Builder offers €7m to compensate for structural defects

MORE THAN 700 families have been offered major house repairs and a share of total compensation of €7 million under proposals to sort out defects in the construction of their homes.

The householders on four estates in north Co Dublin will have their ground floors rebuilt and get up to €10,000 each as part of a deal offered by housing firm Menolly Homes.

In return, Menolly wants the homeowners to drop their legal action against the company over defects such as the swelling and cracking of walls and ceilings. These problems have been widely blamed on the presence of the mineral pyrite, which swells when it comes into contact with water.

Menolly, which said at least 85 per cent of the residents must agree to the deal for it to take effect, has given householders until Friday to accept or reject the offer.

The ultimatum has caused anger among the affected group of homeowners, who appear unlikely to meet the deadline for voting in the required numbers. Lawyers on their behalf have told their clients they are seeking clarification.

The repair work proposed by Menolly would take four to six weeks to complete for each house and would last up to 2½ years on some estates, according to the firm.

Last week, the company, which built the affected homes in Drynam, Beaupark and Myrtle estates, wrote to homeowners with details of the plan, which will also apply to houses on Beaupark estate built by Killoe Developments. Both companies are owned by builder Seamus Ross.

Menolly has blamed the problems in the houses on the presence of pyrite in infill material used in their construction. However, Irish Asphalt, part of the Lagan group of companies, which supplied the infill, blames faulty construction for the defects.

The dispute between the two companies has been before the Commercial Court for 150 days, making it one of the most expensive cases in Irish legal history. Last month, a settlement was reached through mediation and without admission of liability, but this requires the agreement of householders who have their own legal actions pending.

Both sides are due to report back to Mr Justice Paul Gilligan on progress in the settlement on December 21st.

In the letter, Menolly warned householders that if they did not agree to the plan by a substantial majority, litigation would start again in the Commercial Court and continue until mid-2012.

Homeowners would not be able to pursue their claims until this case was finished and liability determined.

It said the proposal represented “the very best outcome” both sides could offer and warned there was only a finite amount of financial resources available.

Under the plan, Menolly would carry out the remedial works, largely consisting of the removal of existing floors and infill and their replacement with new structures and insulation.

Householders would get up to €3,000 for new floor coverings, €3,000 for legal costs, €2,000 for alternative accommodation while the work was being carried out and €2,000 recompense for the inconvenience involved.

The money would come from an independent trust fund, which would also pay for other works on upper floors and common areas from a sinking fund.

Menolly said it and Killoe have carried out similar remedial works in 140 houses on the four estates.

Developments will be watched closely by the owners of hundreds of other properties, not built by Menolly, that have experienced pyrite-related problems.

Householders would get up to €3,000 for new floor coverings, €3,000 for legal costs,

€2,000 for alternative accommodation while the work was being carried out and €2,000 recompense for the inconvenience involved.