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property THE MAGAZINE OF THE INSTITUTE OF PROFESSIONAL AUCTIONEERS & VALUERS

The

WINTER 2007

PROFESSIONAL

RADICAL STAMP DUTY CHANGES IN BUDGET 08

NEW CODE FOR AUCTIONEERS PUBLISHED

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contents W E L C O M E

T O

T H E

P R O P E R T Y

P R O F E S S I O N A L

Welcome to the winter 07 edition of the Property Professional. Another year has come to an end almost and it is an opportunity for us to reflect on the very changed environment in the property industry that has occurred since this time last year. We are now clearly in a period of consolidation when market supply must be reduced to meet market demand. Given the continuing amount of immigration and our increasing population, I do not believe this is as big a gulf as some commentators would have us believe. But it is without doubt a challenging environment for all members and we must meet it head on. The very welcome changes to stamp duty in the recent Budget coupled with the many recent property revaluations will, hopefully, have a very positive effect on the market in the months ahead. There are now significant financial benefits to home buyers and investors from this Budget, and it is by flagging these hugely beneficial financial savings, that agents will help home buyers to take advantage of the lowest property prices in Ireland for a long time. It is now up to us all to actively promote the market in every way possible and to continue this positive approach when advising buyers of the real property value that is now available. Fintan McNamara

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 Website: www.ipav.ie CEI Website: www.web-cei.com

It was with this in mind, that IPAV organised Autumn seminars with the emphasis on running an efficient business and making the most of your skills in a market downturn. I hope those of you who attended found the events useful and beneficial. November also saw the opening of the new offices of the National Property Regulatory Services Authority in Navan and the launch of its website www.npsra.ie. The Director Designate, Thomas Lynch, has written to all licensed agents and has sent them a copy of the Code of Practice. I would urge you to register with the Authority and to monitor the website on a regular basis. 2007 was also a milestone in our education programme as we saw the launch of a new degree course in association with Athlone Institute of Technology. The first year students are well settled in at this stage and have told me they are enjoying the course immensely. I would like to thank you, the members, for your support to date and hope to meet as many of you as possible again in the coming year. I am always delighted to hear your views and you are welcome to drop in to No 129, Lower Baggot St at any time. Finally, on my own behalf and on behalf of the staff at Head Office may I wish you all a Happy and Peaceful Christmas.

Fintan McNamara Chief Executive Chief Executive Officer Fintan McNamara M.Litt. Dip. L.S. MIPAV(HON)

Editor Tim Ryan Tim Ryan Communications Tel: 01 662 5676

Advertising & Design Designroom info@designroom.ie Tel: 01 497 9022

property Publisher

Designroom www.designroom.ie

The

WINTER 2007

PROFESSIONAL

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.

CONTENTS BUDGET 2008 NEW CODE OF PRACTICE FOR AUCTIONEERS AND ESTATE AGENTS PUBLISHED APPOINTMENT OF AUCTIONEERS AND ESTATE AGENTS AND THEIR ENTITLEMENT TO FEES INISHOWEN AUCTIONEER CELEBRATES 25 YEARS IN BUSINESS! PROPERTY TRANSACTION COSTS – THE REAL FACTS EXPLAINED BOOM OR BUST: THE CONFIDENCE CRISIS WHAT FRIENDS THOU HAST

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MESSAGE FROM

THE PRESIDENT Dear Member It’s hard to believe that we are again at the end of another year, time moves so swiftly by. It’s a time for all of us to reflect back on what has been a very difficult year for auctioneers and estate agents and indeed the industry generally. However, we have enjoyed good times in recent years and there is little sympathy for us on the high street. Clearly, the only way forward for us is to face the challenges ahead as best we can and to armour ourselves with the best available marketing tools in the business. With this in mind, the Institute organised seminars during the Autumn which were primarily focused on helping members to upgrade their marketing skills and to refresh themselves on some key aspects of the law. Continuous Professional Development or CPD is now a central part of every profession and we will be implementing a programme shortly in IPAV.

Seán Mason President

This time last year I wrote that the publication of new legislation introducing regulation was imminent. Twelve months later it has still not appeared, due partly, at least, to the General Election in May. That election saw the previous Minister with responsibility in this area, Michael McDowell, lose his seat and a new appointee, Brian Lenihan in his place.

The new Government’s legislative programme, published at the end of September, promised the Bill for early in 2008 and all the indications are that it is reasonably on target. The contents of this Bill will have major implications for all of us as to how we run our business and we will be undertaking a forensic examination line by line. At all times, of course, we will keep members informed of developments and indeed hold formal briefing sessions, when necessary. Our AGM and Annual Convention, held in the Marriot Hotel in Druid’s Glen, Co. Wicklow at the end of May were very well attended and plans are already advanced for next year’s Convention which will take place in the Grand Hotel, Malahide on May 9th and 10th. I would ask you to note these dates now and to make a special effort to attend. In the Autumn also we made a comprehensive Budget submission to the Minister for Finance, Brian Cowen. In it, well-known economist Jim Power outlined a strong case for a radical restructuring of the Stamp Duty regime which was proving a major disincentive to people who wished to trade up or down in the second-hand housing market. In particular, we called for the introduction of just four rates of Stamp Duty and the capping of the top rate at 6%. I welcome the Budget changes very much even though they did not go as far as we would have wished. We now look forward to an upturn in the industry in the Spring. Education continues to be a main priority of the Institute and despite the downturn in the industry, we have healthy numbers of participants in both our full and part-time courses around the country. 2007 was also a milestone in our education programme as we saw the launch of a new degree programme, run in association with Athlone Institute of Technology. This has got off to an excellent start and we look forward to growing that relationship with AIT in the years ahead. Our Fine Art courses, both full and part-time, continue to be popular with men and women of all ages and from very diverse backgrounds and fill a niche market in the adult education field. I would like to pay tribute to the work of the Education Advisory Committee and its Chairman, Peter Brady, for their continued efforts.Our quarterly magazine, The Property Professional continues to be our flagship publication and its increased circulation is a testament to the high regard in which it is held in the property industry and beyond. As we face into a New Year, I would urge you all to adopt a positive approach and to face the challenges ahead with renewed vigour and determination.Finally, I would like to thank all members for their support during the year and to wish you a very Happy Christmas and a Prosperous 2008.

Sean Mason President 2

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BUDGET 2008 This claw-back period is being reduced on all three reliefs from 5 to 2 years for deeds of transfer executed on, or after, 5 December 2007. For deeds of transfer executed before 5 December 2007, to the extent that a dwelling house or apartment is rented out on, or after, 5 December 2007, it will not involve a claw-back of relief where this happens in the third, fourth or fifth year of ownership. This measure is estimated to cost €4 million in 2008 and in a full year.

Rent-a-Room Scheme

THE FOLLOWING ARE THE PRINCIPAL FEATURES OF BUDGET 2008 IN RELATION TO PROPERTY.

stamping no later than 5 December 2007. Instruments which are executed in the 30 days prior to 5 December 2007 will therefore benefit from this change.

STAMP DUTY

Current exemptions in relation to first time buyers and buyers of new homes will continue to apply.

Reform of the Charge to Stamp Duty on Residential Property The current Stamp Duty system applicable to residential property is being reformed. A simplified system, incorporating an exemption of €125,000 with 2 progressive rates instead of the existing 6 rate bands, is being introduced with immediate effect. Transactions not exceeding the €125,000 exemption level will not be liable to Stamp Duty. For amounts above this €125,000 exemption level, but not exceeding €1 million, Stamp Duty will be charged at 7% on the excess over €125,000. Where the property exceeds €1 million, the part in excess of €1 million will be charged at 9% with the remainder between €125,000 and €1 million subject to a 7% charge. In addition, properties with a value in excess of €125,000 but not exceeding €127,000 will not be liable for stamp duty. This change will take effect in respect of instruments which are required to be presented to the Revenue Commissioners for

More information on this reform is contained in Annex G (page 6). This measure will cost €190 million in a full year with a minor cost in 2007.

Claw-back of Relief for First-time Purchasers and other Owner-Occupiers An exemption from Stamp Duty is generally available for first-time owner-occupying purchasers of new or second-hand dwelling houses or apartments. There is also an exemption available for other owneroccupying purchasers of new dwelling houses or apartments under 125m2. In addition, partial relief is also available to owner-occupying purchasers of new dwelling houses or apartments over 125m2. These exemptions/reliefs are clawed-back where the purchaser rents out the dwelling house or apartment, other than under rent-a-room arrangements, within 5 years of the date of the deed of transfer giving effect to the purchase.

The limit of the exemption from income tax which applies to rent received, where a person rents out a room or rooms in his or her principal private residence, is to be increased from €7,620 to €10,000. This measure is estimated to cost €0.6 million in 2008 and €0.8 million in a full year.

Mortgage Interest Relief The current annual ceiling on the amount of interest that can be allowed on a mortgage is being increased with effect from 1 January 2008 for first-time buyers from €8,000/€16,000 single/married to €10,000/€20,000 single/married. The additional relief will be available for the first seven years for which there is an entitlement to mortgage interest relief. This measure is estimated to cost €20 million in 2008 and in a full year.

Allowance for Rent Paid by Certain Tenants The maximum level of rent paid for private rented accommodation on which tax relief can be claimed, at the standard rate of tax, is being increased. For those aged under 55 years of age, it is being increased from €1,800 to €2,000 per annum for a single person and from €3,600 to €4,000 per annum for widowed and married persons.

Budget continued on page 6

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BUDGET 2008

Budget from page 4

This equates to a tax credit of €400 per annum for single persons and €800 for widowed and married persons under 55 years of age. For those aged 55 years and over, the maximum level of rent paid on which tax relief can be claimed is being increased from €3,600 to €4,000 per annum for a single person and from €7,200 to €8,000 per annum for widowed and married persons. This equates to a tax credit of €800 per annum for a single person and €1,600 per annum for widowed and married persons over 55 years of age. This measure is estimated to cost €7 million in 2008 and €9.7 million in a full year.

Review of VAT on Property Transactions A review of the current system of applying VAT on property transactions has been carried out. Provision will be made in the Finance Bill for the introduction of a new system for applying VAT to property transactions. The changes are designed to simplify the rules for VAT on property, while ensuring a more equitable treatment for taxpayers. The new rules, which are outlined in Annex E of the Budget, will apply to both commercial and residential property supplied in the course of business. The VAT charge on sales of residential property is unchanged. The new system will take effect from 1 July 2008. It is estimated that this measure will be Exchequer neutral.

