Passage Tomb, Boyne Valley, Co. meath

Chief Executive Officer Fintan McNamara M.Litt. Dip. L.S. MIPAV(HON) Editor Tim Ryan Tim Ryan Communications Tel: 01 634 5330 www.timryan.ie Advertising & Design Designroom info@designroom.ie Tel: 01 615 4714/15 Publisher Designroom www.designroom.ie

Property Professional Winter 2012 Views expressed by contributors or correspondents are not necessarily those of IPAV or the publisher and neither IPAV nor the publisher accept any responsibility for them.

Details of Budget 2013 as it relates to the property industry are outlined in this edition and the main changes are analysed separately by well known economist Jim Power. This issue also features a number of interesting items including the first Dáil debate on a new Residential Tenancies Bill in which Housing Minister Jan O’Sullivan hopes to introduce an independent deposit retention scheme. This issue’s member focus is on Oliver Gormley who runs a well-known art gallery on Dublin’s South Frederick St while the EU capital, Brussels is the featured city of our article from Europe. There are details about the new housing standards which come into effect in the New Year and we have photos from IPAV’s participation in the IFA protest march against the CAP reform proposals on October 9. Finally, I would like on behalf of all members, to extend sympathy to our President Liam O’Donnell on the recent death of his wife, Frances and to National Council member Eamon O’Flaherty on the recent death of his wife, Anne. Beannachtaí na Nollag do gach éinne.

Best wishes Fintan McNamara Chief Executive

Contents Budget 2013 IFA Protest March

Page: 4-7 Page: 9

Termination of a Part 4 Tenancy

Page: 10-11

New Deposit Protection Scheme

Page: 12-13

Member Profile

Page: 18-19

Secure Investment in the heart of the EU

Page: 20-21

Woven Treasures

Page: 24-25

The Last Word

Page: 28 Winter Issue | page 1


President’s Message

Message from the President As we approach the end of another year, it is appropriate, I feel, to reflect on the property industry generally and where it is headed. Over the past 30 years or so, various successive governments have interfered intermittently in the property market, with different degrees of success and failure. One thing I think is clear is that in a modern, sophisticated society you cannot have a totally free market and some degree of monitoring and intervention is required from time to time. History has taught us that there will always be property cycles and the government of the day must closely monitor them at their different stages. The beginning of a cycle usually occurs coming out of a recession and at that point some government intervention is required to stimulate the market and to help it to start growing again. Of course, it goes without saying that when the market is stable and fully functioning, the government should withdraw any incentives, or to quote the Governor of the Central Bank, Patrick Honohan: “Part of the role of Government is to take away the punch bowl when the party begins to swing.” This was something which the last Government clearly neglected to do during the boom with the horrendous consequences that followed. Ireland would seem to be at such a starting point in the cycle now and it behoves the Government to provide some incentives for an industry that is still far larger than agriculture. Agriculture, on the other hand for example, has always received first class attention from the Government and this interest is obvious from the presence of a senior minister at the Cabinet table. No such priority has been given to the property industry where responsibility for one of the most basic needs of society, housing, and that of an equally important area, planning, are still the responsibility of a Minister of State. As the country hopefully begins a new property cycle, I feel it is incumbent on the Government to appoint a national property council, or similar body, comprised of experts from relevant fields throughout the property industry who would advise it and the Minister of the day on the trends and needs as they occur. It could commission various reports and studies from expert bodies and individuals to augment its expertise in keeping careful tabs on the direction of the industry. The

Winter Issue | page 2

council’s reports and deliberations would be published and the council would make regular presentations of its findings as well as appearing before relevant Joint Oireachtas Committees as requested. A key role of the council would be to signal any major problems that might arise and to advise early on what action, if any, needed to be taken to avoid severe upturns or downturns as we have experienced in the recent past. Such a council need not come at a huge cost to the Exchequer but could be operated with a very small secretariat with the costs largely borne by the industry when the market recovers sufficiently. One welcome step in the industry recently has been the setting up of a property register. However, the current available information is limited and this should be extended as quickly as time and finances permit to a comprehensive and all-embracing database which would include information on planning applications, grants of permission, details of all housing types, density etc. In other words it would become a One-StopShop for the property industry generally. Rather than have to trawl through files in the various local authorities, Bord Pleanála and so on, members working in the industry and the public at large could access all relevant information together on one website. The above are some thoughts to reflect on as we enter another New Year which hopefully will be more stable and positive for one of our key national industries and all those who work in it. If we have learned anything from the past, it must be that leaving the industry to chance and its own devices and only interfering when the cycle virtually gets out of control is not the way to go and can only end in tears again at some future point. Whether the Government will take note, we will have to wait and see. In the meantime, may I wish all members and readers a Very Happy Christmas and New Year.

Liam O’Donnell President


Budget 2013

Budget 2013 The following are the principal items of note relevant to the property industry and agriculture contained in Budget 2013: Local Property Tax (LPT)

5. Rates

The Local Property Tax (LPT) will come into effect from 1 July 2013 with a half year charge applying for 2013. The LPT will be administered by the Revenue Commissioners. The main features of the Local Property Tax are as follows:

• For the first 18 months (up to 31 December 2014) the national central tax rate will be 0.18% up to €1 million and 0.25% on excess value over €1 million.

1. Liable Persons • Owners of residential properties, including rental properties, will be legally responsible (“liable persons”) for payment of the tax. • The liability will rest with the tenant in the case of long leases (over 20 years) or life tenancies. • Co-owners will be jointly and severally liable for the tax. • During March 2013, information will be sent by the Revenue Commissioners to liable persons advising them of their obligations in relation to the LPT and how to comply.

• From 1 January 2015 local authorities will have discretion to vary the LPT rates by +/-15% of the national central rate. • The national central rate will not be increased for the lifetime of the Government.

6. Payment Methods The LPT may be paid in full by a Bank Single Debit Authority or by Debit/Credit Card. Alternatively the tax may be paid by instalment through deduction at source, direct debit or by cash payments. Liable Persons may choose from the following payment options:

2. Assessment System

• Deduction at source from salary/occupational pension or certain payments from the Department of Social Protection, the Department of Agriculture, Food and Marine

• The Local Property Tax will operate through a system of selfassessment and self-declaration by liable persons.

• Direct Debit • Bank Single Debit Authority • Credit Card/Debit Card • Cash Payments through certain service providers

• The Revenue Commissioners will have responsibility for all administration, collection, enforcement and audit aspects of LPT.

7. Compliance

• Normal Revenue enforcement and collection procedures will apply to the LPT.

3. Basis of Assessment • The market value of residential properties will be the basis of assessment for the tax. • There will be a system of market value taxable bands (see Table 1, page B25): o The initial band covers €0-€100,000. o Then bands of €50,000 width up to €1,000,000 in value thereafter. o The tax liability will be calculated by applying the tax rate to the mid-point of the band. o

Houses valued over €1m will be chargeable to LPT on their market value, with no banding applied.

4. Valuing Property • Liable persons will self-assess the market value of their property. • Where Revenue guidance about valuing a property is followed, property valuations will not be challenged by the Revenue Commissioners. • The initial valuation is valid up to and including the year 2016.

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• The Revenue Commissioners are developing a comprehensive register of residential properties in the State. It will contain approximately 1.9 million properties. • During March 2013, information will be sent by the Revenue commissioners to liable persons advising them of their obligations in relation to the LPT and how to comply. • In the absence of a return the Revenue Commissioners will pursue collection of an estimated amount of LPT, which will have been notified to the taxpayer. • In the absence of a return or an election by the taxpayer for a particular method of payment, as far as possible, deduction at source will be the default means of collection. • In the case of the self-employed, the Revenue Commissioners will not issue a tax clearance certificate where there is unpaid LPT. Late delivery of an LPT return will be linked to the filing of an income tax return, thus exposing a self-employed taxpayer to the penalty of an income tax surcharge. • Where LPT remains outstanding, a charge will attach to that property. This charge will have to be discharged on the sale/ transfer of the property.

Exemptions Certain properties will be exempt from assessment. These exemptions largely correspond to exemptions from the Household Charge, and include: •

Newly constructed but unsold residential property

Where ownership is vested in a public body or an approved


Budget 2013

charitable body and used to provide accommodation to people with special housing needs such as the elderly or people with disabilities •

Where a principal private residence is unoccupied by reason of long term mental or physical infirmity

Mobile home, vehicle or a vessel

Property fully subject to commercial rates

Houses in certain unfinished developments as prescribed by law

Properties enjoying protection in other legislation – diplomatic or similar property

New exemptions will apply in the case of: • New and previously unused properties that are purchased between 1 January 2013 and the end of 2016 will be exempt until the end of 2016. • Second-hand property purchased by a first time buyer between 1 January 2013 and 31 December 2013 will be exempt until the end of 2016. However, local authority housing and social housing will not be exempt unless it is provided to people with special housing needs such as the elderly or people with disabilities. Liability will rest with the local authority or social housing organisation as owner.

9. Deferrals A system of voluntary deferral arrangements for owner-occupiers will be implemented to address cases where there is an inability to pay the LPT under specified conditions: • Where the gross income does not exceed €15,000 (single) and €25,000 (couple) • For income stressed owner-occupiers who have an outstanding mortgage, an adjusted gross income limit will apply – where gross income less 80% of mortgage interest falls below €15,000/€25,000 a deferral option will be available up to the end of 2017 (when mortgage interest relief also ends). • Marginal relief will apply for owner-occupiers where the income or adjusted income is €10,000 above the income limit (€15,000/€25,000) to permit deferrals of up to 50% of LPT liability. • Interest will be charged on deferred amounts but at a lower rate (i.e. 4% per annum) than the rate charged in default cases (i.e. 8% per annum). The deferred amount, including interest, will be a charge on the property. Deferred property taxes and interest will have to be discharged on the sale/transfer of the property.

10. Local Authority Funding •

Revenue from the LPT will support the provision of local services.

Internationally, local services are administered by local authorities and financed by local service charges.

In Ireland, local authorities are responsible for, among other services, public parks; libraries; open spaces and leisure amenities; planning and development; fire and emergency services; maintenance and cleaning of streets; and street lighting. These facilities benefit everyone.

11. Household Charge/Non-Principal Private Residence (NPPR) Charge a. The arrears of the Household Charge for 2012 will be capped at €130 if paid to the Local Government Management Agency before 30 April 2013. b. From 1 May to 30 June 2013 normal Household Charge collection, late payment fee and interest procedures will apply. The cap of €130 will no longer be available. c. From 1 July 2013, any outstanding Household Charge will be increased to €200 and added to the Local Property Tax due on the property. In effect, the arrears of the Household Charge will be converted into LPT and collected through the LPT system. The Revenue Commissioners will pursue this additional liability when the LPT system is fully operational. Interest and penalties under the LPT system will apply to the additional €200. • The annual NPPR charge will apply for 2013 and the NPPR will be abolished thereafter. • Similar provisions as for arrears of the Household Charge will be put in place for the collection of any arrears of NPPR.

