Keeping their house in order: How PSRA regulation has raised the bar for Ireland’s property services sector
Maeve Hogan, chief executive of the Property Services Regulatory Authority; Eamon O’Flaherty, managing director of Sherry Fitzgerald Brady O'Flaherty; and Niamh Giffney, managing director of DNG Royal County
The property services sector has seen many changes over the past two decades. Estate agents have been required to adapt to market conditions and advances in technology have transformed the way they market and manage the sale of property, greatly influencing how the sector operates today.
Perhaps the most significant change to the sector has been the introduction of regulation.
With the establishment of the Property Services Regulatory Authority (PSRA) in 2012 came a comprehensive regulatory framework for the sector, underpinned by a robust licensing system for all property services providers, including auctioneers, and estate, letting and management agents.
The PSRA’s mission is to protect the interests of the public in their interaction with property services providers.
As managing director of DNG Royal County, an estate agent in Navan, Co Meath, Niamh Giffney has seen first-hand the benefits of operating in a regulated environment.
“When I started out in 2006 we weren’t a regulated industry. Since the PSRA was established in 2012 we have embraced the changes in terms of regulation, licensing and continuous professional development,” she says.
Today, the provision of property services, such as the selling of property, can only be carried out by licensed property services providers. Licenses are issued by the PSRA only when certain qualifying criteria have been met, including the requirement to have specific academic qualifications.
The framework delivered by the PSRA also sets out regulations for the management of client monies, the minimum standards of service provision that must be upheld by property services providers and the maintenance of professional competence. The PSRA has the power to sanction providers who have failed to comply with these and other regulations.
For Giffney, regulation fosters a culture of professionalism and demands higher standards of service provision from those operating in the sector.
“Operating within a regulated sector provides agents with clear rules and standards to be adhered to, which ensures the delivery of a standardised and professional service across the sector,” she says.
Fellow estate agent Eamon O’Flaherty agrees. O’Flaherty is the managing director of Sherry Fitzgerald Brady O’Flaherty, which has offices in the Kildare towns of Maynooth and Celbridge. He has worked in the industry for over 30 years. With his years of experience both pre and post regulation, O’Flaherty is well placed to comment on the changes the PSRA has introduced.
“The advent of the PSRA has been a complete game changer,” he says. “In the pre-regulation years we didn’t have service agreements, otherwise known as contracts. There was no mention of anti-money laundering. Now passports and proof of address are critical and mandatory supporting documentation we require from all our clients in advance of the commencement of our relationships with our clients and this has become the norm,” O’Flaherty says.
Both Giffney and O’Flaherty see the introduction of mandatory Property Services Agreements, or Letters of Engagement, as a major benefit of regulation for both agents and consumers.
A Property Services Agreement is a legally binding contract that details the terms and conditions both parties must adhere to. This agreement includes a statement of fees and any other expenses that the consumer might incur. It also sets out the obligations of both parties and the complaints procedures that should be followed if the consumer is not satisfied with any aspect of the service being provided.
“The Property Services Agreement helps our clients understand our role. It also provides them with consumer protections and gives them confidence that we will act in the most professional manner,” says Giffney.
For O’Flaherty, the greatest benefit of a regulated environment is transparency. “Everybody has the certainty that comes from having clear rules and no ambiguity about how we should operate,” he says.
Client monies and booking deposits must be properly managed and deposited in a dedicated client account. The estate agent is prohibited from using client monies for anything other than their intended purpose. This is closely supervised by the PSRA who conduct regular compliance audits on their licensees’ client accounts.
A clear record of all offers received in respect of a property for sale must be maintained by the agent. The receipt of an offer must be acknowledged in writing to the potential purchaser and details of the offer must be communicated to the vendor.
“The changes give people far greater visibility of the whole process. We are obliged by law to record offers once received. We know exactly who we are selling the property for, and there is no ambiguity about fees. It’s all there in black and white. Regulation has made everything more efficient and transparent,” says O’Flaherty.
O’Flaherty believes that the introduction of the Residential Property Price Register has also contributed to greater transparency in the sector and advises anyone buying or selling a property to check the Register for similar properties in the area.
The Residential Property Price Register contains details of all residential properties sold in Ireland since 2010, including address, date of sale and sale price. The Register is published by the PSRA and is accessible to everyone.
“The figures are there in black and white, doing away with armchair experts who might tell you so and so got X or Y for their house down the road,” says O’Flaherty.
The administrative effort and financial cost of complying with regulation can be significant for estate agents. Each business and individual property services provider is subject to an annual licence fee.
Providers must also make a yearly contribution to the PSRA compensation fund which protects consumers against financial losses suffered as a result of dishonesty by a licensed provider.
Professional indemnity insurance and the requirement to complete continuous professional development also increases operational costs for property services providers, as does the drawing up of contracts and the carrying out of customer due diligence.
For O’Flaherty, regulation “protects consumers and it protects reputable agents like ourselves. It upholds the standards that we must adhere to, gives the industry a clear framework within which to work, and ensures that bad practice is dealt with and, where necessary, sanctions imposed. We have the guidelines, we know what to do, and we know what’s right is right.”
For more information, visit psr.ie