Reverse charge mechanism in the Construction Sector A reverse charge mechanism for VAT on supplies made by a subcontractor to a principal contractor in the construction sector is being introduced with effect from 1 September 2008. This is a simplification measure. This measure will be the subject of consultation with the construction sector and the details will be outlined in the Finance Bill. This measure will result in an estimated once-off cash flow yield of €50 million in 2008, but will not increase the overall tax bill of the taxpayers concerned.

Pictured at the official opening of the new offices of the National Property Services Regulatory Authority in Navan, Co Meath on November 15 were (front row l – r): Eamon Gavigan, President, Navan & District Chamber of Commerce; Brian Lenihan TD, Minister for Justice, Equality and Law Reform; Nick Killian, Chairman, Meath County Council. (Back row): Alan Redmond, Senior Vice President, IPAV, John Shaw, Junior Vice-President, IPAV and Ronald Duff, DNG Ronald Duff, Ratoath.

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BUDGET 2008

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BUDGET 2008 SHOULD BE WELCOMED BY HOUSING INTERESTS BY JIM POWER, CHIEF ECONOMIST, FRIENDS FIRST

IPAV WELCOMES CHANGES IN STAMP DUTY IPAV welcomed the changes in Stamp Duty for second-hand residential properties introduced in Budget 2008. Chief Executive Fintan McNamara said the changes were a positive move in the right direction. He said he hoped the changes would generate activity in the current flagging market.

Over the past decade the two men who have had responsibility for framing and delivering the annual budget have had a relatively easy time. Economic growth has been generally strong, tax revenue growth has been buoyant, and the only real choices concerned the manner in which the largesse would be delivered. For any finance minister in any jurisdiction, such a situation is a very comfortable one, but nothing lasts forever. Over recent months the Irish economy has lost considerable momentum and for the first time in quite a number of years, the tax take has come in well behind expectations. Tax revenues are required to fund spending, so if revenues are slowing, harder decisions have to be made on the spending side. Consequently, the economic and financial background against which the Budget was presented was the most challenging for some time. It is clear that economic activity slowed quite sharply in the second half of 2007 and this has manifested itself most damagingly from the Government’s perspective in a significant slowdown in tax revenues. The Exchequer returns for November released on the day before the Budget made for very

unpleasant reading and clearly highlighted the challenges in preparing and presenting Budget 2008. The key economic assumption underlying the Budget was a forecasted growth rate of 3% in GDP in 2008. This forecast looks realistic based on current available evidence, but would represent the lowest growth rate recorded since 1993. Slower growth means slower tax revenues and this limited his ability to cut taxes or increase spending. In the event, the key element of the increase in spending focused on social welfare. On the tax side, the income tax concessions were pretty paltry and will have little impact on the majority of taxpayers. For business the extension of the Research & Development incentive is good news, while the renewed ongoing commitment to the full delivery of the National Development Plan is essential to the competitiveness and longterm sustainability of the Irish economy. On the current spending side, social welfare got the most significant increase, but the overall objective of restraining growth in current spending to 8.2% in 2008 will be very challenging, given that it is likely to have increased by around 12% in 2007 when

“The reduction to just three rates of Stamp Duty simplifies the system dramatically and provides significant savings for non-first time buyers purchasing second-hand homes,” he said. Mr McNamara said a couple now purchasing a second-hand home at the current average national house price would make a saving of €5,052 while purchasers of an average second-hand home in Dublin would make a saving of €11,119. “While IPAV would like to see the abolition of the 9% rate outright, this is the first radical change to the Stamp Duty regime in many years and one which we very much welcome,” he added. Mr McNamara also welcomed the increase in ceiling on mortgage interest relief for first time buyers as promised by the Minister and the increase in the threshold for the rent-a-room scheme from €7,620 to €10,000, something which IPAV had strongly lobbied for in their Budget submission. “This move, while it could have gone further, in our view will help to ensure the supply of this type of rental accommodation,” he added.

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BUDGET 2008

economic growth was significantly stronger. Curbing spending in a slowing economy will not be easy to achieve. Faced with a slowing economy, the Minister for Finance sensibly decided to increase borrowing in 2008. Given that capital spending is the reason for borrowing, there is no real concern.

U-TURN In relation to the housing market, Mr Cowen was under considerable pressure from industry interests in the run up to the Budget to engage in some meaningful reform of the Stamp Duty regime. Having initially promised little, the Minister did a significant U-turn on the day and introduced some very welcome changes to the regime. Following the reform of the Stamp Duty regime, the effective duty rate has been reduced for most if not all buyers and the system now looks much more efficient than the draconian regime that previously applied. When any reform of the stamp duty regime is considered, the key consideration is that it should not undermine the tax take in a significant way or end up fuelling house price inflation. By agreeing to reform the system, the Department of Finance clearly believes that it will not undermine the tax take in any significant way, or that in an environment of such weak demand in the market and such a high level of price resistance from purchasers, it is unlikely to re-kindle house price inflation. Clearly, the dramatic change in the attitude towards Stamp Duty that occurred in the mind of the Minister in the days leading up to the Budget was prompted by the dramatic slowdown in the tax take from stamp duty over the past couple of months. The Minister and his officials obviously believe that the reform is a risk worth taking in order to prevent an even greater collapse in revenues and indeed in the overall economy. Over the past decade, the residential housing market has contributed hugely to the Irish economy. It has been a major driver of economic growth, employment creation both directly and indirectly, the buoyant performance of the Irish equity market and, most importantly, the buoyancy of tax revenue that has facilitated such strong growth in Government spending and the much improved state of the public finances. By doing nothing, they could have risked a much weaker market in 2008.

IMPACT The impact that the reforms will have on the market is difficult to predict with certainty at this stage. The market is currently characterised by a distinct lack of confidence. Potential buyers are standing back from house purchase in the expectation that prices will fall further during 2008, having fallen by around 7% in 2007. In the short term at least, this perception is unlikely to be altered in any significant way by the reforms in stamp duties. However, it does represent a move in the right direction and during 2008 the brave reform of the system should gradually help rekindle some level of confidence and activity in the market but it is likely to be a slow, modest and gradual process. That is most likely what policy-makers would desire as the last thing they would

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want to happen would be a sudden resurgence of activity in the market and the re-emergence of house price inflation. The bottom line is that the Stamp Duty reforms are welcome and should help ensure a more stable and efficient housing market in the medium-term. The Irish housing market is now going through an adjustment phase after years of frenetic activity. This adjustment phase is painful, but is necessary for the longer-term stability of the market. The good news is that the interest rate cycle has probably peaked and the supply of new housing is adjusting downwards very quickly. Given that there is still strong fundamental demand in the market, this suggests that the market will become more vibrant again in 2009, albeit at lower levels of activity than we have become accustomed to in recent years. In overall terms, Budget 2008 could be described as cautious in the main, but such a stance is totally appropriate in an environment of slower economic growth. In Ireland’s dark past, borrowing and current spending were used to buy our way out of economic slowdowns, generally with devastating consequences. In Budget 2008, the Minister for Finance opted to pursue a cautious line on current spending and taxation, while continuing to direct resources at the ailing infrastructure. It is hard to argue with this approach. Economic growth is set to slow down to 3% in 2008 and unemployment is set to increase by around 1% to 5.5%, but given the current uncertainties, such an outcome would not represent the end of the world. For the housing market, a stable economic background is essential and the reasonably prudent approach adopted in Budget 2008 should help ensure such stability.

HOW TO ACCESS THE “MEMBER AREA” ON IPAV'S WEBSITE To log on to the Member Area you must first register. Go to website www.ipav.ie <http://www.ipav.ie> and click on “Login”. To register, enter your email address and any password of your choosing (make a note of this password as you will need this every time you login), click member in the third box and click the gavel. On the next screen, enter your name and submit. Once the staff at IPAV have approved your registration, an email will be sent to you confirming your registration. You will then be allowed access to the “Member Area” of the website.

CHARITY DONATION This year, IPAV has decided not to send Christmas cards. Instead a donation will be made to the Simon Community.


the property professional

NEW CODE OF PRACTICE FOR AUCTIONEERS AND ESTATE AGENTS PUBLISHED IPAV CHIEF EXECUTIVE FINTAN MCNAMARA EXAMINES SOME OF THE SALIENT FEATURES OF THE NEW CODE OF PRACTICE DEVELOPED BY THE NEW NATIONAL PROPERTY REGULATORY SERVICES AUTHORITY FOR AUCTIONEERS AND ESTATE AGENTS IN CONSULTATION WITH THE PROFESSIONAL BODIES AND CONSUMER INTERESTS. The new Code of Practice sets out the minimum standard of professional conduct to be expected of Property Services Providers in the provision of property services. It requires from them not only recognition of their responsibilities to their clients but also their responsibilities to the public, customers and fellow professionals. Property Services Providers subscribing to this Code also demonstrate a commitment to ensuring that public confidence in the profession is maintained at a high level. This Code is voluntary but binding on those parties that subscribe to it.All Property Services Providers subscribing to this Code shall have this fact recorded in the Public Register of Property Services Providers. This Code of Practice should be available for consultation by the public in the offices of all Property Services Providers who subscribe to it.

GUIDING PRINCIPLES • Statutory Duty Property Services Providers are obliged to be aware of their legal obligations, particularly their obligations under the Auctioneers and House Agents Acts, 1947 to1973, the Criminal Justice Act, 1994, and the Data Protection Acts, 1988 and 2003, and to ensure that they and their employees comply fully with these obligations and all future relevant legislation. In particular, they may only engage in the provision of property services when in possession of an appropriate licence. • The Public Interest Property Services Providers should recognize and accept that they have a responsibility to the public and should at all times, in the conduct of their professional business, act in a manner, which affirms this. They should endeavor, in the conduct of their business, to ensure that public confidence in the integrity, probity and honesty of the profession is maintained by adhering to the highest standards of service delivery.