Communication • The Revenue Commissioners will engage in a comprehensive public communications campaign throughout the first half of 2013 involving the publication of comprehensive guidelines

Other measures: Capital Gains Tax: The current rate of 30% is being increased to 33%. This increase applies in respect of disposals made after 5 December 2012.

Relief for Farm Restructuring To enable farm restructuring, relief will be available where the proceeds of the sale of farm land are reinvested for the same purpose. The sale and purchase of the farm land must occur within 24 months of each other and the initial sale or purchase transaction must occur within the period commencing 1 January 2013 and ending on 31 December 2015. The relief will also apply to farm land swaps subject to certification by Teagasc for all transactions seeking relief. The commencement of the relief is subject to receipt of EU State Aid approval.

continued overleaf

Winter Issue | page 5


Budget 2013 continued from previous page

Reduction in the Farmer’s Flat-Rate Addition from 5.2% to 4.8%

Capital Acquisitions Tax

The farmer’s flat-rate addition will be reduced from 5.2% to 4.8% with effect from 1 January 2013. The flat-rate scheme compensates unregistered farmers for VAT incurred on their farming inputs.

The current rate of 30% is being increased to 33%. This increase applies in respect of gifts or inheritances received after 5 December 2012.

The flat-rate addition is reviewed annually in accordance with the EU VAT Directive. The new 4.8% rate continues to achieve full compensation for farmers.

The current group tax free thresholds are being reduced by 10%. This reduction applies in respect of gifts or inheritances taken after 5 December 2012.

Real Estate Investment Trusts (REITs)

Farmer Taxation

An established, internationally recognised model for property investment – Real Estate Investment Trust (REIT) - is to be introduced. REITs are listed companies, used to hold rental property, which provide a return for investors similar to that of direct investment in property. Qualifying income and gains of a REIT will be exempt from corporation tax at the level of the REIT company. Instead, the REIT is required to distribute profits annually, for taxation at investor level. Full details of the measure will be contained in the Finance Bill and will include features to maintain taxing rights in the State over Irish immoveable property. The cost of this measure will be dependent on investor take-up of the REIT model.

Stock Relief Extend the general rate of stock relief of 25% for a further three years to 2015.

Young Trained Farmers stock relief Extend the YTF rate of stock relief of 100% for a further three years to 2015. Subject to EU State Aid clearance.

Stock relief for registered farm partnerships Extend definition of registered farm partnership to include other registered partnerships such as beef production partnerships for the purposes of the 50% rate of stock relief. Subject to EU State Aid clearance.

Budget 2013 and the Property Market By Jim Power, Economist Economic Backdrop to Budget 2013 The background against which Budget 2013 was prepared, from both the perspective of the economy in general and the property market in particular, was very challenging. When Budget 2012 was presented last December, the Department of Finance was forecasting growth of 1.3 per cent in Gross Domestic Product (GDP) in 2012 and 2.4 per cent in 2013. In Budget 2013, these forecasts were revised down to 0.9 per cent and 1.5 per cent respectively. This downward revision is not surprising, as 2012 turned out to be another very challenging year for the economy. The export sector performed well in a difficult global economy, but the two components of domestic demand – consumer expenditure and business investment - both contracted. Bank credit remained a very scarce commodity across the economy, while consumers were adversely affected by Budget 2012, the prospect of Budget 2013 and a difficult labour market. Looking to the economy in 2013, it will clearly be another challenging year. The Euro Zone is now in recession, the UK is experiencing very weak growth, and the US is still growing well below potential. Undoubtedly, the on-going Euro Zone crisis will be the key global issue over the coming year as policy makers continue to struggle to sort out the difficulties caused by unsustainable levels of government debt in many countries. Ensuring the survival of the Euro Zone in its current guise will be the key challenge for European leaders. Domestically, the Budget

Winter Issue | page 6

2013 extraction of €3.5 billion from the economy will obviously impact on economic activity in a significant way, and it will not take too long for attention to start getting focused on where the Minister for Finance will find €3.1 billion in Budget 2014 next December. All indicators of activity in the property and construction sector remained weak in 2012, although the pace of decline did decelerate. Building activity continued to weaken, but prices showed signs of stabilisation. Lending for mortgage purposes totaled just €1.637 billion in the first 9 months of 2012. The IBF has recently commenced publication of a new monthly dataset relating to mortgage approvals, which shows that in October 2012, the value of mortgages approved for house purchase grew by 33.2 per cent year-on-year. Hopefully, this is the first indicator of a return to a functioning mortgage market.

Budget 2013 – Implications for the Property and Construction Sector The key item in Budget 2013 in relation to the property and construction sector was undoubtedly the introduction of the much vaunted residential property tax. This tax will apply from July 1st 2013 and is expected to raise €500 million in a full year. The tax will be applied at a rate of 0.18 per cent on the value of a property, and this valuation will be based on self-assessment. This is a difficult concept for the majority of home-owners, because


Budget 2013 in the very illiquid conditions that have characterised the Irish property market over the past 5 years, it is very difficult to estimate the value of many houses. This may prompt some owners to have a professional valuation carried out, but many may just decide to take a stab at the value. The valuation basis will then remain unchanged until 2016, which will give some certainty. However, from 2015, local authorities will be able to vary the rate by up to +/- 15 per cent. A rate of 0.25 per cent will apply to houses valued above €1 million, on the portion above €1 million. The tax will apply from 1/7/2013 for the second half of the year. There will be an exemption from the tax up to the end of 2016 for any new or previously unoccupied houses bought in that period, and in addition purchases of any homes by first-time buyers in 2013 will be exempt to the end of 2016. This property tax is far from an exact science and its application will be fraught with many difficulties and it does have many flaws. The tax will apply to a house regardless of the level of mortgage outstanding on the house or the situation regarding negative equity. Furthermore, given that house prices in urban areas, particularly Dublin, are considerably higher than outside urban areas and will generally have a significantly higher mortgage attaching, so householders in such areas will end up paying considerably more regardless of ability to pay. The higher rate applied to houses with a value in excess of €1 million is very penal as it totally ignores the fact that a higher mortgage is likely to be attaching, and of course does not take into account the difference between asset values and income. For buy-to let investors, this proposed property tax does not represent good news. The tax will apply to the owner of the property, and it is currently estimated that 29 per cent of buy to let mortgages are in arrears, so this tax will just exacerbate the difficulties. For future mortgage borrowers who will be liable to pay the tax, the annual cost of the new property tax will have to be factored in to affordability calculation for the monthly mortgage repayment. This should have the effect of dampening the price that will be paid for the house and the level of mortgage that will be sought. Furthermore, we can be certain that the property tax announced in Budget 2013 will represent the thin edge of the wedge and in future budgets will be adjusted upwards purely as another revenue-raising tool for central government. In Budget 2012 the Minister for Finance announced that mortgage interest relief would be applied at a rate of 30 per cent for firsttime buyers who took out their first mortgage between 2004 and 2008; that mortgage interest relief would no longer be available

to those who purchase after the end of 2012 and will be fully abolished from 2018; and that for those who wish to buy a house in 2012, first-time buyers would get relief at a rate of 25 per cent and non-first time buyers would benefit from relief at 15 per cent instead of the reduced rate of 10 per cent. In Budget 2013, the Minister for Finance did not alter any of those measures. The introduction of Real Estate Investment Trusts (REITs) is a positive development as it will provide an efficient and internationally recognised method for investing in commercial property. In addition, as announced in last year’s budget, any commercial property bought before the end of 2013 will be exempt from Capital Gains Tax if held for at least 7 years.

Prospects for 2013 In looking at the prospects for the housing market in 2013, the key factors that are likely to influence activity in the market are the general economic environment, personal disposable incomes, price expectations, interest rates, mortgage availability, and housing affordability. In relation to the economic environment, 2013 will be another challenging year due to a continuation of intense economic uncertainty in the Euro Zone, and the deflationary impact of Budget 2013. Personal disposable incomes are likely to fall again due primarily to the impact of the taxation and expenditure measures in Budget 2013; affordability will be adversely affected by a further hit to disposable incomes and the property tax, which could well be increased again in Budget 2014. In relation to interest rates, there appears to be no chance of the ECB tightening during 2013, and in fact its base rate could be cut from its current level of 0.75 per cent. However, the banks will most likely continue to push to widen the interest margin over the coming year, so the cost of non-tracker mortgages could remain under upward pressure. For those on tracker mortgages, do not relent. All in all, 2013 looks likely to be another challenging year for the property market, although the pace of decline of recent years should continue to level off. At a general level, the ability of the Irish government to achieve external debt relief and how it addresses the crisis with personal indebtedness will have a crucial bearing on the year ahead. A good deal could be a game changer for the economy, but it is still shrouded in doubt and uncertainty. On the negative side, taxpayers can look forward to a fiscal correction of €3.1 billion next December. Despite all of the difficulties and reservations, the specific measures introduced for the property market should help it, with the exception of the headline grabbing property tax.

Local Property Tax will delay recovery of property market - IPAV The introduction of a the new Local Property Tax (LPT) will delay the recovery of the property market and is inherently unfair, IPAV chief executive Fintan McNamara has stated. Reacting to Budget 2013, Mr McNamara said the tax was very unfair in that it was biased against city dwellers and was being levied exclusively on the owners of houses who would be supporting the 30 per cent of people who now live in rented accommodation. Rather, he said the tax should be levied on house occupiers. Mr McNamara said the ‘so-called ‘mansion’ rate of tax of 0.25% on houses valued at over €1m represented the thin edge of the

wedge and could be easily extended downward in future budgets. Overall he said the Budget provided no stimulation for the property market and the ending of the mortgage interest relief scheme for first time-buyers was particularly regrettable. Mr McNamara also criticised the extension of PRSI to rental income, a move he said which would scare off investors leading to a shortage of rental properties in the future. IPAV welcomed the abolition of the NPPR from 1 January 2014 but said it should be abolished from 1 July 2013, the date the Local Property Tax takes effect. Winter Issue | page 7


Property News

New Housing Standards from 1 February 2013 The Housing (Standards for Rented Houses) Regulations 2008 - Articles 6, 7 & 8 On the 1st of February, 2013, Articles 6, 7 and 8 of the Housing (Standards for Rented Houses) Regulations 2008 will come into effect for all residential rented accommodation. This will mean that all rental accommodation must have its own separate sanitary facilities. In addition, updated requirements in relation to heating and facilities for cooking, food storage and laundry will apply to rented accommodation. A summary of these articles’ requirements is set out below.

Sanitary Facilities - Article 6

All rental accommodation must have a separate room, contained within the rented dwelling, a toilet, wash basin and a fixed bath or shower with hot and cold water facilities.

