Repairing construction defects could cost State €2.8bn as over 100,000 homes found to be affected

Repairing homes affected by Celtic Tiger-era building defects could cost the State up to €2.8 billion with more than 100,000 properties across the State found to be impacted.

It is understood the working group established by Minister for Housing Darragh O’Brien to look at the defects issue has found that problems such as a lack of fire safety material, structural defects and water ingress are present in up to 80 per cent of apartments and duplexes built between 1991 and 2013, which equates to between 62,500 and 100,000 units.

The average cost of repairing a single unit is estimated at €27,500, although this can vary hugely depending on the nature of the defect. Some repairs were found to cost as little as €2,500, while others were in excess of €80,000.

Fire safety issues are found to be the most prevalent form of defect, affecting between 40 to 70 per cent of those homes, with water ingress present in between 20 to 50 per cent and structural safety defects the least common in about 5 to 25 per cent of homes.

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Building regulations

The problems have been found to be attributable to defective design, faulty workmanship or defective materials, putting the buildings in contravention of the building regulations at the time of construction.

It is understood the group, which was established in February 2021 and is due to conclude its work next week, has also considered the potential safety risks involved in complexes holding off on necessary work until they are certain they will be included in any future support scheme.

Campaigners previously raised concerns that many owners’ management companies (OMCs) — which manage the common areas in a multiunit development — are delaying the commencement of work for fear any State scheme would not be retrospective. It is understood the working group put forward the inclusion of relief for retrospective expenditure to mitigate this risk.

The group considered several options for funding the costs of the remediation works including low-cost, long-term loans, a levy on the construction industry, State-funded grants and tax relief for those affected.

It is understood the group has come up with three options for delivering this funding to people affected: through a low-cost loan to the OMC, which would then recoup the costs from the owners; from a State grant to the OMC to cover some or all of the cost involved; or though direct State intervention where the State pays directly for the work.

It is understood that while low-cost, long-term loans were originally seen as the best way forward, they have been found to be impractical, with some form of State grant or funding recognised as the preferable option.