SOLICITORS SHOULD not be permitted to act for both sides in a property transaction, except in limited circumstances provided for in law, according to a Law Society task force on the subject. Its report will be discussed by the council of the society next Friday.
The prohibition should extend to voluntary transactions between, for example, family members where a parent signs a home over to a child, the task force concluded. These are permitted in many jurisdictions. The task force was set up in light of concerns over the same solicitor acting for both purchaser and vendor in conveyancing transactions. The practice was also the subject of a number of complaints to the Law Society.
The task force carried out a consultation process and examined the practice in a large number of other jurisdictions, in the common and civil law traditions. This confirmed every other common law jurisdiction, and most civil law ones, had a prohibition on the same solicitor acting for both sides in a property transaction.
Many of these jurisdictions permitted a range of exceptions, but the task force concluded most such exceptions were unjustified.
On the issue of voluntary transfers of property, usually between family members, the task force said the case for the continuation of allowing one lawyer to act for both sides was undermined by a survey by the Health Service Executive and UCD which found 94 per cent of financial abuse of the elderly in Ireland was perpetrated by family members.
This survey showed a 91 per cent instance of home ownership by elderly Irish people, and among the financial abuse identified were many instances of them being forced or misled into “signing over” the family home.
The task force did not see how one legal adviser could give independent or impartial advice to donors and their donees.
It recommended that in the case of voluntary transfers and transfers below market value there should be a total prohibition on solicitors acting for both sides.
On transfers for market value, the task force noted there had been adverse judicial comment on the lack of a Law Society prohibition on one lawyer acting for both sides. There should be a prohibition in such cases, it stated, except where both parties were associated companies or were “qualified parties” under EU regulations.
Monday, July 9, 2012
Lawyers should not act for two sides in property deals - report - The Irish Times - Mon, Jul 09, 2012
A TOTAL of €11.3 million was achieved for 78 properties sold at yesterday’s Allsop Space auction in Dublin’s Shelbourne Hotel.
Just four of the properties on offer failed to sell, while the vast majority of those sold went for substantially more than their reserves.
About 2,000 people attended the auction throughout the day.
An estate of 14 unfinished houses, a 700-year-old castle and an 743sq m (8,000sq ft) Georgian building on Dublin’s Merrion Square were three of the most hotly contested lots, with all of them making much more than their reserves.
The housing development at Annagh Banks in Castlemaine, Co Kerry, was offered as a single lot and had a reserve of just €50,000.
The development on 3.03 acres remains unfinished but that did not detract bidders and over a 20-minute period yesterday morning the price inched up from below its reserve to its selling price of €235,000.
The Georgian house at 26 Merrion Square had a reserve of €1 million and, as predicted, it was the star at the auction.
The house, on the Holles Street side, has rear access on to Denzille Lane and planning permission for a 178sq m (1,916sq ft) extension. It sold for €1.42 million.
The castle on the banks of the river Barrow in Athy, Co Kildare, was offered with a reserve not to exceed €50,000.
White’s Castle was built in 1417 by Sir John Talbot, viceroy of Ireland, and the new kings of the castle got it for €195,000. It was bought by a Galway family and it is understood that it will be for personal use and will not be turned into a restaurant or pub as had been thought.
Commercial properties performed strongly at the auction and several in the licensed and leisure sector far exceeded their reserve prices.
The 20-bedroom Drinagh Court Hotel in Wexford sold for €600,000, above a reserve of €230,000. The former owner was at the auction and, after failing to win it back, he addressed the room and spoke of his upset at losing his livelihood.
Dan Finnerty had owned the hotel for 15 years until his company went into receivership last December. He said that if he had been given a chance by the lender, Bank of Scotland, he would have been able to service a loan based on yesterday’s selling price but the bank had refused to entertain the idea.
Other commercial properties which sold included the Stout Bar and No 1 Richmond Hill in Rathmines. It went for €835,000, above its reserve of €600,000. Ruby Finnegan’s pub in Ballyfermot sold for €415,000, €165,000 over the reserve.
The auction’s success was describe as “fantastic news”, by Angela Keegan of Irish Times-owned property website myhome.ie.
“It was a real business-like auction and there was some really strong bidding and I walked out saying the investor is back without a doubt,” she said.
“I’d be cautiously optimistic. I wouldn’t be losing the run of myself.”
Director of auctions at Allsop Space, Robert Hoban, said that a “positive message was sent out today about the property market in general. Once again, it is clear that there is indeed a trading marketplace.”
Yesterday's auction of distressed properties served as a welcome reality check. While many of the properties on offer sold for considerably more than their asking prices, this was only because those asking prices were so low in the first place.
