In recent months, due to a number of failed court action and because of widescale media attention the issue of gazumping has once again roused public interest. Gazumping is the practice whereby vendors of residential property who have agreed to sell that property and who have received a booking deposit from a potential purchaser, sell the property to another party at an increased price in the interim period before a formal contract has been signed.

The Home Purchasers Anti-Gazumping Bill, 1998 ('the Bill') seeks to restrict gazumping by requiring the vendor of residential property to deliver the following documents to the purchaser within 14 days of receiving a booking deposit:

1. A written contract for sale;

2. Copies of the title documents; and

3. Copies of the site map, plans and specifications (in the case of a new property).

The Bill restricts the vendor from entering into another agreement, written or otherwise, with any other property to sell the property in question within 14 days of the purchaser receiving the required documentation. The purchaser in turn has 14 days to return the contract duly signed. It is only upon the failure of the purchaser to sign the contract within this period that the vendor is free to reach an agreement with another party. Should the purchaser return the contract duly signed within the 14 day period, the vendor must return his part of the contract to the purchaser within a further seven days.

The Bill proposes to make gazumping a criminal offence punishable by a fine of up to £5,000.00 and, on a second conviction, to a maximum 12-month prison term. The Bill also provides that a court may award compensation to would-be purchasers.

The Bill is still at an early stage and we will be closely monitoring its progress in the coming months.

Meanwhile, the Irish Home Builders Association ('the IHBA'), the builders' representative group, appears ready to adopt a voluntary code of practice in this area. It is anticipated that the proposed code will contain a provision that the price of a house is to be set for a seven-week period from the date that the prospective purchasers hand over their booking deposit. Builders shall be required to issue formal contracts of sale within four weeks of receiving the booking deposit and if the buyer returns the contracts duly executed within a further three weeks, the builder will be obliged to sell at the price originally agreed.

In order to enforce the code, it is expected that a 'name and shame' policy will be adopted whereby the IHBA will publish the names of the builders who breach its provisions.

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