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• Conflict of Interest A Property Services Provider has a conflict of interest where he is in a position of trust, which requires the exercise of judgment on behalf of a person for whom he is acting and also has either private or business interests or obligations of a sort that might interfere with the exercise of his judgment. Where a Property Services Provider identifies the existence of, or the potential for, conflict of interest, he should, as soon as practicable, inform the person for whom he is acting, in writing, of the circumstances and unless such person(s) consent(s) in writing to his continuing to act, or requests him to continue to act, he must cease to act in that transaction. Where a customer or potential customer offers a Property Services Provider any form of inducement he shall immediately inform his client.Where a Property Services Provider is engaged in the provision of Financial Services he shall not provide a Financial Service to a customer proposing to purchase a property where the vendor of the property is his client unless he has first: • informed his client in writing or by email that he is providing a Financial Service for the customer, and • informed the customer in writing that he is acting for the vendor in the sale of the property. Where the client and customer agree in writing or by e-mail to the provision by the Property Services Provider of a Financial Service to the customer, the Property Services Provider shall ensure that all information which he holds, in respect of both the client and the customer, shall only be used in full compliance with the provisions of the Data Protection Acts. A Property Services Provider shall report all offers to clients including any detail provided by potential customers. Where an employee of a Property Services Provider has reason to believe that his employer, or any licensed Property Services Provider, is acting

or permitting or inducing employees to act, in an illegal or unethical manner, he may report the matter in confidence to the Disciplinary Board established under clause 4.1 of the Code. Any such “confidential report” must: • be made in writing, • be made in good faith, and • disclose any document, record or information in the possession or control of the person making the report, which relates to the allegation. Confidential reports may not be made anonymously. Confidentiality A duty of confidence exists in respect of information gathered in the course of business by Property Services Providers either directly or indirectly from, or about, a client, a customer or a member of the public. Confidential information may only be used or disclosed in accordance with the provisions of the Data Protection Acts. The duty of confidence shall remain even after the relationship has been terminated. Information obtained by a Property Services Provider from clients, customers and potential customers, pertinent to facilitating a property transaction may be furnished to relevant persons. However, a Property Services Provider shall not disclose the identity of a customer or potential customer to any party other than the client or the client’s representative/solicitor, without the express written consent of the customer or potential customer. In sales other than at auction, a Property Services Provider shall not disclose the specific price achieved without the prior written consent of the client unless legally required to do so. Competence and Professional Development Property Services Providers have an on-going duty to maintain professional knowledge and skill at a level, which ensures that they deliver an efficient and effective service to the highest standard.


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They should: • only engage in the provision of services for which they are qualified • not claim to have expertise or experience which they do not have and • ensure that their skills, and the skills of staff, are kept up to date taking into account developments in the property services sector. Insurance Property Services Providers should not engage in a Property Services activity unless adequate and appropriate public liability and professional indemnity insurance cover levels, as advised by the Authority and confirmed by their auditor, are in place. Record of Offers In sales, other than by auction, Property Services Providers shall maintain a record of all offers made for property, including the identity of the person/representative making the offer, the level of the offer and any conditions attached. Records of offers shall be retained for a period of at least six years from the date of their creation and shall be made available for inspection by the Disciplinary Board. Conduct of Auctions Property Services Providers conducting auctions should ensure that licence details (including licence number, licensed person and issuing authority) are displayed clearly at the auction venue. Advertising Property Services Providers should not publish or cause to be published any material or advertisements that are false, misleading or dishonest. Any advertising material must take notice of advertising codes as well as consumer legislation. Direct Marketing Property Services Providers should not: • contact a person for the purpose of direct marketing, if that person has previously objected to receiving such material. • make a phone call or send a fax, e-mail, SMS or MMS message, for the purpose of direct marketing, to a natural person who is not a client or customer, unless the recipient has given prior consent to the receipt of such communication.

RELATIONSHIP WITH CLIENTS Compliance Before accepting a client, Property Services Providers should assess any potential threats to compliance with this code presented by the acceptance of the client (e.g. a conflict

Pictured at the prize giving night at the Realtor of the Year event during the week of the NAR (National Association of Realtors) Convention which took place in the Venetian Hotel in Las Vegas in November were: (l - r:) Liam O’Donnell FIPAV, Fintan McNamara, CEO IPAV, Dr. Marget Funk, President of CEI and Paul Gartlan FIPAV. The Venetian Hotel will become the largest hotel in the world next spring when an extension is completed to give it over 8,000 bedrooms!

of interest). Any identified threats should be dealt with before the client can be accepted (e.g. where a conflict of interest is identified, the client should be notified and the Property Service Provider should only continue to act if the client consents). Client Accounts Property Services Providers who receive money in relation to the provision of property services shall open and operate appropriate Client Accounts. The rules for operating such accounts shall be as follows: • All client money shall be kept in an account, or accounts, separate from any personal, office or business account. • A client account shall be a current or deposit account in which the word “client” appears and which is kept in a bank at a branch in the Republic of Ireland. • The Property Services Provider shall provide the client and customer with notice of the lodgement of money to the client account and, on reasonable request, shall inform the client and customer of the amount of money held in his client account. • The Property Services Provider shall maintain an up to date record of client accounts for inspection by the Disciplinary Board. • It will be the responsibility of Property Services Providers to ensure that records of client accounts are audited on an annual basis. Such an audit report should be retained for a period of six years from the closing of the client account. • All monies in client accounts shall be clearly identifiable. • All relevant money shall be lodged to client accounts without unreasonable delay and no later than five working days from receipt by the Property Services Provider of such money. • Each client account shall be held in credit until it is closed.

Duty to Client Property Services Providers should at all times • Act in the best interest of their clients and with integrity and fairness to others. • promptly and without undue delay inform clients, or their representatives, of any offer made on the property covered by the agreement or letter of engagement. Where Property Services Providers are key holders in respect of client properties they must, in the context of that relationship, take due care over the security of the key(s)and exercise reasonable care to ensure that, after any visit, a property is left secure –or at least as secure as it was prior to the visit. Fees Property Services Providers should notify clients in writing of fees and outlays payable or the means by which fees may be calculated prior to an agreement being entered into. The means by which fees are calculated must be transparent and, where not readily understood, must be explained to the client.

RELATIONSHIP WITH CUSTOMERS AND THE PUBLIC Information to be supplied to the Public It is the duty of a Property Services Provider to ensure that any information supplied to the public, either in the form of advertising or as a result of a request for information, should • be factually correct and accurate, • not be misleading, • Not misrepresent the investment potential of a property. Information to be supplied to customers Property Services Providers should make available to customers, or potential customers, the following information,

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where supplied to the Property Services Provider by his client for the purpose of the sale: • Terms of sale, detailing precisely what is being offered for sale including, but not limited to, the area of the property and the site, • Architects’ plans or scale drawings and any supplementary plans including electrical and plumbing plans, • Details of known structural alterations, • Details of insurance claims on the property, made by the client, arising out of structural damage. • Copies of guarantees/warranties relating to the property being sold (to be provided only to a customer), • Details of any protected building status, • Details on the energy rating of the real property. Property Services Providers shall treat all potential customers equally in terms of disclosing or otherwise the specific level of, and/or conditions attaching to, counter offers received for a property. Where the property being offered for sale is part of a multi-unit development managed by a Management Company or Agent, the Property Services Provider should inform the customer that: • The development is managed by a Management Company and give the name and contact details of the Management Company; • As an owner of such property he will become a member of the Management Company; • He will be required to pay an annual ‘service charge’ for the maintenance and upkeep of the common areas in a multiunit complex and the level of such charge; • The service charge may increase following the expiration of any warranties, • He may have to pay into a sinking fund to cover future major maintenance and repairs to the common areas of the multiunit complex. Duty to Customers Property Services Providers should take all reasonable steps to ensure that: • Details of their licences are prominently displayed in all their business premises and on all promotional, marketing and advertising material, such details to include a registration number (where appropriate), name and address of licensee; • Where a deposit is due to be returned it shall be returned within 5 working days; • Offers made by a customer are promptly relayed to the client.

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ENFORCEMENT Disciplinary Board For the purpose of monitoring and enforcing this Code, a Disciplinary Board (“the Board”) shall be established to investigate and adjudicate on all complaints against Property Services Providers. All Property Services Providers shall • Have in place their own written complaints procedure and/or, • Subscribe to the complaints procedure of a Property Services Providers’ Representative Body of which they are a member. The complaints procedure should be notified, and made available, to all clients. Such procedures may be used by any aggrieved person or they may alternatively complain directly to the Board. All clients must be informed of their right to make a complaint directly to the Board. The Board shall consist of a Chairperson and six members. 1 person nominated by the Irish Auctioneers and Valuers Institute, 1 person nominated by the Institute of Professional Auctioneers and Valuers, 1 person nominated by the National Consumer Agency and 1 person nominated by the Consumers’ Association of Ireland. • Each member present shall have one vote, Sittings of the Board shall normally be held in private. The Board, of its own motion or at the request of a party, may in its absolute discretion conduct an oral hearing of a complaint.

or (ii) has contravened any provision of this code of practice, may take whichever of the following actions in relation to the Property Services Provider which is, in its opinion, appropriate: (I) issue a private warning, (II) issue a public warning, (III)record the upholding of the complaint in the Public Register of Property Services Providers, (IV) recommend to the Property Services Providers’ representative bodies that the member concerned be suspended from membership for a specified period, (V) recommend to the Property Services Industry representative bodies that the Property Services Provider concerned be excluded from membership of these bodies, and shall notify the complainant and the Property Services Provider of its decision. Where a complaint against a Property Services Provider has been upheld, the Property Services Provider will be liable for any legitimate cost incurred by the Board, and any witnesses in the conduct of that investigation. The Board may set the level of costs to be paid. Where a complaint against a Property Services Provider is, following an appeal to the Appeal Board under Part 5 of the Code, upheld the Board may publish details of its decision, in such form and in such manner as it considers appropriate.

Complaints Procedure

APPEALS

Any person may make a complaint in writing to the Board against a Property Services Provider in relation to an alleged contravention of this Code of Practice. On receipt of such a complaint, the Board, if satisfied that the complaint is made in good faith and is not frivolous or vexatious and it has not been possible to resolve the complaint through the provider’s own complaints procedures, or (where applicable) through the provider’s representative body’s complaints procedures, shall: • Inform the Property Services Provider, in writing, of receipt of the complaint; • Investigate it, giving the Property Services Provider and the complainant an opportunity to be heard during the investigation; • Issue a decision on a complaint.

