The Government has approved plans to fund the repair of up to 100,000 defective apartments or duplexes at a cost of up to €2.5 billion to the State. So how will it all work and how does it differ from previous schemes like the one for mica-damaged homes?
What has been decided?
Cabinet on Wednesday approved the drafting of legislation to support the remediation of apartments that have fire safety, structural and water ingress problems. The full cost of repairs to between 62,500 and 100,000 properties is to be covered by the State. It was also agreed that homeowners who have already made repairs will in principle get the full cost reimbursed.
Why has it decided to do this?
Property owners have been campaigning for years for State support to fix their defective homes that were built predominantly during the Celtic Tiger era, when construction regulations were not enforced to the level that they should have been. An estimated 50 to 80 per cent of apartments and duplexes built between 1991 and 2013 are believed to be affected by one or more defect. Tackling the issue is a commitment in the Programme for Government and the scale of the problem meant that politically the Coalition had to act.
How much will all of this cost?
The Government says the scheme could potentially cost between €1.5 billion and €2.5 billion.
How will it work?
A so-called “whole building” approach will be taken, ensuring common areas and shared spaces are also remediated if required. It is envisaged that the Housing Agency will administer the scheme and that owners’ management companies will be funded to carry out the necessary works. People who have already had their properties repaired, or who’s homes are being remediated at present, will also be able to seek the full cost of the work as the support will be retrospective.
Will there be any cap on the funding offered for repairs?
Minister for Housing Darragh O’Brien said the average repair costs are estimated to be €25,000 per apartment, though in some instances it will be more and “there is no cap on this”. He said the details of the retrospective aspect of the scheme will be worked out as the legislation is drafted but that it is a “fully funded scheme”. He confirmed that this means property owners will get 100 per cent of the costs.
Wasn’t a cap put on a scheme for repairing or rebuilding mica-damaged homes in Donegal and elsewhere?
The Government has said it is covering 100 per cent of repair costs for mica-damaged homes up to a cap of €420,000 under the enhanced Defective Concrete Blocks Scheme. This will cover homes in counties Donegal, Mayo, Clare and Limerick. This limit has proved controversial with campaigners and Opposition politicians arguing that the cap means the Government will not be funding the full remediation costs for some homeowners.
Mr O’Brien said this cap is being assessed by the Society of Chartered Surveyors Ireland to take construction inflation into account. Asked why there is no cap in the plans for defective apartments, a Government source said the two schemes are not comparable as “entirely different” defects are being addressed in different kinds of structures and this requires “bespoke legislation”. The source also agreed that the much lower estimated per-unit cost of €25,000 for remediating defective apartments is a reason why there is no cap in the newly proposed scheme, a fraction of the cost of rebuilding a mica-damaged house.
When will the remediation scheme for apartments come into operation?
Mr O’Brien said the scheme should be up and running either late this year or early next year once the legislation and regulations are in place. There may be some interim payments made this year in cases where there are serious safety concerns that need to be urgently addressed which can’t wait for the legislation to be passed.
What do affected homeowners make of the proposals?
The Construction Defects Alliance welcomed the plans announced on Wednesday, saying it was particularly pleased at the decision to ensure that people who have paid or are paying towards remediation costs will be included in the scheme. It also welcomed the decision to provide immediate support on a series of interim fire-safety measures. However, the group’s spokesman Pat Montague added: “These decisions are significant, although the detail of how they will operate in practice has yet to be worked out.”