Banks, insurance companies not releasing bonds for unfinished housing estates

Local authorities have power to pursue banks who have responsibility to pay, says Paudie Coffey

Minister of State Paudie Coffey said “strong progress” had been made with more than two-thirds of unfinished estates of the more than 3,000 registered by local authorities in 2011. Photograph: Dara Mac Donaill

Minister of State Paudie Coffey said “strong progress” had been made with more than two-thirds of unfinished estates of the more than 3,000 registered by local authorities in 2011. Photograph: Dara Mac Donaill

 

State-owned IBRC and insurance companies licensed by the State are refusing to honour bonds to allow the completion of unfinished estates where developers have gone bankrupt, the Dáil has heard.

“Even pillar banks, such as Bank of Ireland are dragging their heels over releasing bonds in cases where there is no developer and people are living in what are still building sites,” said Independent Denis Naughten (Roscommon-South Leitrim).

He described Co Roscommon as the “capital of the country when it comes to unfinished housing estates with four times the national average”.

Referring to the drawdown of bonds where a developer goes bust and an estate is incomplete, the former Fine Gael TD said that in a number of instances insurance companies were not releasing the bonds.

He hit out in particular at HCC International which he said was causing significant problems because it “will not engage with the local authorities”.

And “Bank of Ireland is very slow to engage, as is IBRC which has stated it will not deliver on the bonds in place for developments.”

The bonds were a condition of planning permission, Mr Naughten stressed and developers paid the fees.

But “now we find that some of the supposedly most reputable organisations in the country are washing their hands of it and letting people remain in these half-finished estates without releasing the money to get them completed”.

But Minister of State Paudie Coffey said “strong progress” had been made with more than two thirds of unfinished estates of the more than 3,000 registered by local authorities in 2011. Now there were fewer than 900 unfinished developments because of the Government’s special resolution funds and funds put in place by local authorities.

Local authorities “must engage with the credit institutions, banks and insurance firms that are providing those bonds. The local authorities have the power to pursue them and it is their responsibility to do so.”