Disciplinary Appeal Board

Sanctions On completion of the investigation the Board— (a)may decide not to uphold the complaint, or (b)if satisfied on reasonable grounds that the Property Services Provider— (i) has been guilty of misconduct in the course of providing a property service,

A Disciplinary Appeal Board (“the Appeal Board”) shall be established to hear and determine appeals against decisions of the Board. Appeals Procedure A person aggrieved by a decision of the Board may, within one month after the date of receipt of notification of the decision, appeal against the decision to the Appeal Board by serving on it a notice of appeal in writing. The notice of appeal may be served by sending it by registered post to the Appeal Board. The Appeal Board shall not consider an appeal if the relevant notice of appeal is received by it later than the expiration of the period of one month from date of notification of the decision on the complaint. The Code will operate until the promised legislation is passed by the Oireachtas. IPAV recommends that practitioners sign up to it in the interest of best practice.


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APPOINTMENT OF AUCTIONEERS AND ESTATE AGENTS AND THEIR ENTITLEMENT TO FEES by Fionnuala Murphy, Orpen Franks, Solicitors

QUESTION: WHEN ARE FEES PAYABLE TO AN AUCTIONEER OR AN ESTATE AGENT? ANSWER: THERE IS NO OBLIGATION TO PAY WITHOUT A CONTRACT. There is no obligation on a client to pay an agent’s fees unless the agent has a contract with that client to “pay up”. A contract can be expressed or implied and, in most cases, it can be verbal. Only certain forms of contract (e.g. for sale of land) must be in writing. While I do not wish to smother auctioneers and estate agents in unnecessary levels of bureaucracy and administration, I do however strenuously recommend that a clear and unambiguous written contract as between agent and client to protect the agent and entitle the agent to fees is a prudent course of action and best industry practice. In conjunction with IPAV, therefore, I hope to outline in this article the bones of a basic contract structure which may assist agents in collecting fees.

NO FOAL … NO FEE Of course merely having a contract alone will not entitle an agent to his fees. The fee must be earned! No estate agent or Auctioneer can expect to be paid unless his/her efforts bring about the event which was contracted for. To put a legal spin on that, the agent must be “the effective cause” of the transaction being carried through. The simplest example of being the effective cause of carrying through the transaction is: (1) (2)

to introduce a purchaser to a vendor in the sale of a property; and for a binding contract to result.

Unfortunately, not all situations are as clear cut.

Before I expand on an agent’s entitlement to fees, I would like to clarify a few terms I have used and assumptions that I have made in preparing this article for the reader’s ease of reference.

documents must be read together and cannot be treated as separate documents. Clearly this document will not satisfy every situation an agent will meet in practice, but it is an excellent starting point.

While I recognise that agents provide a wide and diverse range of professional services, I have assumed for the purposes of this article that I am advising an agent acting on behalf of a vendor. I have also assumed that the vendor is selling a residential dwelling. Similar principles apply, however, where an agent is acting for a purchaser or in the letting of a premises (either for the landlord or tenant) or providing any of the other valuable services which are offered by an estate agent or auctioneer in Ireland.

Please do not be put off by the fact that the letter is, in the main, written in clear, plain and simple English. You should remember that a contract is an agreement enforceable in a court of law. Where a contract is in writing and has been generated by one party to the contract (in this instance the agent) the document will be construed by a court, if necessary “contra proferentem”, in other words, against the party who generated the document. For this reason, it is essential that the document is clear and unambiguous.

I also use the umbrella term “fees”. There are however several methods of paying an agent. “Remuneration” is a payment irrespective of the sale price. “Commission” on the other hand is a payment calculated by reference to the percentage of the sale price. To keep things simple, I do not differentiate between remuneration and/or commission. However, in putting in place a clear contract with a client it is important to be aware of the differences.

PREVENTION IS BETTER THAN CURE In establishing an entitlement to fees, an agent’s best line of defence is a Letter of Appointment. This, in short, comprises the contract between agent and client. Sometimes this document is known as “terms of engagement”. IPAV has a sample letter for taking instructions on the sale of a property on its website. The relevant website is www.ipav.ie. All members are entitled to log on and to obtain a copy of the letter. (The letter has been reproduced in Appendix 1.) You will see that the sample letter refers to standard conditions which must be furnished with it. (The conditions have been reproduced in Appendix II). These two

Here I must confess that it is often a mistake made by many (and lawyers are frequently the worst offenders) to think that the more complicated the wording, the more official the document. Please bear in mind that in legal practice this wordy approach hails from a time when a lawyer was paid by the word! Therefore, if you could include as many words as possible in your document to describe the same thing, you would be paid more. Happily in modern Ireland, we are moving towards a situation where professionals seek to communicate with their clients in clear and plain language. I propose highlighting certain issues arising from the provisions of the sample letter so that in using it, you are aware of the implications of it section by section. Sample Letter of Instruction I would like firstly to direct attention to Paragraphs 1 and 4. These are general introductory and concluding paragraphs. In the course of these paragraphs the agent confirms instructions with the client and establishes whether the sale is by way of auction or private treaty. The vendor’s solicitors are identified and the letter ends with a general conclusion. Continued on page 16 the property professional

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IPAV PICTURE SPECIAL - AUTUMN SEMINARS

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At IPAV’s Seminar at the Malton Hotel, Killarney (l – r): John O'Sullivan, Kingdom Properties; John Shaw, Vice President, IPAV; Tadgh O'Sullivan, DNG, Kenmare and Adrian Hassett, Killorglin.

Pictured at IPAV’s Seminar in the SAS Radisson Hotel, Athlone on November 20 were Loughrea auctioneers Martin Shaughnessy (left) and Frank Kavanagh with IPAV President Seán Mason.

At IPAV’s Seminar in the SAS Radisson Hotel, Athlone were (l – r): Dermot O’Meara, Sherry FitzGerald O’Meara, Athlone and Seán Naughton, The Square, Roscommon

Fintan McNamara CEO, IPAV; John Shaw, Vice President and Tim Brosnan, President Irish Marketing Institute (South West Region) at the IPAV Killarney Seminar.

Mairéad Devaney and Sarah of O’Sullivan, McGoldrick Property & Financial Services Centre, Sligo and Helena Kenny, Sherry FitzGerald O’Meara, Athlone were at IPAV’s Seminar in the SAS Radisson Hotel, Athlone on November 20

Eamon O’Flaherty, Property Partners Brady, Main St, Maynooth and Danny McEvoy, McEvoy & Associates, Lucan Road, Celbridge at the IPAV Seminar in Moran’s Red Cow Hotel

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IPAV PICTURE SPECIAL - AUTUMN SEMINARS

At IPAV Seminar in Killarney were (l – r): Moira Daly, Daly Associates, Tralee; John Shaw, IPAV Vice President; Derry Daly, Daly Associates, Tralee and Pauline Sugrue, Waterville

Roscommon auctioneer Seán Naughton and John Cusack, Head of the School of Business, Athlone Institute of Technology, were at the IPAV Seminar in the SAS Radisson Hotel in Athlone.

Seán Reilly, Sherry FitzGerald Reilly Auctioneers, Prosperous, Co Kildare with Seamus Bane, Kevin Bane & Sons, Market Square, Scariff, Co Clare at the Dublin Seminar

(l – r): John Shanahan, DNG Stack, Abbeyfeale; John Shaw, IPAV Vice President and Michael Walsh, Walsh Auctioneers, Limerick at the Killarney Seminar

AIT auctioneering students pictured at IPAV’s Seminar in the SAS Radisson Hotel, Athlone were (l – r): Lisa Fallon, Athlone, Robert Leavy, Tullamore and Stephanie Molloy, Athlone.

Pictured at the Athlone Seminar were Fionnuala Murphy, Orpen Franks Solicitors, Dublin, Guest Speaker; IPAV President Seán Mason and David Reynolds, David Reynolds Gunne, Sligo.

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Continued from page 13

Paragraph 1 “Exclusive Selling Rights” The really interesting part of Paragraph 1 is that it establishes that, for a stipulated period (and clearly this is a matter of negotiation), the agent will have “exclusive selling rights”. When considering the benefits of exclusive selling rights, it is useful to recap on the different types of agency which are available. The differences between sole agency and joint agency are in some ways self explanatory. A sole agent is the only agent selling the property. In a joint agency arrangement, there may be two or more agents attempting to sell the property contemporaneously. In that situation, it is recommended that in addition to a contract with the client, each agent should have a contract with the joint agent (or agents) to clearly establish the breakdown of fees as between the respective agents depending on their actions. That, of course, would constitute an entirely separate article! The real issue I am trying to highlight in considering paragraph 1 of IPAV’s sample Letter of Appointment is the question of “exclusive selling rights”. The joy of exclusive agency is that where a client grants an exclusive agency, then the exclusive agent has the right to deal with that property for a stipulated period excluding all others, including the client. In other words, by signing up to an exclusive agency the client forgoes the right to instruct another agent and forgoes the right to sell the property privately. Hence, although it looks like an innocuous little opening paragraph, Paragraph 1 is in fact a very central part of the Letter of Appointment. Exclusive agency rights must be clearly conferred on the agent by the client. They will not be implied into any contract. It is necessary to explain the impact of exclusive selling rights to the client. Ideally of course one would like to see the explanation in writing but this may put off a client. Please do not confuse “exclusive selling rights” with “sole agency”. Sole agency alone does protect the agent against the client instructing a second agent but it does not protect against the client selling privately. Although technically “exclusive selling rights” are the same as “sole selling rights”, I prefer not to use the term “sole selling rights” as it risks being confused with “sole agency”. Paragraph 2 – Amount of Fees In the second paragraph of the Letter of Instruction, the agent details the fee payable. How much is the agent entitled to?