Heating Facilities - Article 7

All habitable rooms must contain a fixed appliance capable of providing effective heating and the tenant must be able to control the operation of such an appliance.

Food Preparation and Storage and Laundry – Article 8

Each rented dwelling must have adequate facilities for the hygienic storage, preparation and cooking of food and access to a washing machine and dryer. Responsibility for enforcement of these standards rests with the local authorities. The penalties for non-compliance with the Regulations are a fine of €5,000 imprisonment for a term not exceeding 6 months or both and the fine for each day of a continuing offence is €400. Enquiries on the Standards for Rented Houses may be sent by email to private_housing@environ.ie

New BER Regulations for advertisin g residential properties for sale or ren t New regulations will come into force from the 9th of January 2013 which will see the inclu sion of BER ratings in all residential sale and letting adve rtisements. A BER is an indication of the energy perform ance of a property. This new legislation is contained in Statutory Instrument No. 243 of 2012 European Union (Energy Performance of Buildings) Regulations 2012 pub lished on 10th July 2012. Part 3, Section 12 of this legis lation sets out the owners or their agents responsibiliti es in relation to advertising properties for sale or rent . From the 1st of January 2009, a BER certificate became compulsory for all homes being sold or offered for rent. However, from the 9th of Janu ary 2013, anyone wishing to sell or lease any residentia l property and who advertises its sale or availability to let either directly or through an agent acting on their behalf will have to ensure that the building energy ratin g appears in that advertisement. An “advertisement” in relation to a building energy rating as set out in the above legislatio n means a public announcement – in a newspaper; in a magazine; in a brochure; in a leaflet; on an adve rtising notice; on a vehicle; on radio; on television; on the internet, through direct mail or in such other forms as may be prescribed in guidance provided by the Sustaina ble Energy Authority of Ireland (SEAI).

IPAV launches a new logo!

out a modern, clear and strong visual representation of who we are and what we do. We believe this logo will become synonymous in representing Auctioneers & Valuers throughout Ireland.”

IPAV is delighted to launch its new, redesigned logo which it strongly encourages all members to incorporate into their business.

The new logo is to replace IPAV’s previous logo, which in the past could only be used by IPAV Fund Member Firms. However, as IPAV and the industry evolved, the Institute redesigned its logo to enable all IPAV members to benefit from its professionalism as members of this Institute.

IPAV Chief Exective Fintan McNamara said: “Together, through our increased promotion and use of this logo, we are sending

Winter Issue | page 8

For quality purposes, the logo can only be accessed via IPAV designer’s website. Once a member logs in, he/she will see that the logo is available in a number of different formats. If a member has any queries regarding which format is most suitable or any such technical query, IPAV’s designer Lee Ryan is on hand to help. However, any general queries or feedback regarding the logo or its use, should be made to IPAV’s Head Office. Details on how to log on to the website have been emailed to members.


IFA Protest

IPAV participates in IFA Protest March A delegation of IPAV members, led by Senior Vice-President Ronald Duff, took part in the IFA Day of Protest march in Dublin on Tuesday, October 9. The members gathered with the special IPAV banner at Merrion Square for the hour long march which went around all of Merrion Square, passed the rear entrance to Leinster House and up Merrion Row before finally stopping outside the gates of Leinster House on Kildare St. Members who helped carry the banner on the march included Padraig Smith, Ballyjamesduff, James Gaynor, Portlaoise, Colm Farrell, Gort and William Biggane, Charleville. During the march Ronald Duff was interviewed by RTE’s Frances Shanahan for the Drivetime programme. “Many of our members are rural, serving the farming community and we were delighted to be there in support of the IFA protest against the CAP proposals,” said Ronald Duff. “This march was a firm warning to the Government and the Minister for Agriculture that Ireland wants to retain its full share of the CAP budget in the current negotiations and IPAV stands full square behind that.” IPAV was publicly thanked for its participation from the main stage prior to the address by IFA President John Bryan. Getting ready outside IPAV Head Office with the IPAV banner for the IFA march were (l – r): Ronald Duff, Ratoath, Co. Meath; Colm Farrell, Gort, Co. Galway; James Gaynor, Portlaoise, Co. Laois and Padraig Smith, Ballyjamesduff, Co. Cavan.

The IFA march approaches Leinster House

The IPAV banner visible in the march as it rounds the south end of Merrion Square

IPAV Vice-President Ronald Duff is interviewed for RTE’s Drivetime by Frances Shanahan

Padraig Smith (hidden) and John Mollin, Tullamore holding the IPAV banner at the start of the march. Also present are James Ganor (left) and Ronald Duff (right).

Winter Issue | page 9


Property News

Termination of a Part 4 Tenancy by a Landlord in Rent Arrears cases Where a landlord seeks to terminate a Part 4 tenancy (a tenancy of duration longer than 6 months) because the tenant has failed to pay rent, the following three step procedure must be followed: 1. Notice of breach of obligation*, the landlord must notify the tenant that: a) the tenant is in arrears of rent; b) the tenant is allowed a reasonable time to remedy that breach of obligation; c) the landlord is entitled to terminate the tenancy if the tenant fails to remedy that breach of obligation within the period specified. 2. 14 day warning notice for failure to pay rent, where a tenant falls into rent arrears, the landlord must serve a written notice on the tenant informing him or her of the amount of rent that is due. The landlord must then give the tenant 14 days to pay those rent arrears. 3. 28 day notice of termination, if the tenant fails to pay the rent due within 14 days of receipt of the written notice at point 2, the landlord may proceed to terminate the tenancy by serving a 28 day notice of termination. **Please note the following two points regarding the Notice of breach of obligations at point 1 above: 1. This notification does not need to be in writing. A landlord can give a tenant oral notice of the rent arrears. However the landlord must orally state points a), b) and c) at point 1 above. The tenant must be made aware that failure to pay the rent arrears within a reasonable time will result in the landlord terminating the tenancy. The PRTB recommends that it is prudent to give notice under point 1 above in writing. 2. The second point to note is that the landlord must give the tenant “a reasonable time” to pay the rent arrears. 14 days is the recommended timeframe of the PRTB. However, what is “reasonable” may vary on a case by case basis.

Sample Warn

ing Notice

ANCY OF A PART 4 TEN e to s.34 aph 1 of the Tabl gr ra pa to nt ua rs 2004 Notice served pu l Tenancies Act ia nt de si Re e th of LIGATION BREACH OF OB

(S)].

ME(S) OF TENANT

TO: [INSERT NA

RT ADDRESS e dwelling at [INSE th of y nc na te es to your This notice relat ELLING] DW D t OF RENTE you have [set ou your tenancy as of s e rm th te e ith w th of rdance You are in breach y the rent in acco pa to d e ile th fa g. to e. ion access breach of obligat sed the Landlord agreement/refu y nc the dwelling na t te -le e th ub /s of terms ing out repairs rry ca of e os rp pu dwelling for the lord’s consent.] nd La e th t ou with [or riod of 14 days gives you the pe rd lo nd remedy the La to e ] th circumstances e By this notice, th in te ria op idered appr do so within this ould you fail to whatever is cons Sh . s) n( io at lig nancy ob y pursuant to breach of your te inate your tenanc rm te to d le tit lord is en period, the Land Act 2004. ential Tenancies sid Re e . Part 5 of th TE OF SERVICE] ___ [INSERT DA __ __ __ __ __ __ rved on This notice is se _____ ______________ Signed:_______ d’s Agent Landlord/Landlor Winter Issue | page 10


Property News

G NOTICE

14 DAY WARNIN

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Frances O’Donnell RIP and Anne O’Flaherty RIP On behalf of the Institute, IPAV Chief Executive Fintan McNamara has extended sympathy to President Liam O’Donnell on the recent death of his wife, Frances, and to National Council member Eamon O’Flaherty on the death of his wife, Anne, in October. Frances O’Donnell, a native of Graiguenamanagh in Co. Kilkenny, died in the Mater Hospital on December 6th and was buried in Glasnevin Cemetery on December 8. Frances, who ran a home care service for the elderly for many years was a regular attender at many IPAV functions. She is survived by Liam and their three children Leeanne, Eve, William and their extended families. Anne O’Flahery, a pharmacist by profession, died in St James Hospital on October 23rd and was buried in Maynooth. She is survived by Eamon and their two young children, Aine and Patrick. “IPAV is very saddened by the untimely death of both ladies and our heartfelt sympathies go out to both Liam and Eamon,” said Mr. McNamara. There was a large attendance of IPAV members at both funerals. May they rest in peace. Winter Issue | page 11


Property News

Housing Minister signals new deposit protection scheme for tenants Specific proposals on the establishment of a new deposit protection scheme for all tenants are to be made at the Committee Stage of the new Residential Tenancies (Amendment) Bill, Housing and Planning Minister, Jan O’Sullivan (left) told the Dáil. Opening the debate on the Bill on November 15, the Minister said she had recently received a detailed research report on this topic that was commissioned by the PRTB and she expected that this would guide her thinking on how best to offer the greatest protection to tenants in this area at the least cost to the Exchequer. “The report flags a range of complex issues on which decisions will be required but, with careful planning, a sustainable scheme can be developed to further boost the operation of the Irish rental market,” she said. “I am hopeful that I will be in a position to make specific proposals on this matter in the context of the current Bill. I have arranged for the report to be published on the Department’s website.” The PRTB was established as an independent statutory body under the Residential Tenancies Act on 1 September 2004. The principal activities of the PRTB include the registration of private residential tenancies and the resolution of disputes between tenants and landlords as well as the provision of information, assistance and advice to the Minister on the private residential rented sector. “The PRTB has achieved much since it was established, but more remains to be done,” she said. “It is recognised that it can take a considerable time before cases are heard by the PRTB and it is essential that we supply the board with the necessary tools to reduce delays as much as possible. However, it must also be acknowledged that the number of dispute cases referred to the PRTB has grown by 25% since 2008. At the same time, staff numbers have decreased by 53% from their peak as a result of the relentless downward pressure on public service numbers.”

Approved Housing Bodies Perhaps the most significant achievement of the Bill, if enacted, she said, would be the extension of the remit of the Residential Tenancies Act to approved housing body dwellings. Approved housing bodies generally provide rental accommodation for families and persons with specific categories of need who are on the social housing list. “However, the relationship between these tenants and their approved housing body landlords is not generally provided for in either the Housing Acts or the Residential Tenancies Acts and they operate on the basis of lease agreements, the various Landlord and Tenant Acts and common law,” she said. “Formal regulation of the tenant landlord relationship in the sector lags behind the private rented sector considerably and there is an urgent need for a modern legislative basis for approved housing body tenancies. The Bill will afford the same rights and obligations afforded to landlords

Winter Issue | page 12

and tenants in the private rented sector to those in the approved housing body sector.” Fianna Fáil Deputy Barry Cowen said the number of households in rented accommodation has increased by 47% since 2006. Across Ireland, 29% of all people now rent, with 63% of these renting in the private sector; the number of people renting in the private sector had increased by a whopping 86% since 2006. “When one contrasts the statistics of the PRTB with those of the recent census, one finds a 30% discrepancy between the number of those who stated on the census form that they were renting and the corresponding figure from the PRTB,” he said. “That is worrying. It tells us there is a need to beef up the regulation, and it may tell us there is some fear of the existing regulation or intended future regulation. It tells us there are obvious problems with the regulation of the sector.”

