The latest edition of OPP has a piece on the Association of International Property Professionals (AIPP) which, it claims, has been the source of much criticism from within the overseas property industry.
The AIPP was set up in 2006 in answer to criticism that the industry wasn't regulated. Well the industry still isn't regulated effectively (organisations like the AIPP and FOPDAC are essentially self-regulating vehicles formed within the industry, neither has any statutory function and cannot, thus, take any other action against members except to fine or expel them). This isn't the fault of either organisation, government have simply not been accommodating enough to broach an issue which has been crying out for attention. The Irish government briefly flirted with launching the NPSRA but the legislation is currently floundering in a morass of red tape from which it may never emerge.
The criticism stems from the amount of negative publicity attracted both Bulgarian Dreams and Seven Continent Investment (7CI). The former was expelled from AIPP last year, and has been the subject of two BBC Watchdog programmes over the past weeks. The latter went into voluntary liquidation recently. The inference is that the vetting procedures in AIPP are not all that they may be. The AIPP response would lead you to believe that companies which may not be able to get into the organisiation, or which may have no desire to even try, are taking advantage of a situation which currently suits them, making the argument that non-statutory regulatory bodies are a waste of time and money.
Here is the article from OPP:
The Association of International Property Professionals (AIPP) has come under criticism from some sections of the overseas property industry after several media reports highlighting alleged improprieties of current and former members of the industry trade body.
Several agents have contacted OPP with concerns over the AIPP’s vetting of members, citing the investigation of former member Bulgarian Dreams by the BBC’s Watchdog programme and Worldwide Destinations, which has been the subject of several negative newspaper reports in recent months. Both of these companies have been expelled from the AIPP.
Following reports by property portals The Move Channel and Global Edge, the AIPP has also come under fire following allegations of improper conduct by investment agency Seven Continent Investment (7CI) which went into voluntary liquidation earlier this month. However, its director, Alistair Powell, who is on the board of the AIPP, told OPP that it had begun legal proceedings against at least one of the portals. “We are unable to respond and defend the allegations that have been published at present as we are following due legal process”, he said. “Once the standard liquidator's report has been finalised, 7CI and its directors will be happy to comment in full. The directors of 7CI view attempts to disrepute the company and its directors, either indirectly or directly, extremely seriously and appropriate legal action has been taken through its commercial litigators”. The AIPP said that it “never reveals details” on whether official complaints are made against a member and confirmed that 7CI are currently members of the trade body.
Nonetheless, negative coverage about AIPP members over recent weeks has drawn criticism from some in the industry.
Commenting on the reports regarding 7Ci, Heath Golding, MD of agency Asset Property Brokers, said: “The fact that Alistair Powell is, I believe, on the board of directors, makes us question the credibility of the AIPP. So for now we are still of the opinion that the AIPP is not a company which we fully acknowledge within this industry. If they were a government recognised body, things may well have been different.”
Stuart Law, chief executive of investment agency Assetz, added: “This is really an indictment of the vetting process of the AIPP,” he said. “Are they putting subscription monies before vetting potential companies? Are they close enough to the industry to hear about what is going on? We have heard things for months. We aren’t saying that the AIPP has failed, just that questions need to be asked.”
AIPP hits back
Addressing these concerns, Paul Owen, the AIPP’s chief executive, told OPP: "Alistair Powell is on the board due to the same mechanism as every other board member,” he said. “All people working for member companies are entitled to put themselves forward to sit on the board, members vote on this and the results are given at the Annual General Meeting (AGM).
“From a broader perspective, this is certainly not an indictment of the vetting process when evaluating potential members, but it is not perfect. If a company meets the criteria of AIPP then they are in. If they do not, they are out.”
Owen revealed that the trade body was “party to lots of information”, but was reliant on complaints to come in before it could take action against one of its members. “If we had a remit to act on every story we hear, we would need a staff of 20 people just to go through these; action requires proof. However, at present we are reactive rather than proactive in assessing what is going on in the market. Recently though, we received an anonymous email about one of our members and we felt the allegation was so serious that we put it directly to the member who refuted it.
“The AIPP is not perfect and has never claimed to be. What I find silly about some of the arguments out there is that you wouldn’t get rid of the police just because they didn’t stop every crime. There are a whole new set of challenges in the market and we are working out ways to deal with this. The British travel trade body ABTA was in existence since the 1950s, for example, but only made a name for itself in the 1970s when a lot of Brits had problems with tour operators collapsing. It is in these difficult times that the industry needs to highlight good practices and there is a real chance with the AIPP to build on this.”
The trade body’s chief executive recognised some of the complaints made against it, but asked those that were “standing on the outside and throwing stones” to work with the AIPP and not against it to help make the market a more transparent place. Owen also revealed that the board is examining a proposal to strengthen its escrow requirements for members and that the “rules might get tougher” as of its AGM on March 19th.