I READ an account recently of the assassination of the Roman emperor Gaius Caligula in AD 41. Caligula was a particularly nasty piece of work, bumped off by an army sergeant, Cassius Chaerea, who he subjected to continuous humiliation and bullying, writes FINTAN McNAMARA
Feelings the pangs of guilt, Caligula's elite German bodyguard ran amok, killing all around them before they were eventually brought to order and calmed by an auctioneer named Euarestus Arruntius.
Two thousand years on, the leadership skills of Arruntius might help calm some of the fears raised on the airwaves recently by the National Consumer Agency concerning auctioneers releasing misleading sale prices and creating a false market.
The National Consumer Agency has a somewhat shorter history than the auctioneering profession. It was established in May 2007 under the National Consumer Protection Act with a budget of some
€8 million. While with us only one year, it is certainly determined to make us aware of its existence.
Together with the voluntary Consumers Association of Ireland, it deals with routine complaints from consumers in relation to such matters as poor public services, misleading pricing, anti-competitive behaviour, etc. In the autumn of 2006, the Law Reform Commission released its recommendations on the regulations governing apartment living and subsequently the NCA organised a forum comprising the relevant stakeholders.
It recently produced a recommended code of practice for developers, management companies and agents managing private apartment complexes. The new code received lots of airtime and will surely be a great help to the National Property Services Regulatory Authority, which already has produced a code of practice of its own for estate agents.
However, it is far from clear what the effects of the NCA's media intervention in the house sales controversy will be. It is quite possible that attempts at resolving this issue in the full glare of the media may turn out to be counterproductive if further remedial action is not taken. I remember, two years after purchasing my first home some years back, noticing another similar property on the market for £6,000 more. I recall remarking to my local butcher that I felt the agents would not achieve that price, to which he responded: "Ah, but they will get close to it," which subsequently proved correct. In the current situation in relation to house prices, I would be unable to ascertain the price.
The Irish Times, which first drew the attention of the two professional auctioneering bodies to the alleged problem of grossly inflated prices, claimed the bodies were able to identify the discrepancies and inflated prices relayed to them because of their close tracking of house sales. They were undoubtedly aware of who the offenders were and were in a position to at least encourage the capricious agents to mend their ways. This appeared to be the probable direction events would have taken, until the NCA took to the airwaves.
It is not clear at all how wide of the mark the inflated prices were or how extensive the problem was in the first place. The anecdotal evidence is conflicting, but one thing is now certain - unless there are legislative changes or an acceptance that established practices, which have enabled the market to function for decades and do not necessarily conflict with the law, are allowed to continue, then there will be a dearth of information in the marketplace, thus placing consumers at a serious disadvantage.
Data Protection Commissioner Billy Hawkes was quoted in The Irish Times on May 12th as saying that he cannot see why auctioneers cannot give generalised information on house prices, but Ms Fitzgerald of the NCA takes a more absolutist approach and demands that it is either the exact price or nothing at all. Past experience has shown that vendors and purchasers are unwilling to facilitate disclosure of exact prices.
The relevant sections of the Consumer Protection Act 2007 on which Ms Fitzgerald relies appear to be Sections 41, 42, 43, 46 and 47. "Section 41 (1) requires that a trader may not engage in unfair commercial practice . . . that would cause an average consumer to make a transactional decision that the average consumer would not otherwise make." The section points to standards of skill, care, diligence and good faith in the trader's field of activity that must be employed to avoid this scenario. Interestingly, it goes on to state that "the commercial practice shall be considered in its factual context, taking account of all its features and the circumstances". There certainly appears to be some room for manoeuvre here in the interpretation of the Act.
Section 42 (1) states that "a trader shall not engage in a misleading commercial practice", and Section 43 (1) of the Act states that "a commercial practice is misleading if it includes the provision of information in relation to any matter set out in subsection (3), in the case of auctioneers specifically S (3) (c), which refers to the price of a product, and that information would be likely to cause the average consumer to make a transactional decision that the average consumer would not otherwise make".
Section 43 (2) states that "a commercial practice is misleading if it would be likely to cause the average consumer to be deceived, or misled, in relation to any matter set out in subsection (3) and to make a transactional decision the average consumer would not otherwise make". Section 46 expands on the definition of "misleading" by making reference to the omission or concealment of material information the average consumer would need in the context of making an informed transactional decision.
S 46 (2)(i) is significant for estate agents, where it states that "a commercial practice is misleading if the trader (i) provides information that is unclear, unintelligible, ambiguous or untimely". In this regard there have been claims that house sale prices have been circulated to the media long after the completion of the transaction and when the market may have moved in the interval. This, if correct, is bad practice. Finally, in Section 47: "a trader who engages in any misleading commercial practice described in section 43 (1) or (2) commits an offence and is liable on conviction . . . to fines and penalties".
In the interest of avoiding possible prosecution under the National Consumer Protection Act and while awaiting further clarity on this issue, IPAV is urging its members to be aware of these statutory obligations. It has agreed to recommend that members give the exact price, having secured the permission of both vendors and purchasers, or else say nothing at all. However, this is on the understanding that a speedy remedy is found.
Clearly it is time to clear up the confusion and cast more light on how narrowly or broadly the relevant sections of the Act may be interpreted, and to discover whether it was really the intention of the Oireachtas that only the exact figure or none at all be circulated in relation to house price sales.
• Fintan McNamara is chief executive of the Institute of Professional Auctioneers and Valuers