There was a rash of instances in 1997 and 1998 where builders increased the price of houses between advertising them and finally selling them. Some of these were contested in the courts, but the judges found there was nothing in the law to stop it.
In October 1997, Wayne and Gemma Lake found the "perfect" house in a new estate in Tallaght. After viewing the show house, they bought a similar one "off the plans" for £129,000. They paid a booking deposit of £2,000 to the builder and went about organising the mortgage.
However, four months later they received a telephone call to say that the house was no longer for sale at that price. They would need to find another £36,000.
They had already made sacrifices to afford the original price, including the cancellation of their first holiday in three years, and knew they would be unable to meet the repayments on such an increased mortgage. They took the matter to court and the case was heard in May.
Mr Justice McCracken said he had "very considerable sympathy" for the couple but that the booking deposit was not a binding contract.
This was not the only case to come before the courts. In October 1997, another young couple sought to enforce what they thought was an agreement to buy a house in Kildare for £69,000. The builder later demanded a further £20,000.
Although their deposit of £1,000 was accepted, and the site foreman marked "sold" on the plans where their house was and issued them with a receipt, this did not constitute a binding contract, according to Judge Jacqueline Linnane at Naas Circuit Court. She too said she had "considerable sympathy" with the young couple.
An exception to this trend occurred in February 1998 when a Cork couple won their case, forcing a developer to sell them a house for the £185,000 originally agreed. However, in general, judges decided that, given the state of the law, they could not enforce verbal agreements on the basis of deposits "subject to contract". Such was the outcry that the Irish Home Builders Association announced it was adopting a voluntary code of practice which would penalise builders who increased the price of a house without justification.
The Director of Consumer Affairs was among those who called for changes in the law. Fine Gael TD Mr Brian Hayes tabled a private member's Bill on the issue, but it was rejected by the Government as legally defective. The Attorney General then asked the Law Reform Commission to examine the issue.