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If an agent establishes an entitlement to fees but does not detail in a contract the amount agreed, the agent will be entitled to “a reasonable fee”. The courts will determine how much that is on a case by case basis and usually based on expert evidence. Paragraph 2 also makes reference to “agreed promotion expenses and any agreed outlay”. In an ideal world it would be preferable to have outlay paid on account. Clearly, this is something that each agent in practice will be able to implement with individual clients. Auctioneers and estate agents are entitled to recover all normal expenses and outlays incurred in the performance of their authorised duties. It is, therefore, important that the contract is clear on what the agent is authorised to do. Happily an agent is entitled to out-of-pocket expenses whether the property is sold or otherwise. That notwithstanding, it is prudent to obtain written confirmation from the client that he/she will discharge outlays. Paragraph 3 – Brochure The third paragraph of the sample Letter of Instruction introduces the idea of a brochure and the existence of the standard conditions. I have addressed the brochure related issues in some detail below. Standard Conditions (which should be furnished with the sample Letter of Instruction Appendix 2). Please note that I do not intend reviewing these conditions in numerical order but where I feel it is important to highlight points, I will address those in order of priority. Condition 8 The introduction to the conditions states that it is a list of conditions “under which the property might be accepted for sale by an auctioneer or estate agent”. At Condition 8 (the final clause), the client is asked to consider the Conditions of the Agreement and if appropriate seek independent advice. As drafted, Condition 8 provides that if the client does not revert within seven days, then the agent will assume the terms are acceptable. In an ideal world one would prefer to have the Conditions signed by the client and returned. However, the difficulty is if the agent does not do that in 100% of cases, the one case in which there will be litigation will be the case where the client has not signed. Therefore, on balance it is probably better to take the approach adopted by IPAV standard form. Clearly, this is a decision for each agent to take in practice. I think it should be a practice-wide approach. I do not think it should vary on a case by case basis.

Condition 3 Condition 3 deals with the question of “exclusive selling rights”. It repeats the period of time indicated in the opening paragraph of the Letter of Instruction. The interesting thing about Condition 3, however, is that it allows for a situation where the property has not sold at the end of the stipulated period. Let us take an example. If the agent is given exclusive selling rights for a period of 8 weeks and at the end of that 8 week period has not successfully sold the property, then these Standard Conditions envisage that the exclusive selling rights shall continue on a 4 weekly basis (or whatever term is inserted, but it must be reasonable). The extension is at the discretion of the vendor. This is reasonable. An agent cannot unilaterally deny the vendor the right either to sell the property privately or to give the property to another agent. However, the vendor may not terminate the agent’s exclusive selling rights until the vendor has discharged all outlays and expenses reasonably incurred by the agency. This offers protection at least for out-ofpocket expenses and could prove very useful in practice. The condition also allows the relationship to continue on a rolling basis and may ensure an agent’s ongoing exclusive selling rights. Again in an ideal world one might prefer that the vendor was obliged to confirm the extension of exclusive selling rights in writing but, in practice, this may not be feasible. Condition 6 Condition 6 is very interesting. It is an attempt to protect an agent’s entitlement to fees. I have in practice encountered situations where an agent introduces a purchaser to the vendor and the vendor subsequently contacts the interested party quite separately and agrees to sell the property without reference to the agent. The aim of Condition 6 is to offer the agent some protection. In practice, I feel Condition 6 gives the agent a degree of negotiating power with the vendor. While it might be of limited assistance to the agent if seeking enforcement of the terms of the contract before the courts of law, I would not necessarily ground a case on this condition. Condition 7 Condition 7 obliges the purchaser to advise the agent if the brochure is inaccurate. Irish agents may be familiar with a recent High Court case where a leading auctioneering firm was sued.


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In short, the purchaser paid a figure for a commercial property and then discovered that it was 20% smaller than had been described in the auctioneer’s sale brochure. As the purchase price was based on a cost per sq. ft. and the purchaser relied on the calculation in the brochure when deciding to purchase, the court awarded the purchaser €350,000.00 compensation due to what the High Court felt was negligence and negligent misstatement. It should be borne in mind however that this decision may very well be appealed to the Supreme Court. That said, it is imperative that auctioneers double check the contents of all brochures produced before distributing them to potential purchasers. Condition 1 The first of the standard conditions clarifies the date on which the fees are to be paid. In this instance fees are to be paid on completion of the sale. There are situations where fees might be paid on the introduction of a client or at another point in the transaction. The following standard conditions do not require much consideration in this context:Condition 2 deals with the question of the promotional budget and outlay Condition 4 confirms that the booking deposit will be held as stakeholder

Appendix 1

Condition 5 offers a degree of protection to the agency. If a booking deposit is not received by the agency, than the vendor is obliged by the terms of the contract to instruct his/her solicitor to reimburse the agency for any outlays incurred. Additional points of interest The Review Group Recommendations of 2005 indicate that going forward it should be obligatory to have such Letters of Appointment. It also suggested that such letters should include wording dealing with the money laundering legislation and a statement of “no conflict”. To that end, Orpen Franks solicitors are liaising with IPAV to upgrade the template letter of appointment and Standard Conditions and this will be available on IPAV’s website shortly. It is worth noting that broadly auctioneering and estate agency are governed by the Auctioneers and House Agents Acts, 1947, 1967 and 1973. There are also regulations regarding accounts. As a rule these pieces of legislation are silent as to the question of fees and offer no protection for agents. Agents should however be conscious of the provisions of Section 2 (i) of the 1973 act which states:“any provision (whether express or implied) in an agreement entered into after the

commencement of this Act and relating to the sale, lease or letting of property (not being personal chattels), whereby the purchaser, lessee or tenant is required to pay or bear the cost of auctioneers’ or house agents’ fees or expenses in respect of the sale, lease or letting, shall be void.” As mentioned previously, an agent is only entitled to his/her fees where he/she has earned them. In addition to this, however, standards of behaviour are central to an agent’s entitlement to payment. The fiduciary nature of the agency role must not be forgotten. Each agent must apply all reasonable levels of care and skill expected of a professional in his position. One should employ levels equivalent to that which one’s professional colleagues would expect. An agent has no entitlement to fees if he has behaved negligently or has secretly profited through his actions. Indeed, not only will an agent lose his entitlement to fees, he may also be exposed to damages if he behaves in this manner. I hope that this article will prove of some assistance in dealing with clients and the collection of fees. Fionnuala Murphy is a solicitor with Orpen Franks Solicitors, 28/30 Burlington Road, Dublin 4 (Tel: 01 6376200) web: www.orpenfranks.ie

Appendix 2

for sale. accepted rty is accepted perty might be der which prope pro un s ich on wh iti r nd de Sample letter for the taki co s un on iti Standard nd co e ng of Instructions on the th ard list of sale of property and an outline of the Standard This is a stand tate agent. Conditions which should auctioneer or es apply. format of a letter for the ice plus VAT are for sale by an taking of instructions from This is a suggested e of the sale pr property and of the stan a client on the sale of a ified percentag ec sp a to dard conditions which sho ing uld apply. 1. Fees amount mpletion of a sale. promotional Re: your property. In the event of charged on co s been agreed. actual amount of outlay will ha €x of et dg bu the this figure 2. A promotion amount not being required, Dear Mr. & Mrs. ……. cessary to review y will be outlay of this t of it being ne outla en al ev e ion th dit In ad . re We refer to our meeting only be charged rmission will be sought befo of the Xth instant and to pe our recent discussions regarding the sale of the upwards, your operty for (X) above property. We writ rights to the pr e now to confirm your kind red. instructions that we act ur inc exclusive selling at the end of this period, ve ha as selling agents on you to ed is deem unsold r behalf in the sale, by Auction/Private Treaty [del ur weekly basis 3. The agency event of the property being ete whichever is inapplic ntinue on a fo property. We note that you able], of the above weeks. In the rights are to co terminated until all outlay ng lli se have appointed ABC & Co., e siv clu you in this transaction. solicitors, to act for the agency’s ex of the vendor but may not be are paid in full. We would envisage a succ n cy essful sale within a peri of X weeks and during this at the discretio sonably incurred by the agen ld in its od period we shall have excl will take and ho usive selling rights. and expenses rea le being agreed, the agency deposit for an amount We further confirm that oking we have now placed you t of a sa of the agreed keholder, a bo r property on our books, 4. In the even as instructed we are quo t exceeding 5% account, as sta and ting a price of “Offers in ordinary client sonable by the agency but no excess of €X.” Our fee in this transaction shall be rea at the normal scale fee the deemed to be of X% of the agreed sale price together with agre by the agency, ed promotion expenses is not received to the solicitor sit sale price. and any agreed outlay. po shall, of course, consult de ing ok on We with you prior to the rese son, a bo instructi rvation of any necessary advertisements. We are 5. If, for any rea be required to give a written cy’s fees and outlay arranging for the erection the agen e arg vendor(s) will of a “For Sale” sign at the property within the nex ch dis to t few days. e of sale cy’s sale. having carriag tion of the agen completion of We enclose herewith for s of the termina the event that the ek mediately after your information a copy im we 8 in th wi of the brochure we have ble in prepared for your property le be agreed ove will be paya became aware that the , together with a copy of 6. Should a sa hts, fees as ab under which this agency our standard conditions sive selling rig s introduced by the agency or of the agency. accepts the property for clu ex sale. efforts aser wa We would like to thank we eventual purch sale through the promotional you for placing your prop e sales details y was for erty with us and should is a copy of th require clarification on ert ion op at pr rm fo in you rm us of any any of the above points, ur fo yo in r d fo an ith d rew rea please do not hesitate to contact me. We trust tha 7. Enclosed he which we would ask you to t we shall have a successf if ul campaign to our mut benefit. s. have prepared agreement and, ual ors or omission s of our agency heard from you on iti nd inaccuracies, err co e th t dy k that you stu endent advice. If we have no nditions as set With kindest regards, 8. We would as obtain indep me that the co felt appropriate, in seven days, we will assu cordingly. with d ac Yours sincerely, in this matter d we will procee able to you an as a out are accept not be relied on ly and should on e nc ida e. gu vic r fo _________________ replace legal ad information is The foregoing nal advice or to XYZ, MIPAV. proper professio substitute for the property professional

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INISHOWEN AUCTIONEER CELEBRATES 25 YEARS IN BUSINESS By Tim Ryan, Editor, The Property Professional

was decided that he, too, should study in Cork. “Frank had achieved academic excellence in UCC and it was thought I might follow in similar mode,” he recalls “but I was not as well talented, unfortunately!” In 1967 Sean spent 3 months in Waynesboro Virginia with the Du Pont Company at their Lycra plant doing research. He was the first Irish student to be sent to the USA by Du Pont under the auspices of the International Association for the exchange of students for Technical Experience. Du Pont built a Lycra plant in Derry that year which is still in operation. Sean did graduate the following year with a B.Sc in Chemistry and returned to lecture in the North West Institute. There followed a variety of further postings in Dundalk Institute of Technology, Newry College of Further and Higher Education, St Catherine’s College, Armagh, Dún Lughaidh College, Dundalk and Carndonagh Community School. Seán Furey greets Taoiseach Bertie Ahern at the opening of IPAV’s Head Office in Baggot St.

