Plans to tackle gazumping and gazundering delayed

Plans to give more legal protection to people buying and selling property on the Isle of Man have been delayed until after September's general election.

Members of the Legislative Council broadly supported the idea of passing a new law to tackle the practices of gazumping and gazundering.

Gary Clueit MLC was seeking permission to introduce a bill aimed at protecting homebuyers and sellers from financial losses when property transactions collapse after a price has been agreed.

He said "buying a home is the largest financial transaction most people will ever make yet offers some of the weakest consumer protections".

Gazumping is when someone makes a higher offer on a house you are in the process of buying, and the seller accepts that offer. Even if your offer is accepted, the seller can still accept another.

This sometimes happens when buyers are in a better position to complete their purchase, for example if they are cash buyers or are not in a property chain.

Gazundering is when a buyer withdraws their offer and makes a lower offer or other last-minute demands after their original offer is accepted.

Clueit explained that innocent buyers and sellers can lose thousands of pounds in survey fees, valuation and legal costs when transactions fall through.

Research shows that in the UK, these practices can cost the economy billions of pounds annually.

"There is no data to assess how big the problem is here, but our residents face the same risk," warned Clueit.

Although no member disputed that the problem exists, several questioned whether the Legislative Council was the right place to begin such a significant reform.

Kirstie Morphet MLC said they agreed the issue needed addressing but believed the government should develop the policy first.

Morphet questioned whether enough consultation had taken place and warned there were only "finite resources" available to draft new laws.

Rob Mercer MLC agreed with the objective but believed policy work should come before legislation, describing the proposal as "putting the cart before the horse".

The debate also highlighted how long the issue has remained unresolved.

Dawn Kinnish MLC noted that discussions about reforming the property transaction process date back to the early 1990s, with repeated reviews failing to produce legislation.

Clueit agreed that, despite decades of discussions, "nothing has happened.

'I have been inundated with emails and phone calls from people who had experienced financial losses after property transactions collapsed."

Closing the debate, several members said housing was likely to be a major issue in the forthcoming general election.

The Legislative Council unanimously agreed to adjourn the debate until its final sitting in November, allowing further consultation and discussion before deciding whether permission should be granted to introduce proposed legislation.

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