Need for Deposit Protection scheme There is a real need for a deposit retention scheme as a vital component of any fully functioning, vibrant rental market, he said. Given the high volume of complaints brought by tenants because of the withholding of deposits, an effective scheme would have a far greater impact on speeding up the work of the PRTB than any name changing or other tinkering mentioned earlier. “A new scheme would further stabilise the rental market and bring greater certainty to both tenants and landlords, thus creating a stronger overall housing market,” he added. Sinn Féin’s Dessie Ellis said for too long renting a home had been seen as a short-term practice engaged in by younger single people or low earners, with the result that policy had not focused on creating a rental market that provides sufficiently for the everyday needs of working people.


Property News

“This has become particularly challenging for many people because of the collapse of the property market and the difficulty in obtaining loans,” he said. “People who would otherwise be leaving the rental market to buy homes are instead staying on as tenants, which drives up demand while supply remains constant. Tenants are now paying more and, in many cases, receiving less for their rent but they have limited choice to go elsewhere.”

Abolish board If he had his way, Waterford Independent Dáil deputy John Halligan said he would abolish the PRTB altogether. Although demand for the services of the PRTB is constantly increasing, the board had never lived up to its promise eight years ago of replacing the courts in most disputes in the private rented sector. “All the evidence and the facts show that,” he said. “For instance, the rules for termination of tenancies are a legal minefield. Even after a dispute has been determined by the PRTB, there is no guarantee whatsoever of compliance by either party. I am increasingly hearing of cases coming before the Circuit Court, and I am sure the Minister of State may be too, to enforce a PRTB order, adding further cost and delay to an already difficult process.” The PRTB is supposed to provide a dispute resolution mechanism in a timely manner to both landlords and tenants, said Deputy Halligan. In practice, it was taking shy of one year in some cases for this organisation to get even a hearing in place. Both landlords and tenants urgently needed a system to fast track resolutions, as was promised originally.

“However, the PRTB dispute resolution procedure rarely facilitates fast outcomes and this Bill fails to set a statutory timeframe within which a determination order should be issued following an application to the PRTB for resolution,” he said. “This is of no help to the landlord who has been left short weeks or months of rent and who is struggling to repay a buy-to-let mortgage. It is certainly of no help to the tenant whose deposit has been unlawfully withheld by the landlord, and I understand that the withholding of deposits by landlords accounts for almost three quarters of all complaints by tenants to the PRTB.” North Kildare independent Deputy Catherine Murphy said if constituents come to her with a tenancy problem, such as a tenant being unable to recover a deposit or a landlord being unable to collect rent, she advises them to go to the Private Residential Tenancies Board, but with the health warning that they should not expect anything to happen for at least 12 months. She said that was not a solution for people. “One of the biggest elements of the problem has been the nonreturn of deposits,” she said. “The setting up of a deposit scheme, separate from the board, will address this issue, but it must do so. The board has lost credibility. It is overloaded with work and the number of staff is insufficient to deal with complaints in a timely manner.” The board must have credibility, she said. People would judge it very quickly. If they find it does not resolve their problems, they will see no point in going to it.

Former IPAV President is new Re/Max Regional Director Former IPAV President Paul Gartlan has joined Re/Max Ireland. Paul will be working alongside fellow IPAV member John Fogarty as Co-Regional Director. Between them, they have over 60 years’ experience in the property industry both here in Ireland and overseas. Said Paul: “This new partnership will be working on expanding the Re/Max group by opening Re/Max franchise offices throughout Ireland, both North and South, with an emphasis on dealing with experienced industry professionals who wish to take their businesses to the next level”. Re/Max Ireland is planning to open several new franchises in the coming months with the first of these opening in Dublin and Limerick followed by Carlow with further offices in the pipeline for early 2013.

agents to ask how they can increase their market share and they feel they have the answer in Re/Max. Paul and John say that offices as far away from Dublin as Kerry are experiencing increased levels of inquiries and sales and that the problem a lot of agents have now is how to get enough quality properties on their books to meet the demand. This, they say, is where Re/ Max’s systems and strategies come in, together with the latest in technical support, top class marketing and industry leading training.

L/R Frank Polzer Chairman of Re/Max Europe with Paul Gartlan Re/Max Ireland at the recent European Re/Max Convention in Vienna

Paul and John are finding that the resurgence in the market is leading John Fogarty Re/Max Co-Regional Director Winter Issue | page 13


IPAV Certificates

IPAV Certificate in Estate Agency Practice

Photos courtesy of Brian Dempsey MIPAV DNG Stillorgan, Co. Dublin Recipients of the IPAV Certificate in Estate Agency Practice pictured at the presentation ceremony in the St Stephen’s Green Hibernian Club, Dublin on Saturday, October 20.

Julie Conway, Woodlawn, Allenwood, Naas, Co. Kildare receiving her Certificate in Estate Agency Practice from Fintan McNamara and Liam O’Donnell

Sarah Taylor, Old Bridge, Clonmel, Co. Tipperay and Emma Gill, Ballinrobe, Co. Mayo at the reception following the awards ceremony Winter Issue | page 14

Enda Murphy, Moneylagan, Longford receives his Certificate from Fintan McNamara and Liam O’Donnell.

Niall O’Hagan, Mount Anville Wood, Dublin 14, with his Certificate pictured with his father Colm, mother, Mary and brother, Hugh at the reception


IPAV Certificates

Derek Abbey, Kilkenny Road, Carlow receiving his Certificate in Estate Agency Practice

Certificate recipient Francis Larkin, Portumna, Co. Galway and his wife Margaret at the presentation ceremony

Edita Jagminaite, Woodford Crescent, Clondalkin, Dublin 22 receives her Certificate in Estate Agency Practice

Pictured at the presentation of Certificates in Estate Agency Practice were (l – r); Liam O’Donnell, IPAV President; Fintan McNamara, IPAV CEO; Paul Campbell, Kira Byrne, and Gerard Phelan, course lecturers.

Patrica Hinch, Coolmine, Saggart, Co. Dublin receiving her Certificate in Estate Agency Practice

Alan McGuineess, Beechmount Ave., Stameen, Drogheda, Co. Louth receiving his Certificate in Estate Agency Practice. Winter Issue | page 15


Property News

Oireachtas Committee Chairman seeks changes to Property Register Now that the Property Register has been established, there are some measures that could be introduced to improve it, the chairman of the Oireachtas Committee on Finance, Public Expenditure & Reform, Deputy Ciaran Lynch told the Dáil recently. When a property is sold, there is no indication whether it is an apartment, a house - whether it be an end of terrace, gable end or mid-terrace house - or the square footage involved, he said. There is no information other than its value. “When people log onto the website, as many do - it has proved to be very successful in terms of public access - all they see is a valuation of the property,” he said. “That is fine if one knows the type of property at which one is looking, but the website does not include a general scheme of the house, nor does it give the relative value.” “I propose to the Minister that, as part of the conveyancing completion process - I know the information is assimilated by the Revenue Commissioners and sent to the database - including some additional boxes to be ticked in the system would allow for an indication to be given as to whether a property is a house or an apartment and has one or three bedrooms, its square footage and so forth,” he said. “That would lend itself to allowing more accurate information to be provided and achieve the goal we want to achieve in the residential property market, namely, to ensure people are given accurate information and pay realistic prices for their homes.” In reply, Justice Minister Alan Shatter said in recent years, because of the steep downturn in the property market, it had been difficult to obtain accurate information on property prices. This uncertainty had led to a lack of investor confidence and may have contributed to stagnation in the property market, particularly among first-time buyers. “The publication of the register should, I hope, help to remove some of this uncertainty, restore some confidence in the property market and provide for some transparency in residential property sale prices,” he said. “However, it cannot solve all of the problems impacting on the property market.” “I note the Deputy’s view that other information should be included in the register such as whether a property is a house or an apartment, the number of bedrooms, the square footage, the site area and the local authority area,” he said. “It is important to note in this context that the register is not intended to serve as a property price index. In accordance with the legislation, the details made available on the property price register are limited to price, address and date of sale. They do not include such details as property size or the number of rooms.” Individuals interested in particular properties who look them up on the website have the facility to visit the area if they are not familiar with it and readily identify whether they are talking

Winter Issue | page 16

about a detached house, a semi-detached house, an apartment, a cottage, a bungalow or any other type of construction, the Minister said. The register had simply been designed to provide on an ongoing basis accurate prices of residential properties purchased on a particular date. “As I have mentioned, the information contained therein is derived from the information declared to the Revenue Commissioners for stamp duty purposes. The categories of information sought for inclusion on the register are not included in the information submitted to Revenue for stamp duty purposes. Accordingly, it would not be possible to include the information the Deputy is seeking in the register.” It may be at some future date by way of amending legislation or other statutory instrument to update the current legislation, he said. It would be possible to expand the register further and it does provide substantial additional information. “It is a website that is very popular and which has had many thousands of hits. It makes the information available readily accessible to many individuals. It is a great pity there was no such a site ten years ago.”

15,000 hits per day Meanwhile, around 15,000 people a day are looking at PropertyPriceRegister.ie, the new online register of residential property prices launched last month in Ireland.


Property News According to TheJournal.ie, almost 165,000 visitors checked out the website in its first eleven days. On Monday, October 1, the site’s first full day of operation, there were 82,398 visits to the site. The site, which provides the price, address and date of sale on all residential properties purchased in Ireland since January 1, 2010, is produced by Ireland’s Property Services Regulatory Authority. The PSRA, which was set up by Justice Minister Alan Shatter earlier this year to regulate the area, has said that the online register is not supposed to be a property price index but is

designed to “provide, on an ongoing basis, accurate prices of residential properties purchased at a particular date.” The PSRA has put up a notice saying that it does not edit the data but only publishes the figures which are filed by the purchaser’s solicitor. “The Authority acknowledges that there are errors in the data,” says the note. “Where errors are discovered or reported to the Authority they will be taken up with the Revenue Commissioners.”