Inishowen auctioneer and IPAV National Council member Seán Furey recently celebrated 25 years of business in the northwest. Seán, along with his wife, Joy Doherty and two sons, Dara and Colm now run one of the leading auctioneering, mortgage lending and insurance brokerage businesses in Donegal. It was back on October 1, 1982, Seán first became an agent in Buncrana for Irish Permanent. It was an unusual change of career for the Derry man who already had worked in a number of different careers and in many different parts of the country. A native of the Waterside, Derry, Sean Furey was born one of triplets, two boys and a girl. “I remember my father saying how he had gone down to the local pharmacy and asked for three babies’ bottles. The surprised pharmacist declared: “Jesus, Mary and Joseph,” to which my father replied: No, we’ll not give them those names!”

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Seán attended the Christian Brothers School in Derry but had to leave early as his family needed him to go out to work and earn some money. He got a job with Goulding Fertilizers in Derry but was soon sent to Dublin to train as a laboratory technician in their plant on the East Wall. There, he recalls crossing the Liffey by ferry, then in operation, and trying to find his way around a city about which he knew little or nothing in the mid 50’s. He returned to the Goulding’s plant at Lishally, Co. Derry and set about gaining further qualifications, beginning with his GCE examinations before going on to further study at what is now the North West Institute of Further and Higher Education.

DEGREE AT UCC By this time a younger brother, Frank, had joined the priesthood and had been sent to UCC to study for a degree. When Seán decided to opt for a third level degree, it

He continued to study and obtained further qualifications from NUI, Maynooth, Queen’s University, Belfast and the University of Ulster at Magee College where he was awarded a Master’s Degree in Adult and Continuing Education in 1987. It was while lecturing in Dundalk Institute of Technology that Seán Furey first became acquainted with insurance brokers and estate agents. His idea to open a business was born very much out of necessity and local demand. “There was not a single insurance broker or building society in Buncrana at the time and I just saw an opening,” he explained. “While I was lecturing in Dundalk I got to know a few brokers and the knowledge I learned from them gave me an impetus. When I started, there were very few mortgages in Buncrana. I remember being told that in one full year only two mortgages had been sold in the whole town.”


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At first glance it seemed strange that a college lecturer and teacher of chemistry should make such a career U-turn but Seán soon found his feet as Manager of the Irish Permanent franchise in Buncrana and the business blossomed. Seán has a vivid memory of the official opening, notably one particular incident, namely, the blessing performed by the Catholic priest, the late Dr Hugh McGurk and the Church of Ireland canon, Cecil Thornton. “On the day at 12 noon, Dr McGurk delivered the Lord’s prayer while Canon Thornton said the Angelus,” he recalls. “At the time I thought that was pretty strange and a funny scenario with the roles reversed.” Seán continued with his teaching career for the first eight years in business but then took a career break. At the end of a five year break in 1996 he returned to his old teaching post but lasted only three months. “I found that teaching had changed dramatically in the five years while I was absent, particularly on the discipline front, so I retired altogether to concentrate on the business,” he recalls.

SECOND OFFICE As the business developed, Seán saw the potential to expand and opened a second operation in Carndonagh where he bought out two brokerages. By this time, he had held an auctioneer’s licence since 1983 and was practising in the Inishowen area. In 1991, he joined IPAV and was elected to National Council at his first AGM in 1992. His auctioneer’s business continues to thrive with the housing market quite vibrant in the Border villages such as Muff, Bridgend, Killea and Carrigans. “While the market has slowed down, it was much slower to feel the effects of the mortgage increases along the Border as many people, taking advantage of the strong sterling and low interest rates moved out of Northern Ireland and purchased houses in Co Donegal. Prices are also less expensive in Co Donegal and the levelling out effect is far more modest. For example, a three-bed semi in Buncrana can still be purchased for slightly in excess of €220,000. However, a well located 2-bedroomed bungalow in scenic Greencastle has an asking price of €375,000

Seán Furey with his three sons out his Buncrana offices

while a large 4 bedroom detached house on approx _ acre site at Burnfoot, with spectacular views of Inch Level, Lough Swilly and the surrounding countryside and only 10 minutes drive from Derry City, has an asking price of €450,000. Auctioneers and estate agents in Border counties also suffer from a largely unregulated profession in Northern Ireland. “There are people from the north who come to Donegal and offer to sell houses for as little as €250,” he says. “This is a real problem for us as they have no licences of any kind and members of the public would be very foolish to use their services as there is no comeback whatsoever.”

NEED FOR REGULATION Living and working in a Border county has made Seán very aware of the need for a property regulated professional body. While running a busy office, he has also managed to advance the interests of IPAV in the north-west to the best of his ability. He was central to establishing an IPAV course in the North-West Institute for Further and Higher Education in Derry where he has acted as co-ordinator. He has also actively attended lectures, seminars and presentations over the years. In recent years, he also represented the Institute on a Working Party which produced the Housing Strategy for Donegal County Council as part of the National Housing Programme. As well as celebrating 25 years in business, 2007 has also been a special year for Seán and his long-term partner Joy Doherty. On January 6th the pair were married in Gambia in West Africa. Seán’s interest in Africa began when his brother, Fr Frank Furey SMA, went there as a missionary priest. In Gambia Seán and Joy befriended a Tipperary-born priest, Fr Jackie Sharpe, who has spent the past 43 years there and has built five schools and three churches in the Bush. Today, Seán Furey is glad to leave much of the day-to-day running of the business to Colm, Dara and staff but is keenly looking forward to the challenges of the future.

Staff member Joy Doherty at work in her office

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PROPERTY TRANSACTION COSTS – THE REAL FACTS EXPLAINED PROPERTY TRANSACTION COSTS ARE HIGHEST AND LESS TRANSPARENT IN SOME OF EUROPE’S MOST POPULAR SECOND-HOME INVESTMENT MARKETS, REVEALS PETER CLUSKEY IN FRANCE. By Peter Cluskey

Irish property buyers don’t like hidden costs. We like to know the exact price of what we’re buying. And if there are additional charges involved, we want to know about them well in advance and see the detail of how they’re broken down, so that we can make an informed decision. That at least is what we tell ourselves. All the more so as 2007, a year which started out so promisingly with two new EU members, Bulgaria and Romania, limps to an inauspicious end amid warnings of a global recession. There’s a sneaking suspicion that the property party may well be over - that we’re going to wake up one of these days with the mother of all hangovers, beset by plunging house prices, negative equity and bad debt. It’s just a matter of weeks since we saw the CEO of Citigroup, the largest bank in the world, fall on his sword after revealing that it had a $55 billion exposure to US subprime mortgages. A few weeks before that the International Monetary Fund (IMF) warned that UK property, the overseas market we Irish invest in most, was overvalued and vulnerable to a correction. Spain is already rocky, so are the Baltics … And as for Ireland: The Financial Times reported on November 4 that the average house price in Dublin has dropped from €510,000 last year - which represented a 30 percent increase over 2005 - to €460,000 at the end of October. Make every penny count So buyers want to make every penny count. We don’t want any surprises. We want to know how much we’re paying, who we’re paying it to and for what. And estate agents need to be ready with an honest, well-

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informed answer when a client looking at foreign real estate anywhere from the Black Sea coast of Bulgaria to rampant Dubai asks, “Is it safe?” Those of you who remember that great movie, Marathon Man, will know just how threatening a question that can be …

THE TOP 10

Did you know, for example, that depending on where you buy in Europe, you can incur additional charges of up to 25 percent of your purchase cost - in legal fees, agents’ fees, sales and transfer taxes and registration costs? That’s one-quarter on top of the price of the property. It might not necessarily stop you buying in a particular country, all other aspects of your purchase being attractive, but it should certainly give pause for thought.

3. Monaco - 19.65 percent

A new survey by Global Property Guide www.globalpropertyguide.com - provides some interesting insights into where the most punitive transaction charges are imposed and how they’re broken down. In a survey of 37 European countries, it takes a hypothetical case in which an EU national buys a property - specifically, a city apartment - worth €250,000. To make the case as simple as possible, the property is paid for in cash. And although “black money” is definitely a factor in a major market like Spain, it concedes, it’s not strictly relevant to this survey, so only official costs are included. For starters, the survey finds that, breaking Europe down into United Nations-defined country groupings, average all-in transaction costs - or as they’re known in property economics, “round-trip” transaction costs look like this: Western Europe, 13.7 percent; Eastern Europe, 11.6 percent; Southern Europe, 10.7 percent and Northern Europe, 5.2 percent.

But which are the countries with the highest all-in transaction costs? The Top Ten are: 1. Russia - 25 percent 2. Bulgaria - 24.88 percent

4. Belgium - 17.88 percent 5. Italy - 17 percent 6. France - 16.3 percent 7. Luxembourg - 15.65 percent 8. Greece - 15.48 percent 9. Croatia - 13.87 percent 10. Portugal - 13.65 percent Other investment locations popular with the Irish and in the top half of the list include Spain, 11th on 12.16 percent; Germany, 13th at 11.45 percent, and, for instance, Cyprus, 14th on 11.09 percent. By contrast, the Top Ten countries with the best value in terms of overall property transaction costs are: 1. Denmark - 2.05 percent 2. Lithuania - 2.35 percent 3. Slovakia - 3.10 percent 4. Estonia - 3.81 percent 5. United Kingdom - 5.03 percent. 6. Ukraine - 5.05 percent 7. Norway - 5.06 percent 8. Latvia - 5.16 percent 9. Macedonia - 5.24 percent 10. Montenegro - 5.28 percent


