Apartment Owners' Network submission for a MUD Defects Remediation Scheme

Brendan Burgess

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The Apartment Owners' Network has made the attached submission to the Independent Working Group on Defective Homes.

I have remedied any defects in my own house at my own expense. I didn't ask the taxpayer to pay for them.

Brendan
 

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The Apartment Owners' Network has made the attached submission to the Independent Working Group on Defective Homes.

I have remedied any defects in my own house at my own expense. I didn't ask the taxpayer to pay for them.

Brendan
Many apartment owners have been left with the legacy of poor regulation and building standards. I am Director of a management company of an apartment complex in West Dublin. Significant issues highlighted in recent surveyors report regarding roofs, ventilation and fire safety . Most of these issues have significant health and safety implications. Owners may not be able to afford to remedy these issues in addition to paying high management fees. Are we going to wait for a Grenfell towers scenario when likely costs for government would be far higher than preventative work now?
 
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I have remedied any defects in my own house at my own expense. I didn't ask the taxpayer to pay for them.

Brendan
How foolish of you Brendan! This is the People's Democratic Republic of Ireland. The State is responsible for every bad thing that happens everyone and must immediately establish a no-fault, no-questions-asked, gold-plated, top of the range redress scheme to fully compensate them, and pay their lawyers too, even if it's not the state's fault at all. In recent weeks, we've actually extended this principle to cover cases where there was no actual harm but people were "at risk of harm" as exemplified by the South Kerry CAMHS fiasco.

In this socialist utopia, taxpayers will happily foot these unlimitable bills with a smile on their cheery little faces, while re-electing the clowns that continue to bribe Paul with Peter's money.

Many apartment owners have been left with the legacy of poor regulation and building standards.
Is the time honoured caveat emptor too harsh a principle?

Owners may not be able to afford to remedy these issues in addition to paying high management fees. Are we going to wait for a Grenfell towers scenario when likely costs for government would be far higher than preventative work now?
I'm not entirely without sympathy. But if the state (aka Brendan and I and every other taxpayer) is expected to pick up the tab, surely we're entitled to more than surly pyrite/mica style demands for our cash. How about an equity share in the property, proportional to the rectification cost, redeemable when it's sold? Or an interest free loan on similar terms? Or an insurance based scheme where ALL developments would pay into a fund which could then be drawn upon in the event of long-term problems emerging? Or a combination of some of the above? Surely that's a more moral solution than expecting a buckshee handout from your neighbours.

I see no reason why one set of citizens should be out of pocket to preserve the property interests of another set of citizens, free gratis without any reciprocation.
 
Is the time honoured caveat emptor too harsh a principle?
Apartment owners would have had the resources to have a surveyor produce a report for their own apartment but would have trusted the "professionals" who signed off on the common areas in the block.

The very simple solution is that the builders should pay and fix. But we all know that won't happen.


I agree that the original developers and builders should be responsible for resolving the issues but many of these were facilitated with large debt write offs though NAMA and are now up and running again with new companies. Owners are unable to seek redress for their shoddy workmanship.
 
But if the state (aka Brendan and I and every other taxpayer) is expected to pick up the tab,
Apartment owners are taxpayers too. Many bought an apartment because they did not have the resources to afford a house at the time. It is a dreadful situation to find themselves faced with large bills because of the incompetence of those who should have done their jobs properly.
 
A house or apartment is an asset only when you're selling it. Throughout the period that you own it, it is a liability that unless properly maintained will deteriorate and cause endless problems and further costs. This includes roofs, ventilation and fire safety issues.
 
Fire safety and standards are changing all the time for apartments. This is something, to a point, that is within the power of governments. In general homeowners don't get fire safety checks annually like the apartment dwellers. I'm still paying extra fees annually to make sure the Fire standards are adhered to in our building. They were built in the late 80s and conformed to FS at that time.
 
Apartment owners are taxpayers too. Many bought an apartment because they did not have the resources to afford a house at the time. It is a dreadful situation to find themselves faced with large bills because of the incompetence of those who should have done their jobs properly.
It is. But it's not my fault. Why should I pick up the tab? And if I did pick up the tab, should I not acquire an equity interest of some sort in the property? It's completely unreasonable to expect me to pay to enhance someone else's asset and see the benefit go entirely to that person.
 
I don't think we the taxpayers should pay for it. Just as the taxpayers shouldn't pay if I find dry rot in my house.