Advice on rights in the EU In this issue we begin a short series of pieces on advice on rights in EU matters. They will be of interest to IPAV members and their clients. Where can you find answers to questions on your rights in the European Union? You can submit your queries to the Your Europe Advice service. Your Europe Advice is an EU advice service for the public provided by a team of lawyers who are familiar both with EU law and national laws in all EU countries. Your Europe Advice” will • provide free and personalised advice within a week • clarify the European law that applies in your case • explain how you can exercise your EU rights Your Europe Advice can also advise on problems you may have as a consumer Typical areas for enquiries are your rights when travelling, living, working, retiring or studying in another EU country and the rights of consumers within the EU. You can submit an enquiry to the Your Europe Advice service if you have questions such as: • I bought a holiday home in Portugal and am being subject to a higher tax there because I am not resident in Portugal. Is this legal? • Can I travel with my non-EU spouse to another EU country? • Can I purchase my car in the UK and register it in Ireland? • Will my son’s educational and professional qualifications be recognised in another EU country? • Can I receive my pension there? Your Europe Advice will reply to most enquiries but some types of questions fall outside the scope of Your Europe Advice and are thus ineligible, such as: • simple requests for information that can easily be found on the internet or questions on EU policies • questions without a cross-border element • questions falling entirely under national law (not EU law) • questions about getting grants or funding under European programmes • enquiries by profit oriented commercial organisations, e.g. law firms, acting on behalf of clients. Your Europe Advice cannot advise on issues governed exclusively by national law. There must be an EU law element. You can submit an enquiry online via the web form - https://ec.europa.eu/citizensrights/ or you can call EUROPE DIRECT, the EU general information service, on the free phone number 00800 6 7 8 9 10 11 from anywhere in the EU. You will receive a reply within one week. You can opt to receive your reply by email or by telephone. The service is free of charge.

Winter Issue | page 17


Member Feature

How an Art and Jewellery Gallery have teamed up to produce new synergy on Dublin’s South Frederick St.

By Tim Ryan artists in both his galleries. Business thrived as Irish people invested their new found wealth in the world of art. However, by the end of 2008, the recession had hit the art world hard and by 2009 Oliver was forced to rethink his strategy. “I knew that I had done very well with auctions in the difficult years in the1980s and there was no reason why it would not work again,” he says. “Auctions always work well in recessions.”

Auctions

Oliver Gormley with one of the pieces by sculptor Ian Pollock

Auctions work well in recessions. That is the motto of IPAV member Oliver Gormley, the proprietor of Gormley’s Art Galleries in Dublin’s South Frederick St and Lisburn Road, Belfast. Recently Gormley’s have teamed up with DESIGNYARD jewellery gallery, formerly of Nassau St., bringing fine art and contemporary jewellery into one building, No. 25 Sth Frederick St, where they have already created a whole new synergy on a street quickly becoming a popular art and foodie spot in the south city. Having experienced the roar of the Celtic Tiger in the mid-1990s, which was well reflected in the art world too, Oliver Gormley has turned to online auctions as a new vehicle to sell paintings. There is, he says, endless potential in this area and he is currently exploring new options. Born and brought up in Omagh, Co. Tyrone, Oliver Gormley left school to work in his father’s busy newsagency business in the town. From there, he quickly expanded into a number of retail outlets of various kinds across Northern Ireland. In 1986 he started his first auctions in Omagh selling general household items, antiques and collectables. Gradually he moved into art auctions and as a popular interest grew in the world of arts, he opened his first gallery on the Lisburn Road in Belfast in... Later, in 2005, he opened an art gallery on Dublin’s South Frederick St., next door to where he is today. Such was the effect of the Celtic Tiger that Oliver ceased all auctions altogether and concentrated on promoting emerging

Winter Issue | page 18

So, using his previous skills, he organised auctions in Dublin, Belfast and various hotels around the country. The success of the idea was quickly apparent. In 2010, he moved into No. 25 Sth. Frederick St., the former Headquarters of the Progressive Democrats because of the large room at the rear of the building which was ideal for auctions. And so, today, on the spot where former PD leaders Des O’Malley and Mary Harney once announced bold political initiatives, Oliver Gormley auctions the best of emerging Irish artists! Oliver’s return to auctions in 2009 had, however, one new ingredient – the internet - which was now to play a key role. While many auction houses use a combination of live auction and internet, Gormleys were the first to try internet auctions on their own. The plan has worked very successfully and www. gormleysartauctions.com is now among the favourite websites of many art lovers and investors. On 10 Tuesdays throughout the year, starting at 7 pm and running for over two hours, Gormleys auction art online exclusively. Many viewers purchase by merely viewing the piece online although viewing in advance is encouraged at both the Dublin and Belfast galleries. “It’s all about trust,” says Oliver. “Our customers know they can trust us as to the authenticity of what we sell. I never put anything up for auction unless I am one hundred per cent sure about it.” So who is selling today and popular with clients? Current leading artists include Eileen Meagher from Connemara and Eugene Conway from Kilkenny. Eileen Meagher’s landscapes are much sought after and are part of many important collections throughout the world, says Oliver. Her paintings are part of the National Collection and are hanging in many government departments. Her work also forms part of the collection in Westport House, Blackrock Clinic and the


Member Feature

In 2000 he moved to a larger premises close by on Cow’s Lane. When the former DESIGNYARD label came on the market in 2006, recognising the opportunity Gerry bought it, later merging both businesses under the DESIGNYARD brand and subsequently moving it to Nassau St where the business continued to thrive. Today the gallery stocks a wide range of jewellery from top Irish and European designers who work in platinum, gold, silver, diamonds, pearls and coloured gemstones. “Our collection includes unique engagement rings, contemporary wedding rings, occasional pieces and jewellery for men. There is a real demand for partnership rings with a difference since the introduction of civil partnership legislation, ” says Gerry Crosbie. Customers are encouraged to be involved in the design of their own unique piece with the help of the DESIGNYARD expert team. That requires a luxurious and relaxed space that befits the quality of the product, he says. And the run in to Christmas will see the business launch an exclusive new, design-your-own- ring range, by the renowned makers Henrich and Denzel. Customers will literally be able to see their own designs emerge on screen before them, adjust the stones and metals and consult with staff.

Gerry Crosbie with one of the jewellery cases in DESIGNYARD

As online was increasingly influencing this business and the corporate market - gifts, awards and presentation pieces, Gerry realised that his gallery, too, no longer required expensive high street space but a central inviting light filled space where beautiful pieces can better be displayed. A casual chat on the street in early 2012 led to the link-up with Gormleys. “Art and jewellery work perfectly, together,” says Oliver Gormley. “They produce a synergy which has created a new buzz about No 25 which you can feel when you come through the door. I think it is a logical and perfect association.” Oliver Gormley is very confident about the future. Once you believe in a project and plan your strategy, he believes everything is possible.

Australian Embassy. According to Gormely’s website, it has been said of the paintings that the smell of the turf and the roar of the water emanate from her work. Eugene Conway is one of the most well-known and respected Landscape Artists in Ireland today. Born in Dublin, Ireland he moved to Co. Kilkenny as a child. Growing up in the countryside, he developed a great love and appreciation for the beauty of nature around him which comes through in his work. Also prominent in the galleries is the work of Dublin-based bronze sculptor Ian Pollock who is primarily a self-taught artist, working exclusively in bronze. His sculptures are cast using a ‘cire perdue’ {lost wax} method in ceramic shell moulds.

Link up to Designyard As the online auction business grew Oliver found he needed less space and so the link-up with DESIGNYARD occurred. Designyard (www.designyard.ie) was the brainchild of businessman Gerry Crosbie. Having trained as an accountant and worked in a number of organisations including RTE, he moved almost by chance into the world of art and initially set up Whichcraft on Lord Edward St. in 1994.

Having sold 2,000 paintings per annum in the 1980s, he has now set a goal of selling 3,000 in the coming years. It’s a goal he is well on the road to achieving already.

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www.designroom.ie t: 01 615 4714/5 e: info@designroom.ie m: 087 2889127 Winter Issue | page 19


Property News

Secure investment right at the heart of the EU With no end in sight to the slow-motion collapse of the Eurozone, a new report suggests that, ironically, one of the safest cities for residential property investment may be Brussels, right at the heart of the EU machine. Peter Cluskey looks at the pros and cons of the Belgian capital.

We’ve become so used to wondering over the past year or two whether the euro will come to an ignominious and chaotic end one of these days that, as 2012 limps to a close, it’s almost impossible to imagine it actually happening. On that basis, perhaps Brussels, epicentre of the Eurozone “omnishambles” is one of the safest places to look for property value? “The Eurozone has subsided into an always-with-us simmering mess”, says Professor Patrick Minford of Cardiff Business School. “We are witnessing a prolonged battle between the political objectives of the euro-elite and the political objections of the suffering masses, and it’s anyone’s guess which way this will go. But either way, the Eurozone will perform weakly to poorly over the next few years.”

The Cinquantenaire building in Brussels The report says that since the onset of the financial crisis in 2008 the Belgian residential property market in general has performed “relatively robustly, compared with other property sectors and residential markets in similar European countries.”

That about sums it up. Despite hopes that 2014 might bring some economic ease, more realistic forecasters are now suggesting the end of the tunnel may be five more painful years away. Nothing daunted, the EU and its Brussels-based bureaucracy are looking remarkably rosy-cheeked – despite some rather half-hearted skirmishes with poorer member states about the 2013 budget.

Here’s its broad assessment: “While the historically low longterm interest rates would usually be expected to help buyers to increase their disposable incomes, the general economic climate and lack of confidence, in combination with the stricter credit policies of banks, have led to many buyers postponing their purchases. As a result, the behaviour of owner-occupiers has changed, as they take more time to compare the quality and price of dwellings.

The reality? The 2012 budget for the 27-nation bloc was a princely €129.1 billion, an increase of 1.9 percent on 2011. Now, for 2013, it’s looking for €137.9, an increase of 6.8 percent in the most difficult economic climate since World War 2. The European Council – the 27 heads of state – has proposed a compromise at 2.79 percent. The talks collapsed in November, but, as ever, a deal will eventually be done.

“On the other hand, we have noticed a dramatic increase in demand from private investors, who have bought residential property as a refuge from the still highly volatile financial markets. Overall, this balance between owner-occupiers withdrawing from the market while investors increase their activity has led to a stable year, with average price increases being slightly higher than the rate of inflation.”

Which only goes to show that no matter how bad things get in Ireland or Greece, Spain or Portugal, with rising unemployment, stagnant growth and imploding public services, Brussels will always look after itself and its 25,000 European Commission employees. That’s why, if you or a client are looking for a safe corner in which to bunker down and invest in bricks and mortar, it’s probably up there with the best European bets – after the leafier suburbs of London, Paris, Frankfurt and Amsterdam.

While the deadpan tone of the report would do credit to the maze-like corridors of the Commission itself, the suggestion that Brussels has “performed robustly” and is experiencing a “dramatic increase in demand from private investors” is high praise indeed given the lack of realistic options in the middle to upper-middle market.