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And Ireland? Ireland comes in a creditable 23rd out of 37 with total transaction costs of 6.96 percent on average - so well done Irish estate agents! Interestingly, the survey finds that a country’s legal system affects several aspects of its transaction costs, including its system of property registration and the role of lawyers and notaries. The main groupings under legal systems are: English Common Law: the United Kingdom, Ireland and Cyprus French Commercial Code: France. Belgium, Greece, Italy, Luxembourg, Malta, Monaco, The Netherlands, Spain, Portugal and Turkey German Commercial Code: Germany, Austria, Switzerland, Macedonia, Montenegro, Serbia and Slovakia Scandinavian Civil Law: Denmark, Finland, Norway and Sweden Socialist Civil Law: Bulgaria, Romania, Croatia, The Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovenia, Ukraine and Russia Using that analysis, countries with French legal origins have, on average, the highest transaction costs at 14.4 percent. The Socialist countries are next, averaging 10 percent. The countries using English Common Law are next on 7.7 percent. The German countries are at 7.25 percent, and the Scandinavians at 5.9 percent. It’s also interesting that most countries impose higher costs on new properties. That happens because in general it’s regarded as a progressive tax measure - the rationale being that richer people and second-home buyers are more inclined to buy brand-new properties. That’s by no means always true, however. Whereas nowadays, on balance, it may be true that the majority of apartment-buyers go for new-builds, it’s probably also true that the majority of house-buyers go for existing properties.

rate for transactions, estate agents’ charges depend on the value of the property. And on top of that, although a good deal of what the notary charges goes to the State, try finding out exactly how much goes where. You’ll be lucky! • Rising demand is more likely to have a stronger impact on house prices in countries with lower transaction costs than in countries with higher ones. The simple fact is that lower transaction costs stimulate market turnover and enhance the responsiveness of the housing market to other economic stimuli, such as a fall in interest rates, for example. • A study of property transaction costs by the European Monetary Federation (EMF) in 2001 showed that in countries where costs are high, people are more likely to postpone a decision to buy property if, for instance, there’s a rise in interest rates. • In countries where transaction costs are high, house hunters are more likely to rent property than to buy. Over time, that inclination can become part of a country’s property culture, as in Germany and particularly Berlin, for instance. So that even when it becomes more financially attractive to buy, people are still inclined to rent. • High real estate transaction costs have an adverse effect on labour mobility, and as a result lead to higher unemployment. In other words, if the cost of moving is prohibitive, unemployed workers who could get a job elsewhere simply can’t afford to make the move. And that’s bad for the entire economy. Knowing your transaction costs gives you a competitive edge when it comes to negotiating a deal. A seller in Belgium, for instance, may well expect you to push him further on the asking price because he knows you’re facing a VAT bill of 21 percent. But do you - the buyer - know? You will when you get the bill.

Value Added Tax on new properties is a good example. Slovakia has VAT at 23 percent on new residential property; Belgium - 21 percent; Monaco - 20.6 percent; Hungary, Ukraine and Italy (for luxury homes) - 20 percent; France - 19.6 percent; Greece and The Netherlands - 19 percent; Latvia, Lithuania and Macedonia - 18 percent; Montenegro - 17 percent; Slovenia - 8.5 percent; Serbia - 8 percent; Poland and Spain - 7 percent. It’s no coincidence that in France, for instance, where the Government introduced the leaseback system in 1976 to ensure an adequate supply of good quality accommodation in prime tourism areas, the main incentive was that the usual VAT of 19.6 percent on new builds would be waived or repaid immediately – depending on the scheme. It’s an inducement which remains a significant deciding factor for French and overseas buyers alike. Big Irony The big irony underlined by this survey is that, while high transaction charges generate more cash in the short to medium term for everyone involved in the sale transaction, whether it’s estate agents, notaries or the Exchequer - they are in the end counterproductive in terms of market activity. Here are five big reasons why: • High transaction costs are correlated with lower transaction volumes and with less-transparent deals, though the two don’t necessarily always apply together. France, though a highlydeveloped market, is a good example. Instead of charging a flat

Source: Global Property Guide

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Pictured at the IPFMA (Irish Property & Facility Management Association), ‘The Vertical Boulevard – The Future of Mixed Use Development’, at Croke Park in October were (l - r): Tom Dunne of DIT, Vice-Chairman of the IPFMA, Cliodhna O’Donoghue, Conference Chair and Fintan McNamara, Chief Executive, IPAV.

The highly topical issue of high rise intensification of city development with mixed use schemes was debated at this year’s Irish Property & Facility Management Association’s (IPFMA) conference in Dublin in October. This 5th conference to be held by the IPFMA was on ‘The Vertical Boulevard – the Future for Mixed Use Development’. Distinguished Irish and overseas professionals in architecture, construction and investment examined the considerable challenges currently facing developers and investors in developing high value sites in the capital city. They focused on whether highly intensified vertical landmark buildings, with mixed leisure, office, retail and residential use, is the way forward to meet high investment site costs, with Dublin’s future lying in ‘vertical boulevards’. In his opening remarks, IPFMA chairman David O’Brien said that “in recent months very large sums of money have been paid for relatively small parcels of land in Dublin. Developers and investors may very well seek to secure their investment with landmark buildings and vertical intensification.” “We do know that they face considerable challenges in developing high value sites, without damaging the integrity and value of

WHAT IS THE FUTURE FOR MIXED USE PROPERTY DEVELOPMENT?

their investment. This necessitates a strategy of vertical intensification with innovative and landmark design criteria, coupled with a sustainable mix of uses. However, Dublin has virtually no tall buildings and the planners have resisted granting permission for any form of skyscraper in the past”, stated Mr. O’Brien. “As you know there are a number of high profile mixed use developments going through the planning process at the moment. Dublin city councillors in the southeast rejected plans by developer Sean Dunne for the high rise redevelopment of the Ballsbridge Jurys and Berkeley Court sites”, Mr. O’Brien pointed out to his audience of over 150 delegates. “They said one of their main concerns about the plan was that it included two office blocks, which was a breach of the site's zoning. Clearly there are issues to be resolved here”. Conference speakers included John Bruder, managing director of Treasury Holdings in Ireland and Eric Kuhne, an internationally acclaimed architect whose company is currently building major mixed use centres in the UK and Northern Ireland. These include the Titanic Quarter in Belfast, a new urban Regeneration Project on the site of

the Harland & Wolff Docks along the Lagan River. Well known authority Dr. Brendan Williams of the School of Geography, Planning & Environmental Economics, UCD, (who has died since) addressed the planning and development aspects, while Owen O’Neill, a director of Lending ~ Ireland at Anglo Irish Bank, discussed investment. Michael Ostinelli, managing director, Michael Ostinelli Associates, spoke about human resources. Commenting in particular in relation to the property and facilities management profession, David O’Brien declared: “I believe that this whole issue of high rise intensification will affect all of us in the property and facilities management industry for many years to come”. “In the past, our industry has tended to specialise in specific areas of residential, retail, commercial etc. However, in order for companies to provide a holistic solution for our clients, we will have to provide a service that encompasses all of these disciplines and be able to integrate the differing and sometimes conflicting requirements of the stakeholders in the development”.

€2,000 PER YEAR TO CLIP A BUSH! The following remark was made to the Ceann Comhairle, John O’Donoghue in the Dáil by Labour’s Joan Burton on October 18 last: “I understand the Minister for the Environment, Heritage and Local Government is also taking an interest in this area (property management). Who will deal with management companies in the future? It is listed for the Department of Justice, Equality and Law Reform but I understand the Minister for the Environment, Heritage and Local Government, as he should, will take an interest in this issue. Thousands of people are now living in homes subject to very high management company charges. Perhaps not in Kerry, a Cheann Comhairle, but in Dublin West people are paying €2,000 a year to have a little bush clipped at the front of their house.”

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GORMLEY PUBLISHES PLANNING GUIDELINES ON DESIGN STANDARDS FOR NEW APARTMENTS The Minister for the Environment, Heritage and Local Government, John Gormley TD, recently published guidelines for planning authorities on Sustainable Urban Housing: Design Standards for New Apartments. Launching the guidelines, the Minister pointed out that apartments account for over 20% of all new dwellings nationally, and about 80% in Dublin City. “With about 600,000 new dwellings required in Ireland over the next decade, it is vitally important that the design of apartments provides a good quality of life for their occupants, including families with children,” he said. The primary aim of the guidelines is to promote successful apartment living, by responding to people’s reasonable demand for welldesigned apartments, particularly in terms of better internal space standards, including storage space. The guidelines pay particular attention to the needs of children – for play space, for quiet study areas, for places to store bikes and buggies. While the guidelines set a range of minimum standards for the design and layout of new apartments, sufficient flexibility has been built in to allow both developers and planning authorities to respond to particular local housing needs, for example, the trend towards smaller household sizes and the need to ensure affordability for first-time buyers The guidelines require the following minimum overall floor areas for apartments: • One-Bedroom - 45 sq m • Two-Bedroom - 73 sq m • Three –Bedroom - 90 sq m

The Minister highlighted the need for apartment developments to be located in neighbourhoods which, through good design, provide good integrated services such as public transport, schools, shops etc. They also need to be designed with quality living in mind through better layout and safety features. “This means making sure that the people have easy access to public transport, schools, health services, crèches, shops and so on. It also means that residential developments are better designed to encourage family living, with pedestrian safety paramount.” Apartment developments can contribute to the achievement of higher densities in cities and towns, and thus to more sustainable forms of urban settlement. Higher density developments should result in more compact settlements and can help to sustain the viability of public transport. Building on these apartment guidelines, the Department is preparing draft guidelines for New Sustainable Residential Developments for issuing in the near future to replace the 1999 Residential Density Guidelines. These new guidelines will comprehensively address the need for high-quality, fully integrated development. The guidelines will be accompanied by a design guide booklet which will illustrate best practice in sustainable residential development, across a range of scales and issues. The new apartment guidelines are being issued to planning authorities and An Bord Pleanála under section 28 of the 2000 Planning Act. This means that the guidelines have to be taken into account firstly in framing development plan standards for new apartments, and secondly in determining planning applications and appeals relating to proposed apartment developments. Copies of the finalised apartment design guidelines are available to view and download from the Department’s website – www.environ.ie

INVEST IN SANTA LAND! Lapland is the northernmost region in Finland and the whole EU. It has a total land area of 100,000 km2.Tourism is one of the most important lines of business in Lapland. Transport connections to the region are good, thanks to an extensive road network and fluent railway connections and daily flight connections from Kittila airport which is just 14 km away from the ski resort of Levi. It is expected that there will be a 300% growth in property in this area over the next 10 years.Over the next 12 months it is estimated that 300 million Euros will be invested in Levi alone with Donal Trump being the main investor. Due to the restrictive construction and planning within this area, there is currently a shortage of accommodation, thus resulting in Levi being an exclusive niche market.