Ever since UK auctioneers Allsop first began conducting auctions of Irish distressed properties last year, they have provided valuable additional information on the true state of the Irish property market. With the official CSO house price statistics only including properties purchased with a mortgage, cash sales, which now account for over one-third of all transactions in the housing market, are excluded.
This almost certainly means that the official CSO figures are understating the true extent of the fall in Irish house prices. While the CSO figures point to a 50pc fall in house prices nationwide, the Allsop sales point to a drop of somewhere between 60pc and 70pc.
Although this might seem like bad news for sellers, it isn't necessarily the case. Many potential buyers, fearful that prices have further to fall, are holding back from purchasing. This is particularly true outside of Dublin. Why buy a house today if you can buy it more cheaply tomorrow?
If distressed property auctions help to produce more realistic prices in the market, prices that buyers can trust, then the volume of transactions will increase and the housing market will finally bottom out.
TRADING will continue as normal at the Douglas Court shopping centre in Cork, which entered receivership under KPMG yesterday.
Owned by Douglas Developments Ltd, a subsidiary of the Cork-based Shipton Group, the centre accommodates 59 units including flagship store Dunnes Stores. Joint receivers Kieran Wallace and David Swinburne of KPMG were appointed to the company yesterday by Bank of Scotland plc, following a request from the directors of Douglas Developments Ltd.
A spokesman for the centre confirmed that stores will continue to trade as normal during the process.
KMPG will examine the income and assets of the shopping centre in a bid to clear associated debts.
Traders in the centre, which include fashion, retail, food, homeware and restaurant outlets, were taken by surprise as the news circulated yesterday. Kojak’s barber shop opened at Douglas Court 15 years ago. Its owner, Aoife Cotter, said she received no official confirmation that her landlord had gone into receivership – she said she had heard the news from a neighbouring trader.
Janice McDermott, a manager at a centre outlet, received the news by text. “I only heard about it an hour ago at lunchtime. We know that some other shops were notified officially this morning but that’s all we know about it as yet,” she said.
Douglas Developments is a subsidiary of the retail management company Shipton Group, in which Clayton Love, Neill Love and Sarah Cronin are shareholders and directors. Shipton also owns the nearby Douglas Village shopping centre with flagship tenant Tesco. The Douglas Village centre remains closed following a devastating flash flood in the area 10 days ago.
Just one retail outlet is trading there, the First Plus pharmacy, which is serving customers from a temporary counter. The Douglas Village centre is likely to remain closed for a number of weeks while a major clean-up operation continues.
Shipton also operates the Blackpool shopping centre and adjacent retail park located on the northern outskirts of Cork city.
In a statement, spokesman Padraig McKeown confirmed the two other shopping centres will remain under Shipton’s control.
“All other shopping centres operated by the Shipton Group, including Douglas Village and the Blackpool shopping centres, remain under the control of the Shipton Group and are supported by Nama and its banks,” he said.
David Fitzsimons, chief executive of Retail Excellence Ireland, said the news about Douglas Court shopping centre was unfortunate and illustrated the “immense pressures” which existed in the retail industry.
“Retail Excellence Ireland will liaise with the receiver on behalf of members and their employees and ensure that their wellbeing is priority,” he said in a statement.
“We intend to meet the receiver to ensure that any rent reductions that were achieved by tenants are retained and that any vulnerable tenants and their employees are cared for,” he said.
Demolition of apartments to cost Nama €150,000, Noonan confirms - The Irish Times - Fri, Jul 06, 2012
Minister for Finance Michael Noonan has confirmed the removal of an apartment block in Longford is set to cost the National Asset Management Agency (Nama) €150,000.
Last week, Nama announced its intention to demolish an apartment block containing 12 apartments at the Gleann Riada estate in Longford town. Providing details of the background to the demolition in response to a parliamentary question by Sinn Féin’s Pearse Doherty, Mr Noonan said the block “had been subject to continuous vandalism and antisocial behaviour, including the removal of all fixtures and fittings, and had become a significant source of concern for neighbouring residents”.
Nama assumed loans on the property in December 2010 and Mr Noonan said the apartment block was poorly constructed, located on a flood plain and in the middle of an industrial estate.
The Minister for Finance said: “As a result of its condition and location, Nama advises that the investment required to bring the property to a habitable state and to the point that it could be sold, in the unlikely event that a willing buyer exists, would be such as to make the investment uneconomical and that it is questionable whether structurally such works could in fact be undertaken.”
Sinn Féin’s Dessie Ellis said the €150,000 costs were “unavoidable, but it is inevitable that there will be more demolitions by Nama across the country”.