2012 Brussels 2012 Brussels, a recent residential market report for international investors, agrees. The average price of luxury new-build apartments in the Belgian capital was a not-unreasonable €2,670 a square metre during the Summer, and so interest from private investors of a range of nationalities has been, and remains, high. The Grand Place in the centre of Brussels Winter Issue | page 20


Property News

A quick look around the market reveals some interesting possibilities. The Trevi Group for instance – trevi.be – has apartments starting from €89,000 for a 37-square metre studio with separate kitchen in Evere, six kilometres north-east of the city centre, and one of the districts to which the Commission has been decentralizing since 2004.

Notting Hill style Schaerbeek is another interesting district. The eastern part, near Vergote Square, the Quartier Diamant, and Parc Josaphat, is close to the EU institutions and has been described as having an up-andcoming “Notting Hill style,” with reasonable family-friendly property prices. Here you’ll find a 38-square-metre one-bedroom apartment, built in 1990, on the market with an asking price of €119,000. It needs total refurbishment inside, but it’s near both the European Commission and NATO, it has two small balconies, and it’s ideal as a short-term let for business clients – the sort of market that does very well in Brussels. In the same district, a 60-square-metre apartment costs in or around €165,000, an 88-square-metre two-bed perfectly kitted out for renting has a price tag of €201,000, while a 107-squaremetre three-bed new-build, due to be completed next year, has an asking price of €255,000 – still good value given that it’s on the ground floor, with an eight-square-metre terrace and a 76-squaremetre garden. Ixelles, home to the Université Libre de Bruxelles, is in the southeast inner suburbs and is an interestingly mixed location, from the shopping streets around Porte de Namur, to the greenery around the Abbaye de la Cambre, a former Cistercian abbey dating back to 1196. The section around Place du Châtelain has become particularly trendy, with its cobbled streets, bars, and artisanal farmers’ market. What do you get here? Well, actually quite a lot for your money. For €399,000, Trevi has a 114-square-metre three-bedroom apartment in the Quartier Luxembourg, in an attractive modern block built in 2005. It has a small terrace, as well as that most sought-after accessory, a parking place, and it’s ready to move into. Prices rise pretty rapidly though. Immobilière Jacques Bonnivers has an attractive three-bedroom duplex with parquet floors close to Place du Châtelain for €625,000. And if you’re looking for something really special, €895,000 will bag you a 155-square-metre three-bed penthouse apartment, with a lift, two parking spaces and a decked terrace of 140 square metres with fantastic views across the city. Currently, residential property is selling for €2,404 a square metre in Evere, €2,467 a square metre in Schaerbeek, and €3,462 a square metre in Ixelles – while the most expensive of the 19 communes in the city is Woluwé-Saint-Pierre, where prices hit €3,890 a square metre. Interestingly, the difference in prices between the cheapest and most expensive areas continues to widen. This indicates that not alone is there a continuing flight to Brussels property, there’s a flight to quality Brussels property.

Go upmarket in Uccle! It’s not the most expensive district in Brussels, but it is arguably the most up and coming: it’s called Uccle, pretty much directly south of Brussels Midi railway station. It’s a green and comfortable suburb, it adjoins the Forest of Soignes, one of the most popular recreational areas of the city – and with average property prices coming in at €2,994 a square metre compared to €3,462 for Ixelles directly to its north, it’s pretty decent investment value too.

Bernard Arnault, LVMH

That was underlined to the delight of local estate agents recently when one of France’s richest men, Bernard Arnault (63), boss of the luxury goods group, LVMH – Louis Vuitton Moet Hennessy – bought a quite large “pied-à-terre” there for an undisclosed sum.

According to Forbes magazine, Arnault is the richest person in Europe and fourth-richest in the world, after Mexican telecoms magnate, Carlos Slim, Bill Gates, and, in third place, Warren Buffet. Arnault had a net worth of $41 billion as of last March. So you can see why he’s been good for the area – and why he has already been personally welcomed by the mayor of Uccle, Armand de Decker. As a result, there’s been a rush of interest from other French buyers anxious to avoid Socialist President, François Hollande’s new 75 percent marginal tax rate on earned income over €1 million a year – just as there was in 2006 when Hollande’s ex-wife, Ségolène Royal, seemed on the verge of taking the top job and proposing something similar. High-end estate agents, Emile Garcin, for instance, are currently marketing a luxurious €2.7 million property on Avenue Molière, one of the smartest streets in the neighbourhood. “I’ve had ten viewings so far, and all have been people from the Paris region”, says Hélène Van de Velde. For those with an interest in all things French, Uccle is home to the city’s French lycée, and is a long-time favourite with French expats moving to Brussels to work with the EU or other international organisations. Believe it or not, one in ten local residents is French. The good news is that property here needn’t always be in the multi-millionaire or even multi-billionaire category. Estate agents, Trevi, have a 120-square-metre two-bed apartment, built in 1960, for €225,000. Although it needs modernisation, it’s in a green area near the Royal Observatory of Belgium, it has two small south-facing terraces, and a garage can be yours for €20,000 extra. Further upmarket, Lux Residence has a modern four-bedroom house, near the forest, for €625,000, while Best Home Consult is marketing another four-bedroom, this time a 260-square-metre penthouse, for €1.1 million. Above that, there’s plenty more. There are, quite literally, properties in Uccle to suit every pocket. Now, while the market is probably as low as it will get for years to come, is the time to snap them up.

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Property News

Property assets need new approaches

Various new approaches to the effective, yet cost-controlled, management of property assets in today’s continually changing environment was the focus of a national conference held in Dublin by the IPFMA (Irish Property & Facility Management Association). Leading experts from both Ireland and the UK looked at some totally new approaches in commercial property and facility management at the one-day event, themed ‘Property: A New Approach’. In particular, they spoke about the vitally important area of managing assets effectively, in the context of the current ill health and poor growth prospects of the Irish economy. The keynote speaker was IBEC chief economist Fergal O’Brien, with IBEC director general Danny McCoy also addressing the 160 conference delegates.

Pictured at the Annual Conference of the IPFMA (Irish Property & Facility Management Association), ‘Property: a New Approach’, in the Croke Park Conference Centre were (from left): Fintan McNamara, Chief Executive IPAV, Fiona Barron, Chief Executive IPFMA, Tom Dunne, DIT Bolton Street, and Ciara Murphy, Director General SCSI.

Speaking at the conference, Vincent Hickey, IPFMA vice-chairman, said that “like all property professionals, property, asset and facility managers are now practising in not only challenging, but constantly changing times that require new approaches to be effective”.

In his address ‘Can Old Buildings be Green Buildings?’, architect Dawson Stelfox said that “there is a strong tendency amongst building owners, managers and property professionals to regard old and historic buildings as expensive to run, maintain and operate, low in energy efficiency, damp cold and draughty”, resulting in neglect, disuse and decay of the buildings, the loss of cultural and architectural heritage and the degeneration of communities.

“The ongoing and relentless pace of change, coupled with the continued need to keep costs under control, require us to look at areas of operation totally afresh”, he stated, adding that “the expectations of property asset owners demand that greater efficiencies be achieved, cost savings made and innovative solutions be found”.

“The alternative view is that it is perfectly possible to carefully upgrade (retrofit) existing buildings to modern energy efficiency expectations, whilst retaining their historic character and, in so doing, retain their embodied energy, avoid waste going to landfill, and keep intact the sense of community and identity which built heritage represents”.

One significant area was the new costeffective methods in the construction and management of ‘green’ buildings. Dawson Stelfox, chairman of Consarc Design Group and director of Consarc Conservation, told delegates that, indeed, old buildings can be made to be ‘green’ buildings.

Mr. Dawson said that retrofits are by no means easy, but they are achievable. He pointed out that at any one time the vast majority of the building stock is existing buildings.

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“So, if meaningful improvements are going to be made to overall energy

use, then the focus has to shift towards retrofitting measures as against new construction. Around half of all construction spend is on refurbishment, repair, conservation and maintenance, yet the emphasis of training and education in the construction sector is on new design and construction”, he stated, saying that the training of building professionals and contractors is not relevant to the work they will actually be doing. Commenting on issues on the procurement of materials, he said that local stone is now being increasingly used on buildings and public landscaping works. “Yet our high quality local stones are rarely used, with most stone now imported from China or India,” he said. “Use of local stone keeps the money in the local economy and creates or protects skilled labour”. The IPFMA conference, the 10th to be held annually, was chaired by John Brophy, chairman of the Association of Shopping Centre Managers and an IPFMA board director.


Property News

Big Wind Energy Plans in The Midlands

Two wind development companies Element Power and Mainstream Renewable Power plan to build several hundred turbines in the midlands. The electricity produced will be exported, to assist the UK achieve EU renewable energy targets. In this article, Thomas Ryan, IFA’s Environment & Infrastructure Executive, sets out the background driving both projects, summarises the outcome of IFA’s negotiations with both companies and provides some practical advice for valuers who are asked to represent landowners. Element Power, as part of their Greenwire project, intends to generate over 3,000MW of renewable energy from 40 separate wind farms. Mainstream, as part of their EnergyBridge project, plans to generate 5,000MW of renewable energy. Both companies recognising that the Irish wind energy market has reached saturation point in the short term, are developing their projects to export energy to the UK. Currently 5% of the UK’s power is generated from renewable sources, and they are struggling to achieve their obligation to increase this threefold to 15% by 2020. Turbines will need to be constructed and generating energy by 2018, to ensure the 2020 opportunity is achieved. Over 1,400 landowners will be impacted by these projects. Construction of these turbines will mainly take place in Laois and Offaly, but also in Kildare, Meath and Westmeath. IFA negotiated changes to the option and lease agreements, which will result in a better balance between the rights of farmers and the entitlements of the development companies.

The main outcomes of the IFA discussions are: • Annual payment during the option period of €1,000. • Minimum annual lease payments of €6,000/MW or €18,000 per turbine. • Payment of 3% of energy price and green credits up to year 15, rising to 5% thereafter. • Forestry o Full compensation paid for grants/premia paid and remaining to be paid. o Wind development company to take on full replanting obligations. o Landowners will receive full crop rotational value for any felled forestry. • Agricultural schemes o Full compensations for any losses in REPs, Area Aid and/or Single Farm Payment. • Consultation regarding location of access roads. • Payment on receipt of planning - €10,000 to €18,000. Valuers acting for landowners, should use these changes negotiated as a benchmark wherever wind developers are seeking to build turbines, get wayleaves or construct access tracks to turbines. Other areas which valuers should consider when advising landowners include: limiting the option period, seeking an additional payment if turbines are replaced with higher output turbines during the lease term, limiting the right of renewal of the lease and eliminating any entitlement of the wind developer to assign or transfer the option agreement. Always advise landowners to seek independent legal advice from solicitors that have experience in wind option and lease contract law.