The Aurora Sky Development: Aurora Sky is a five star apart hotel with 83 Luxury fully furnished apartments which will surpass standards of all hotels currently available in Lapland. Built at the foot of the southern downhill worldclass Levi skiing slopes, there is direct access straight to the slopes and a magnificent view that reaches even to the Yllas-mountains. With a long ski season lasting from November until May and an astonishing 48 slopes and 26 lifts to service them, Levi is Finland’s Premier Ski Resort. Affluent stylish and stunning are but a few words to describe this development with Studio apartments starting at €136,083 and two bed apartments from €244,272. For further information contact Heffernan Estates, 35 Morgan St Waterford Lo-Call-1890 333 400 Email-estates@heffernan.ie the property professional

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BOOM OR BUST: THE CONFIDENCE CRISIS By Billy Dixon, Expert in Personal and Corporate Projection

THE TREND…….

CONFIDENCE AND TRUST

“National Irish House Prices declined by 0.3%”

It is important that auctioneers are seen as part of the solution and not part of the problem. Therefore, the skills of building “Confidence and Trust” become the basis of building customer confidence and underpinning future marketing plans.

(source: Permanent tsb bank and ESRI, August 2007)

THE TRANSLATION…….. “August 2006 Average house price 306.173 euro” “August 2007 Average house price 300.375 euro” The Exchequer’s figures for the first nine months of the year show big drops in property related taxes signalling a fall in activity. Niall O’Grady, Head of marketing Permanent tsb bank said: “while we have seen attention grabbing stories about declines in the asking prices for some houses, the index confirms that the actual rate of change in house prices across the country remains modest. Since the start of the year, prices have declined by 3.3% on average. While there is no doubt that we have enjoyed unprecedented benefits of the “boom” in the housing market, the big question currently under debate is “Are we to expect the “bust” and what does that mean for the economy and for the individual. In uncertain times the majority of us may become risk averse and seek out certainty and security. We will be influenced by those people we have confidence in and in whom we trust. The “amateur” and even the “professional” investor may now feel vulnerable and exposed. This market uncertainty means that the advice given by “financial experts” may well be treated with scepticism and as a consequence, investments may be unloaded making the market more unstable.

A market is built upon confidence; it should be at the centre of every organisation’s strategy. All individuals within an organisation should be aware of the co-operative ethos, the expected behaviours and most importantly of all, customer expectations. It is interesting to note that during a national crisis the public demand certain characteristics from their political leaders and it is no different for financial advisors. Personal confidence is reflected in our behaviour and body language. This is why individuals in business need to pay particular attention to things like their posture, how they approach people, their handshakes and tone of voice. Get these things wrong and building a relationship becomes much more difficult. Every human relationship is built upon trust whether it is professional or personal. In an unstable market it is trust that secures the deal and it is trust that maintains a customer base. Interact Trust comes down to how individuals interact; it is based upon sincerity rather than some formula sales technique. We tend not to trust others on initial meeting, rather it is built over a period of time and through personal interactions. As we tend to trust others more quickly if we like them, good interpersonal skills are essential for business success. Good interpersonal skills can be summarised under one simple mantra: “make others feel important”. Do this and you create the boomerang effect as we are all drawn to people who make us feel important. Building Confidence and Trust is at the heart and soul of customer care and in a competitive rapidly changing market, the auctioneer that builds the “trusted advisor” relationship with his/her clients will navigate uncertainty, continue to thrive and maintain competitive advantage.

Billy Dixon speaking at IPAV’s Dublin Seminar

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BUILDING ENERGY RATING CERTIFICATION By Brenda Jordan, Managing Director, National Energy Assessors

Home buyers who in the past often missed the energy efficient story in the legal and banking ordeal involved in buying a house, have now become more savvy. And the introduction of the Building Energy Rating (BER) in January 2007 has been central in focusing attention on energy issues. Developers have also seen the marketing benefits of achieving higher energy ratings and what was once associated with premium developments or the noble aim of ‘going green’ is becoming more mainstream. BER Certificates are now an essential element of closing that sale for property professionals. What are the key dates in Ireland? • New dwellings that have applied for and have been granted planning permission on or after 1 January 2007 • New non-residential buildings that have applied for and have been granted planning permission on or after 1 July 2008 • Existing buildings when let or sold on or after 1 January 2009 The operative dates for the BER cited above will not apply to: • New dwellings for which planning permission was applied for on or before 31 December, 2006 and which are substantially completed by 30 June 2008 • New non-residential buildings for which planning permission is applied for on or before 30 June, 2008 and which are substantially completed by 30 June, 2010 (except where such a building is offered for a second or subsequent sale/letting)

HOW IS BER CALCULATED? BER calculations take into account the type of building fabric, ventilation, space & water heating and lighting. These values coupled with measurements taken from drawings of the property, culminate in the achievement of a BER Certificate. The survey must be carried out by a Sustainable Energy Ireland registered assessor and will be paid for by the owner of the house.

WHAT IF A BUILDING HAS NOT BEEN CONSTRUCTED? Where a building is being offered for sale or letting on the basis of plans a provisional BER Certificate must be available. This provisional BER must be provided by prospective customers on expression of interest in a particular property. A provisional BER Certificate lapses on completion of the building or after 24 months whichever is sooner.

IF A BUILDING HAS BEEN CONSTRUCTED? On completion of construction, a full BER Certificate and relevant

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advisory report is required to be presented to the purchaser or tenant prior to taking occupancy of the building. This full BER Certificate is purchased by the seller or landlord of the property. As the slow down shifts some of the economic power from seller to buyer, home-buyers are beginning to look around for additional value. And energy efficiency is moving up their agenda. The detached home buyer tends to be a trade upper and is already conscious of the costs involved in running a house. These informed consumers are now taking energy efficiency into consideration in a property decision. (National Energy Assessors is a leading Irish energy consultancy company. NEA is committed to providing independent advice on achieving energy efficiency and has the largest panel of SEI registered BER assessors available nationwide. NEA can partner with you in providing BER certification for your clients or work with developer clients in reaching maximum energy ratings for their housing developments.) For further comment or information contact: Louise Mc Donnell, Head of Marketing, NEA, T: 096 79477 or M: 087 929 1125


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DOCKLANDS AUTHORITY ANNOUNCES PROVISIONAL PREFERRED BIDDER FOR U2 TOWER The Dublin Docklands Development Authority has announced that Geranger Ltd, a consortium consisting of Ballymore Properties, Patrick McKillen and August Partners (U2 Band members and management) has been selected as the provisional preferred bidder to design, construct and finance the U2 Tower and Britain Quay Building, one of the most significant architectural projects to be delivered in the regeneration of the Docklands area. The consortiumâ&#x20AC;&#x2122;s architects, Foster + Partners, have proposed a stunning design for the 120 metre high tower and adjacent Britain Quay site uniquely situated at the confluence of three waterways, the River Liffey, River Dodder and Grand Canal. The inspirational building will include a public viewing platform at 100 metres, a public amenity area at the base; and hotel, retail, and residential accommodation including 20% social and affordable housing. At the top of the Tower, the U2 studio is included as a suspended egg shape pod.

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WHAT FRIENDS THOU HAST... JOHN REID, BARRISTER AND TOWN PLANNER, A PERSONAL NOTE…

By Peter Brady, Chairman, IPAV Education Advisory Committee Peter Brady making a farewell presentation to John Reid

It is often said that we forget the most important things in life because we are overcome by the present. In such times we fail to recognise the significance of our achievements, people we have met, friendships made and so on. The world, as Mr Wordsworth wrote, “is too much with us”. I was reminded of this lately when John Reid, Barrister and Town Planner retired from the Education Advisory Committee. On these occasions, one is tempted to urge the retiree to stay. And this was my first reaction to the announcement by John that it was time for him to step down. I now realise that my instincts were fuelled by a desire to hang on to friendship, companionship and a strong professional influence that has left its print on me personally and professionally. It is, of course, a selfish response to a situation and fails to take note of the appropriateness of the decision for the person involved. Sometimes the harder decision is to go. And I like to think this was the case with John.

KENT STATION I first met John Reid in 1991. It was one of those occasions that was just right and we hit it off at once! Picking him up from Kent Station in Cork and encountering that strong northern accent in the southern capital even then, was a strange experience for me.

MULTI-CULTURE HOW ARE YOU! He had taken time out of his own practice in Dublin to travel south to meet me on the invitation of Liam O Donnell, former CEO of IPAV. I was struck by his stature, his accent (in sharp contrast to mine). And, to tell the truth, I was a little nervous of meeting this Barrister and Town Planning expert. I was a mere teacher in a then changing institution. I believed I had little authority - I was neither teacher nor lecturer; I did not have the usual regime of the teacher. Our college was undergoing the transformation from a small secondary school to a college of further education at the time. It was exciting to be involved in education because it allowed institutions to respond to the economic situation without the dead hand of central control. Our college responded to the situation by developing new programmes to meet the needs of students who could not, or did not, wish to go to University or other HE Institutions.

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The Certificate in Auctioneering and Estate Agency was launched in the college in September 1991. My job was to develop the programme. I had no need to be fearful. Once I met John I was immediately at ease. I was not made to feel uncomfortable or ill at ease in any way as one can be on such occasions. It was like meeting an old friend…..I knew from the start that John was there for the long haul. This was not a man that would walk away from a situation. Don’t ask me how I knew that …..but I instinctly felt it!!! John’s contribution to IPAV is too great to deal with comprehensively here but it includes the following roles: Consultant, Examiner, External Examiner and Member of the Education Advisory Committee.

NEVER TOO BUSY He was never too busy to carry out any of the roles he assumed. His experience, training and keen insights have helped to steer the programme through many challenging times and brought it to the stage where it is today. With other members of the Education Advisory Committee he has contributed in no insignificant way to the creation of an education and training programme that has provided a strong foundation for many students to pursue professional careers in the property industry. His presence on the Education Advisory Committee has added authority to it. His academic qualifications are matched by a keen interest in people and places. His interest in travel has taken him from Patagonia to Portugal from the N7 to Route 66!! He is a biker and a free spirit at heart with a deep interest in history and culture. He is, above all, a gentle man and a great and true friend. While I will miss his contribution to the Education Advisory Committee I have no doubt we will meet – be it Rostrevor, Dublin or Cork. In the meantime, I can reflect on a friendship that I treasure and have “grappled to my soul with hoops of steel”. For the good times and the great times John, a thousand thanks!!


Property magazine 2007 winter  
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