Spending on a €2.5 billion scheme to address safety defects in Celtic Tiger-era apartments could be capped, The Irish Times has learned.
The Department of Housing is working on legislation to put the scheme into effect. Ministers were told in recent weeks that while it will cover 100 per cent of eligible costs, this will be subject to upper limits.
The Cabinet was briefed last month on an exercise to map out costs being paid in retrospect for several “pathfinder” projects for works that have already been done. These projects are being used to help design the wider scheme.
It is not clear what upper limits could be set at, or whether they would be on a project level or an annual basis.
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In a statement, the department said “details of the parameters for both prospective and retrospective works will be contained in the draft Bill which is expected to be published by the summer”.
It is also uncertain whether any caps would apply to the budget for apartment defects already addressed in the past – usually funded by apartment owners – or those that have yet to be remediated, or to both.
Funding will be for retrospective works carried out to the standards in place at the time a building was originally constructed. Owners management companies – the bodies that run apartment blocks on behalf of owners – will have to show evidence of the work done and payments made.
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The retrospective element of the scheme is projected to cost up to €1 billion. The total cost has been estimated to between €1.56 billion and €2.5 billion.
A working group previously found that up to 100,000 apartments and duplexes built between 1991 and 2013 may have defects, including fire safety features, water ingress or structural problems.
Despite no liability being established for the State, the exchequer is facing a massive bill to address the problems as efforts to pursue the developers who built the developments have come up short.
Any limitation on payouts under the scheme would risk a backlash from apartment owners, reminiscent of criticisms made of the State’s defective concrete blocks scheme.
Sinn Féin housing spokesman Eoin Ó Broin said caps on the scheme would be “wholly unacceptable”.
“These homeowners have done nothing wrong. They are not responsible for the defects in their homes. They deserve 100 per cent redress, without any caps or caveats.”
[ Change to draft laws could speed up ‘life-saving’ works in defective apartmentsOpens in new window ]
The scope of the apartment remediation scheme has caused concerns for several years in the Department of Public Expenditure and the Department of Finance – including the issue of paying for work that had already been completed.
These issues were overruled at a political level when a decision to launch a scheme was taken in 2023, but it is understood that officials in the Department of Public Expenditure still harbour concerns.
These include the risk of creating a precedent in the case of other schemes where works already completed at the inception of a scheme are not covered – such as the defective concrete blocks scheme.
They also fear that when it comes to paying for works already completed, the costs could land on the exchequer in the short term, placing pressure on budgets for works to blocks that are not fixed, or for other areas such as social housing.