But the Multi Unit Developments are practically very difficult to fix. The state should maybe lend each apartment owner the €30k or whatever it is to fix the house but secure it on the property. And when the property is sold, repay the loan.

It should also be the same for the mica houses.

But if we are bailing out the mica houses in Donegal we should also bail out the apartments in Dublin.

Brendan
 
But the Multi Unit Developments are practically very difficult to fix. The state should maybe lend each apartment owner the €30k or whatever it is to fix the house but secure it on the property. And when the property is sold, repay the loan.
I don't understand why this approach isn't standard, including for the Mica schemes. Owner gets a portable, interest-free loan for life subject to a cap of maybe 50%. State recoups some of its outlay (eventually). Owner still has an incentive to maintain the property as there will be residual value for family members to inherit.

Is there some legal impediment to the state doing so? Or just bureaucratic inertia? It's a much better idea than free money.
 
The state should maybe lend each apartment owner the €30k or whatever it is to fix the house but secure it on the property. And when the property is sold, repay the loan.

It should also be the same for the mica houses.
I don't understand why this approach isn't standard, including for the Mica schemes. Owner gets a portable, interest-free loan for life subject to a cap of maybe 50%. State recoups some of its outlay (eventually). Owner still has an incentive to maintain the property as there will be residual value for family members to inherit.

Is there some legal impediment to the state doing so? Or just bureaucratic inertia? It's a much better idea than free money.
Agree 100%. In general, every bailout should require some quid-pro-quo from its beneficiaries.
 
Agree 100%. In general, every bailout should require some quid-pro-quo from its beneficiaries.
The Mica redress scheme is extraordinary in that you will have landlords with zero mortgage getting a better product than they already own for which they'll be able to charge a higher rent. For free, from the state!

I'm sympathetic to owner occupiers with mortgages but for the rest it is an absolutely extraordinary policy.
 
I think the big issue here is the fact that there have been no consequences for those who are responsible for supplying faulty materials and carrying out shoddy workmanship. Not alone was there no consequences but they were in fact rewarded by being given huge debt write offs. Meanwhile those who fell victim to these practises are, through no fault of their own, being presented with large bills for remediation.
It's completely unreasonable to expect me to pay to enhance someone else's asset and see the benefit go entirely to that person.
The remediation work will hopefully make these properties safe and liveable. Yes this is a "benefit" but it should also be a reasonable expectation for a buyer of any new property that has been built in the last 20 years.
 
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I think the big issue here is the fact that there have been no consequences for those who are responsible for supplying faulty materials and carrying out shoddy workmanship.

If they are still around, they will be sued.

The problem is that many of the builders went bust.

We do have bankruptcy and insolvency legislation to allow people get a fresh start. And that doesn't not having to pay bank loans. It means all their creditors, including consumers lose out.

Edit: Posts on NAMA have been move to this thread:

Brendan
 
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Meanwhile those who fell victim to these practises are, through no fault of their own, being presented with large bills for remediation.
That's the nature of property and caveat emptor, you have more consumer protection buying a toaster. However, it's still astonishing how little homework many prospective purchasers prior to committing massive amounts of money on property while signing contracts confirming they understand the risks.
 
However, it's still astonishing how little homework many prospective purchasers prior to committing massive amounts of money on property while signing contracts confirming they understand the risks.
How exactly would the median home-buyer assess, ex ante, the build quality of a new-build apartment?

I would have absolutely zero clue and even a surveyor hired would rely on a visual inspect of a near-finished product.
 
However, it's still astonishing how little homework many prospective purchasers prior to committing massive amounts of money on property while signing contracts confirming they understand the risks.
Buyers of an apartment would not be in a position themselves to conduct a hire a surveyor to conduct a buildings survey for the whole block. They would (foolishly in hindsight) have trusted the professionals whose job it was to ensure proper ventilation, fire safety and adequate roof structures to comply with government building regulations. They were badly let down by those who were paid handsomely for their "professional advice".
 
How exactly would the median home-buyer assess, ex ante, the build quality of a new-build apartment?

I would have absolutely zero clue and even a surveyor hired would rely on a visual inspect of a near-finished product.
Hire someone competent who knows what to look for and what questions to ask, and make sure appropriate indemnities were in place. There was plenty of chat at the time that corners were being cut in some developments, but in the scramble to get on the property ladder lots of people just didn't want to know.
 
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