Vol. 499 No. 2
11 Mr. Rabbitte asked the Minister for the Environment and Local Government if he has received a copy of the promised voluntary code of practice to deal with gazumping from the Irish Home Builders' Association; his views on whether it is adequate; the plans, if any, he has to take further action to control this anti-social practice; and if he will make a statement on the matter. [2051/99]
I received copies of the Irish Home Builders' Association's voluntary code of practice on Monday the day it was launched. Although it is a voluntary code in the sense that the industry has developed the code itself, I understand that adherence to the code will be mandatory for all members of the association. The introduction by the industry of such a voluntary code of practice was, of course, one of the recommendations of the Bacon report. The report also recommended that if this approach does not work, widening of the statutory role of the Director of Consumer Affairs in this area should be considered.
The protection afforded to the new house purchaser by the prevention of an increase in price and prohibition on acceptance of any offer from any other party for a seven week period following payment of a booking deposit represents an improvement on the current situation.
The Government's approach in relation to elimination of gazumping is to pursue practical measures, through support for the introduction of a code of practice, which will help to improve the situation in the short-term, while also arranging to have the possibility of any appropriate legal response carefully and thoroughly examined.
To this end and following an approach by me in this regard, I understand that the Attorney General has requested the Law Reform Commission to review the procedure of payment of booking deposits and the associated practice of gazumping and to submit to the Attorney General proposals for reform in respect of those matters, if any, that the commission considers appropriate.
While the effects of the Irish Home Builders' Association's code of practice remain to be seen, it is necessary to have the scope for a legislative approach thoroughly examined. The Law Reform Commission is best positioned to do this. The possibility of a legislative approach to gazumping if the voluntary approach does not work should help to ensure maximum commitment by all concerned to ensuring the effectiveness of the code of practice.
It should also be noted that the action taken by the Government to curb overheating in the housing market will help to remove the conditions in which practices such as gazumping can develop and there is evidence which suggests a moderation in the rate of house price increases.
