Property scandals - Who will end up footing the bill?

THERE is an impression of a collapsing deck of cards surrounding the discovery by various banks that they are vulnerable because of property deals involving members of the legal profession.

There is also a palpable air of amazement that it has taken over a decade of booming property prices, of insane levels of inflation in that sector, before a situation of this magnitude became public.

It was only a matter of time before a banker, a builder, an accountant or an auctioneer or some other person charged with marshalling the huge sums of money lubricating our love affair with acquisition was exposed on this grand scale.

Yesterday the country’s largest group of independent brokers called for an end to self regulation for accountants and solicitors within the insurance and investment sectors because of the affairs.

The “incidental business” rules allow up to 600 accountancy or solicitor firms to sell insurance and investment products without coming under the scrutiny of the financial regulator.

This flies in the face of government principles of better regulation, suggest the brokers.

No profession has a monopoly on virtue and you are as likely to meet a dodgy accountant as you are to meet a dodgy solicitor. However, the scale of this story and the sums at risk because of the actions of a few individuals suggest that we need to change the way this business is conducted.

There is the usual irony in all of this — the solicitors paid to clean up the mess created by one of their colleagues will be the real winners and the banks’ customers will pay the bill one way or another.

It is of little comfort to those wondering where their funds have gone but the old advice is still the best — buyer beware.