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Fine Art Feature

Woven Treasures Well-known specialist in Fine Antique Carpets & Rugs Peter Linden writes on the wonders of woven carpets, and the pitfalls would-be collectors should avoid. Carpet weaving is an ancient craft. It has its origins in Central Asia. The oldest piece known, the Pazyryk carpet, kept in the Hermitage Museum in St Petersburg, dates back to 500 BC. However, its structure and quality proves beyond doubt that the craft was well established at that time, suggesting that carpet weaving dates back over many thousands of years. The technique used in the Pazyryk carpet remains basically the same to this day, although there have been many changes for the worse over the past century. To the layman, the world of Oriental carpets may seem both mystifying and confusing. Why, on the one hand, is there a regular occurrence of “Closing Down Sales”, “Liquidation Auctions” and constant 50-70% discount offers while, on the other hand, spectacular prices are paid for certain rugs at international auctions? This article will try to explain the basic difference between genuine Oriental carpets and mere commercial merchandise. All handknotted Oriental carpets contain three elements: the warp, the weft and the pile. The warp runs the length of the carpet and appears at each end as the fringe. The weft runs across from the warp, over and under in a continuous loop making a start at the bottom end in what is called the kilim. Its purpose is to prevent the rug from fraying and breaking up. The pile is made up of horizontally hand-tied knots of yarn, cut at the front to form a piled surface. The wefts are packed in between each row of knots to secure them. Gradually the rug grows upwards on the loom until it is finished with a kilim end, after which the rug is cut down from the loom. The amount of work involved is considerable. A skilled weaver may work at an average speed of 5,000 knots per day, yet she may require around 250-350 working days to complete a typical 7’ x 4’ Kashan or Tabriz rug. Smaller rugs are often the work of one weaver; larger carpets can be a team effort involving 2-4 women. Most Oriental carpets have knot densities of 100 knots per square inch upwards, some reaching 4-500. As a result, even a fairly small village rug takes many months to complete.

Two types There are two fundamentally different methods of designing, or “drawing”, an Oriental rug. Let us start with the “freestyle” group, i.e. rugs woven purely from memory, without the aid of a pre-drawn cartoon. Here, the weaver and the artist are one and the same, each knot being woven from a plan in her head but not written down. The result is a truly unique creation, unlike anything she will ever weave again, since no human mind can remember the exact placement and sequence of several hundred thousand knots. “Freestyle” rugs were woven by migrating tribes and “primitive” village weavers who made

Winter Issue | page 24

their rugs for barter purposes, gifts or dowry. The rugs contained soul, originality and charming spontaneity, reflecting the weavers’ culture, environment and artistic skills. Rugs within this group were woven by the main Persian tribes such as the Avshari, the Quasq’ai, the Khamseh etc; other rug weaving tribes included the Turkoman, the Baluchi and the Kurds. Virtually all of the above have now settled into sedentary lifestyles, losing most of their tribal culture in the process. Many tribal weavers still weave rugs for a living but in most cases they work in workshops or factories, to sterile and predictable designs which bear little resemblance to the beautiful originals. Most experts agree that few, if any, truly tribal rugs have been woven since the 1920s. The other group, representing 99% of rug weaving today is comprised of rugs woven from cartoons. Originally, this group was made up of the rugs woven in the main Persian weaving towns such as Kashan, Isfahan, Kerman, Tabriz and Meshed. More recently the group has come to include the vast majority of all Oriental Rug weaving, bar a few notable exceptions such as the famous DOBAG project in Turkey. In cartoon weaving, the designer and the weaver are separate people. The designer draws the rug, knot by knot, in coloured dots on graph paper, enabling him to achieve perfect symmetry and balance in every detail. This slow and skillful work traditionally accounted for a large portion of the cost of the finished product since only one, or one identical pair of rugs, could be woven to the same design according to established ethics and tradition. Following the increase in post-War commercial demand, this code of ethics had to be compromised to save cost. From then on, designs began to be copied, making it possible to make as many rugs from one design as you have weavers to make them. Overnight, the Oriental rug was no longer a unique work of art. Instead it became a mass-produced, albeit handmade, furnishing commodity. Today the cruel reality is that most rugs are designed by computer, from special software, meaning that you can create an infinite number of rugs from a particular cartoon. An original Oriental rug may be compared to an original painting, and a mass-produced factory rug to a print. It is unsurprising, therefore, that an original, pre-commercial rug is worth a lot more than a modern, mass-produced copy. Another key factor is the type of dyes used. In the past, only natural dyes were used for wool dyeing. For generations specialist dye makers had perfected the art of dyeing blues with indigo, reds with madder and cochineal, yellows with camomile and weld, browns with gall apples, etc., etc. The trick was to dye the wool so well that the colours would not fade in light, nor run in water, no matter how long the


Fine Art Feature

rug was exposed to light, or how many times it was washed. The dye masters had memorised the ancient, and secret, recipes and could dye wool to perfection. However, they had a monopoly on the market and they charged a healthy price for their services.

Synthetic dyes Around 1870 the first synthetic dyes began to appear in Oriental rugs. They were welcomed by the merchants and weavers because they were cheap, freely available and easy to use. The negative aspects of synthetic dyes only became known to the Oriental merchants many years later. Western importers complained of the new colours fading and running, causing the Persian government to issue severe penalties for handling the worst of the new dyes, especially those based on aniline. However, it was already too late; the old dye masters had quickly been put out of business and had taken their secrets with them. Over a short time, the ancient skills of natural dyeing had become lost, leaving merchants with no alternative but synthetic dyes. By 1940 the use of the new dyes had reached all regions, even as far south as the town of Kerman. The synthetic dyes were there to stay and today, with the notable exception of natural dye projects like DOBAG in Turkey, almost all dyes are synthetic. Admittedly some synthetic dyes are better than others, but none compares with, or performs like, original natural dyes.

The genuine article Let us now focus on the genuine article: the rugs that really matter to the buyer wanting something unique, beautiful, useful and value-retaining. Not all old and antique rugs have a high value just by virtue of their age. The rug must still have an attractive design, have well-matched, beautiful colours and be in acceptable condition. Obviously, if a rug has spent some 100 years on the floor it will show some wear and tear. Slight and evenly spread wear can be acceptable, as long as it hasn’t exposed warps. Minor restoration is also acceptable provided it has been done well, in sympathy with the texture, colour and design of the rug. Large areas of wear, reduced borders, fragile foundation, severe colour run, extensive restoration and camouflage paint to disguise wear are unacceptable. Unfortunately most old rugs have one or more of the above problems, reducing the really appealing rugs to a very small number. Few people in their right mind would dream of selling an old Oriental rug in good condition. In the East, good rugs are rarely used on the floor – instead they are hung on walls or stored away from traffic, handed down from one generation to the next – hence the term “heirloom”. Unless a family is in dire financial straits, it would only consider selling pieces from their collection if they were given irresistible offers. All these factors have resulted in a severe shortage of good pieces in the marketplace. The countries of origin (Turkey, Iran, Afghanistan and Russia) are “sold out” – their stocks of good old rugs have long since been exported to the West. Auction rooms are either filled with worn-out pieces way beyond the point of rescue, or else they offer large numbers of ugly, late

and otherwise unsaleable merchandise, supplied regularly from dealers who cannot dispose of them in their shops. For all the above reasons, a really good, old example will carry a respectable price tag. There are many highly collectable Oriental rugs that would be within comfortable reach of most aspiring rug collections. You can still buy a perfect, top quality antique Baluch rug for €1,100 -€1,800. Other rare tribal rugs like Avshars and Luris can be purchased in perfect condition, from €1,800. Early tribal bagfaces, hugely collected in the USA, are available for €350 €950. A perfect Persian town rug from the 1930s, such as a Kashan or Isfahan, can be yours from €4,000. For early, rare tribal and Caucasian rugs you may have to pay a little more, say around €4,500 to €12,500. However, look at them as the work of art they are and they suddenly seem very reasonably priced indeed. Finally, remember that the Oriental rug business is extremely complex, full of traps and pitfalls. If you only buy Oriental rugs as souvenirs while on holiday, or as buy-andthrow-away furnishings, it doesn’t matter where you buy them, as long as you are comfortable with cost. However, if you want to invest in genuine, old rugs while they are still available, you are strongly advised to strike up a relationship with a reputable dealer. He or she will already have done the extensive fieldwork of sourcing, vetting and certifying the pieces, ensuring they are in good condition and priced sensibly. He or she will let you try rugs in your home before deciding to buy, and will offer to exchange or trade in your rugs at purchase price levels. You will not find collectable rugs while on holidays in Turkey, or in the perpetual “Closing Down Sale” shops in High Street locations. Nor will you find them in travelling auctions, “liquidation sales” and the like. There are very few established dealers that specialise in old and antique pieces, but they are the ones you should consult. They will never have “sales” but they will stand over their pieces and offer you the essential back-up services like washing, restoration and exchanges. The annual HALI Carpet Fair at Olympia in London in June is also worth visiting – it will give you an idea of the scale of international rug collecting. It will also show you that the quality and value of what is on offer in Ireland compares very favourably in the international marketplace, where these exquisite treasures can be sold for several times above the asking price here.

Peter Linden Dalkey, Co. Dublin Tel: (01) 2350039 email: lindorient@gmail.com website: www.peterlinden.com

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In the Dáil

In the Dáil……. The following is a selection of written Dáil replies to TDs in the new Dáil on topics of interest to auctioneers and estate agents: Commercial Rates

Household Charge

Deputy Peadar Tóibín (SF, Meath West) asked the Minister for the Environment, Community and Local Government if he will outline any proposals currently being developed by him to ensure that the commercial rates of a business reflect the ability of a business to pay.

Deputy Joe Higgins (SP, Dublin West) asked the Minister for the Environment, Community and Local Government the number of waivers granted so far for the household charge.

Minister for the Environment, Community and Local Government (Deputy Phil Hogan): I have no immediate plans to amend the legislation governing commercial rates. Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by the independent Commissioner of Valuation under the Valuation Act 2001. The Commissioner for Valuation has sole responsibility for all valuation matters , including the most appropriate method of valuation. The levying and collection of rates are matters for each individual local authority. It is important to acknowledge that commercial rates, as a local tax, and the rating system generally are deeply embedded in the local government system. A large body of case law is well established and local authorities and ratepayers are, in the main, very familiar with, and generally accepting of, the operation and practice of the rating system. Rates are also a stable source of financing for local government which is not affected unduly by short-term changes in economic circumstances. A property-based tax such as rates has a distinct advantage over any tax based on profits or incomes as it is generally found to be easy to collect and difficult to evade. A system having regard to economic factors on an ongoing basis would create uncertainty by providing for continuous change to the valuation base. Such a system would not provide a stable basis for funding local government and would require significant additional resources to operate.

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Minister for the Environment, Community and Local Government (Deputy Phil Hogan): The Local Government Management Agency is administering the Household Charge system on a shared service/agency basis for all county and city councils. I understand, from data provided by the Agency, that as of 18 October 2012 the number of Household Charge waivers which have been registered is 21,140. As the Household Charge system records one owner entry per property, which may in some cases be joint names, definitive information is not available concerning the number of housing units which have been registered to multiple accounts. I understand, again from data provided by the Agency, that as of 18 October 2012 the number of accounts to which more than one unit has been registered for the Household Charge is 744.

Pyrite Panel Report Deputy Bernard J. Durkan (FG, Kildare North) asked the Minister for the Environment, Community and Local Government the extent to which progress is being made to address the ongoing issue of pyrite; if the full extent of the problem is being identified, quantified or costed; if he has studied the points raised by the Pyrite Action Group with a view to identifying a financial structure and a comprehensive plan to deal with the issues arising with particular reference to the need for the adoption of a fully integrated system to deal with issues in order that householders can be reassured and that the financial impact on them can be minimised by way of home bond or other insurance provisions. Minister for the Environment, Community and Local Government (Deputy Phil Hogan): The independent

Pyrite Panel submitted its report to me in late June 2012. The comprehensive report contains twenty four inter-related recommendations which are well researched and underpinned by a broad consultation process. The report provides a framework to make progress towards quickly providing solutions for homeowners and that is now my focus. The Pyrite Panel included a detailed Implementation Plan in its report identifying the bodies with primary responsibility for implementation of the various recommendations. I will be working with those bodies identified in the Implementation Plan to achieve progress as quickly as possible. A number of the recommendations in the report pointed to the need for constructive engagement by stakeholders to provide solutions for affected homeowners. Following receipt of the report in June I requested the key stakeholders to urgently consider the relevant recommendations in the report and respond to me with their proposals for an industry led solution by the end of September. I have now received responses from all stakeholders and, while they do not include any definitive proposals that would provide a voluntary solution for homeowners, they do provide varying levels of detail as to how the pyrite problem may be resolved and some have offered to actively participate and engage in any structure that might now be established to progress the issue. I have made it abundantly clear that, in the absence of credible proposals from the stakeholders, I would impose a solution along the lines recommended in the pyrite report in relation to the establishment of a resolution board funded by a mandatory levy on industry. I have now asked my Department to finalise arrangements and terms of reference for the establishment of the Resolution Board as quickly as possible and to engage with the relevant stakeholders in finalising these details. This will give a final opportunity for all those directly or indirectly involved to play a key role in the remediation programme and to contribute to the cost of its resolution. However, if this is not the case I will ask Government to sanction the necessary


In the Dáil

steps to impose the type of levy as recommended in the pyrite report and in that way to provide finance for the resolution. Work is also progressing on the implementation of a number of other recommendations in the report. I have asked the National Standards Authority of Ireland (NSAI) to develop a testing and categorisation protocol to facilitate the categorisation of dwellings and a method statement for remediation work and I understand that this work is progressing. Recommendations in relation to the development of a mandatory certification system for buildings and a registration process for builders are currently being progressed under the Building Control Reform programme. The Pyrite Panel undertook a desktop study, in conjunction with stakeholder consultation, to establish facts in relation to the potential exposure to pyrite problems. The information was gathered from a number of sources and was cross referenced to verify, as far as practicable, its validity. Seventy four estates with 12,250 ground floor dwellings were identified to the Pyrite Panel. Of these dwellings, the Panel understands that approximately 850 dwellings currently have a claim with a guarantee provider and a further 1,100 dwellings have already been remediated or are in the process of being remediated, leaving the remaining 10,300 ground floor dwellings as the estimated future potential exposure to pyrite. However, it should be noted that in the case of 23 estates (included in the figure of 74 above), with 3,250 ground floor dwellings, there are no claims with structural warranty companies or no other evidence to support the view that they may have pyrite problems. Those figures represent the position as of March 2012 and, taking cognisance of the methodology used to conduct the study and the rate of presentation in Ireland to date, I am reasonably confident that the figures given represent the extent of potential future exposure to pyrite. The typical cost of remediation for an average house, as quoted to the Panel by those who had undertaken a significant amount of this work, is approximately €45,000.

The Pyrite Panel recommended the categorisation of dwellings by testing to determine appropriate approaches to remediation. It further recommended that only dwellings categorised as red, where there is significant damage due to pyritic heave, should be remediated immediately, dwellings with no significant pyrite damage to be monitored and only remediated if they exhibit pyrite damage. The Panel considered that it would be unreasonable to remediate dwellings which were not exhibiting pyritic damage. I believe this is a sensible and practical approach to prioritise the remediation of pyrite damaged dwellings. The costs of remediating pyrite damaged dwellings must fall to those stakeholders who are deemed to be responsible for the pyrite problem and who are so identified in the pyrite report. I will do what is necessary to ensure that effective solutions are provided for affected homeowners as quickly as possible.

Mortgage Arrears Deputy Aengus Ó Snodaigh (SF, Dublin South West) asked the Minister for Finance if consideration will be given to limiting the granting of a financial licence to financial institutions selling mortgages and related property products that they have to partake in State run mortgage relief schemes such as the mortgage to rent scheme. Minister for Finance (Deputy Michael Noonan): The Deputy will be aware that last October the Government published the Report of the Inter-Departmental Working Group on Mortgage Arrears (“Keane Report”). The ‘Keane Report’ recommended, as one of a range of measures that could be deployed to assist distressed mortgage holders, the introduction of a mortgage to rent scheme for appropriate cases. The Minister for Housing and Planning formally launched the mortgage to rent scheme on a nationwide basis at the end of June 2012. It is now one of the options available in appropriate cases in the roll-out of the lender’s Mortgage Arrears and Resolution Strategies. Regarding the licensing of banks the inclusion of conditions on such

licences is a matter for the Central Bank under the Central Bank Act, 1971.

Building Regulations Deputy Clare Daly (Ind., Dublin North) asked the Minister for the Environment, Community and Local Government the remedies available to the growing numbers of homeowners whose properties are a fire hazard and are in breach of fire regulations. Minister for the Environment, Community and Local Government (Deputy Phil Hogan): The resolution of problems arising between building owners and builders is a matter for the parties concerned, namely the building owner, the relevant developer and the builder’s insurers. Where the construction of a building is the subject of a contract between the client and the builder enforcement is a civil matter. Enforcement of the building regulations is the responsibility of the 37 local building control authorities. The authorities are empowered to carry out inspections and initiate enforcement proceedings, where considered necessary. In addition to prosecution on indictment in the Circuit Court, building control authorities may also bring summary prosecutions for building code offences in the District Court and have wide powers to make application to the High Court to secure Orders where buildings do not comply with the requirements of the Building Regulations. Failure to comply with the requirements of the Building Regulations where a successful prosecution takes place may result, on summary prosecution, in a maximum fine of €5,000 or imprisonment for a period of up to six months or both. A further fine of €500 in respect of each day on which the offence is committed after summary conviction can also be applied. A successful conviction on indictment may result in a maximum fine of €50,000 or imprisonment for a period of up to two years or both. Apart from their powers under the Building Control Acts, local authorities also have strong enforcement powers available to them under the Fire Services Act 1981 when acting in their capacity as fire authorities.

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The Last Word

Light at the end of the tunnel By Peter Brady, Chairman, IPAV Education Advisory Committee

One of the issues arising out of the establishment of the Property Services Regulatory Authority (PSRA) is that of educational qualification. While many recent entrants to the profession satisfy the basic requirement of a Level Six award and others have benefitted from the ‘grand fathering’ approach, there are many who may not be in a position to apply for a licence because they do not have a relevant qualification, or may not be eligible to qualify under the grand fathering scheme. The problem may become more serious as time goes on. There are routes to qualification but these can be time consuming and demanding when trying to run a business. In addition, very often applicants for such courses may have a wealth of practical experience in the subject matter of the course and thus a further problem arises – lethargy. It is difficult to sit through lectures when the practical application of the theory is one that the listener has in abundance. Very often, this fact can give rise to a dismissal of the theory on the grounds that it may not bear any significance to practice – especially when it comes to the finer details of procedure. The reality being that theory guides practice and does not replace it. Indeed, theory can often be impractical to implement in real practice for any number of reasons.

Recognition of Learning It is appropriate that there is a movement in education to recognise a person’s experience in the context of education. The Recognition of Prior Learning (RPL) is a term applied to describe the means by which a person’s learning can be recognised when applying for a course of study. RPL recognises that learning can be both formal (linked to awards and qualifications) and informal (learning gained through work and life experiences). This latter form of learning can be problematical and there are those who

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have their reservations about the entire concept. But as mentioned above, and discussed in this column on another occasion, what is theory if it is not a guide to practice? If the equation places theory and practice on an equal plane, then surely it is not impossible to measure practical experience in a manner similar to the way we measure academic learning?

If an applicant seeks an exemption from a particular module, it stands to reason that the submission will be relatively brief. If however, it is a case that an applicant wishes to apply for more than a single module the workload will increase proportionately.

Outcomes

A key factor in assessing prior experiential learning is to examine learning outcomes against competencies. Competency may be defined as knowledge, skills, attitudes and personal qualities essential to professional practice. Module learning outcomes, therefore, aim to build these qualities in the learner – a process whereby theory translates into practice and guides it. The logic of the RPL system is that this can be worked back. The learner can show through life and work experience that s/he has developed the knowledge, skills, attitudes and personal qualities to match the learning outcomes and thus can be credited with the learning.

In Higher Education Institutions, courses are composed of modules (subjects) with specific learning outcomes which are adjudged to be the basic levels of learning to be achieved. In attempting to gauge a person’s past experiences it is convenient to use this mechanism to measure his/ her learning in an informal context. If it can be demonstrated that the applicant for any course of education and/or training can fulfil the requirements of the modules on offer i.e. that s/he can demonstrate that the learning outcomes have been achieved through practical life and work experience, then surely it is only right that exemption from studying the module(s) should follow. In this way, those wishing to acquire qualifications can use previous learning to obtain a qualification without the tedium of repeating what has been already learned.

Rigour Lest you may be thinking this is some kind of cheats’ charter, it is important to note that the entire process of assessing prior learning is subject to rigorous negotiation between the parties at the outset, involving a formal application and interview to determine if indeed there is a case to be made for the recognition of experiential learning. Very often what the applicant may consider sufficient is not, in fact, the case. Once the application is processed however and approval is given, it is then the learner will start work on a portfolio that will be as challenging as the formal learning from which exemption is sought. Very obviously the more exemptions sought, the greater the work to be undertaken.

Competency:

Practical This particular method of assessing learning provides a very interesting dimension to the traditional view of education which understood it to take place in formal settings only. By developing a system where the individual can assess his or her own learning in a controlled environment, it may now be possible to make choices about professional and personal development without the pressure or constraint of time. The RPL model places the learner in control of the pace of learning and most of all the benefit of a practical approach to learning is that it makes the learner feel less helpless.


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