Oireachtas Joint and Select Committees
Tuesday, 14 October 2025
Joint Oireachtas Committee on Housing, Local Government and Heritage
Multiple Unit Developments: Discussion
2:00 am
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Apologies have been received from Deputy Paula Butterly. Senator Chris Andrews will stand in for Senator Maria McCormack.
I take this opportunity to welcome transition year students from a number of schools in Longford who have been visiting the Oireachtas today to see what happens behind the scenes here. I welcome the students from Moyne Community School, Ardscoil Phadraig, Cnoc Mhuire in Granard, St. Mel's College in Longford, Meán Scoil Mhuire in Longford, Mercy Ballymahon and Lanesborough Community College. They are very welcome. I hope they got a good behind-the-scenes look at what goes on in the Oireachtas. The committee comprises members from all parties, including Government, Opposition and Independent. It is at meetings like this that thrash out the issues of the day. I hope the students enjoyed their day.
Members are advised of the constitutional requirement that they must be physically president within the confines of the Leinster House complex in order to participate in meetings.
Multiple-unit developments are developments of at least five residential units that share facilities, amenities and services and have an owners' management company, OMC. The Multi-Unit Developments Act 2011 regulates how the common areas of such developments are owned and managed. I am pleased that we have an opportunity today to consider this and other related matters with representatives from the Apartment Owners Network, the Multi-Unit Developments Act, MUD, Reform Group and the Construction Defects Alliance. I welcome: Mr. Pat Montague, co-ordinator of the MUD Reform Group and the Construction Defects Alliance; Mr. Sam Doran, chair of the OMC in Park West, Dublin 12 and the Not Our Fault campaign; and Mr. Brian Lambe, senior OMC manager with Clúid Housing and a member of the OMC board in Dublin's Clarion Quay.
Before we start, I wish to explain some limitations to parliamentary privilege and the practices of the Houses as regards references witnesses may make to one another in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to the Constitution and statute, by absolute privilege. Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in any such way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue your remarks and it is imperative that they comply with any such direction.
The opening statements have been circulated to members. Is it in order that we take them as read in order to maximise the time for members? We will publish the opening statements on our website. Is that agreed? Agreed. The speaking rota has been circulated to members. Deputy McGrath has six minutes.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank the Chair. I thank all of the witnesses from the various groups for coming before us. Judging by the Chair's introduction, they are all wearing a few hats. I thank them for submitting their opening statement, which outlines the key issues.
I will get straight to the point because time is tight. OMCs are the first key issue highlighted in the opening statement. Reference is made to the lack of registration, the lack of clear information on their number, the number in difficulty, the number facing financial difficulties and other issues. Will Mr. Montague elaborate what is in his opening statement in terms of the key issues that need to be addressed by Government in regard to OMCs?
Mr. Pat Montague:
Before getting into the issues affecting OMCs, another point pertinent to the work of this committee is the fact that responsibility for this issue is split between two Departments. While there is a commitment in the programme for Government and work has been ongoing to try to transfer responsibility for it issue from the Department of justice to the Department of housing, that has not yet been completed. On the basis of the Mulcreevy case, it seems as if primary legislation emanating from justice will be required to complete that. I make that point because before anything else can be done, that transfer has to be completed. Frankly, it has bedevilled this issue for quite some time.
Coming back to the Deputy's question, the first thing I would say about OMCs goes right to the heart of the matter, namely that they are somewhat problematic by their very nature. Under the Multi-Unit Developments Act, OMCs are charged with massive legal responsibilities for the health, safety and upkeep of premises. We must remember that the boards of directors of OMCs are overwhelmingly volunteers, that is, people who, with some exemptions, have no background in managing properties. They are, in effect, like people who become directors or join the committee of a local residents' association, but the comparison ends there in light of the huge responsibilities involved. That is one of the first issues. These companies comprise people with massive responsibilities who do not necessarily have the skill sets, experience, knowledge or training to deliver on those statutory responsibilities.
My next point relates to the issue of a register. Nobody knows how many OMCs there are in the State. We are talking about thousands. The issue is that while they are all on the company's register-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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I ask Mr. Montague to give an estimate because he has obviously done a lot of work on this.
Mr. Pat Montague:
I have seen one estimate of 13,000 but, to be frank, that is a shot in the dark. We do not have 13,000 apartment developments, as far as I am aware. To be clear, OMCs cover a lot more than multi-unit developments. In fact, increasingly new housing estates come under the ambit of OMCs. This is something that is becoming an even bigger issue.
To come back to the point on registration, regarding defects and communicating with boards of directors about the schemes that are coming on stream to help remediate defects, there is no direct way to communicate with those directors to let them know what is happening because the State does not have a register of those things. That is a massive gap from the point of view-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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I am sorry for interrupting.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I do not mind using my time for OMCs rather than hopping around to discuss defects and so on, particularly as the opening statement highlights that this is a significant matter. I appreciate that Mr. Montague has provided an estimate, but I understand that comes with a serious health warning in terms of accuracy because it is a guess, as such.
Mr. Montague mentioned volunteers. Of course, they do not have the required expertise to fulfil those roles in many cases. He also mentioned insolvency-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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-----and some OMCs teetering on the brink of insolvency. What is the scale of that problem?
Mr. Pat Montague:
It varies. Insolvency rears its head in arrears in service charges. One of the people involved in our group said recently that in his management company the arrears amounted, on an annual basis, to about 20% of what is billed out. The problem is that then accumulates year on year. That creates a massive debt issue. The flip side is that the people who are paying their service charge are not getting the services for which they have paid.
People who are in good order are not in a position to get the services they have paid for because of the shortfall in the moneys available for services.
The Deputy and I have spoken previously about sinking funds. A piece of research was published in the autumn of last year by the Society of Chartered Surveyors Ireland. I have included a link to it in the document. One of the significant problems in the Act is that section 19 stipulates the annual contribution should be something of the order of €200 or some other sum decided by the annual general meeting. As a result of that stipulation, most of the OMCs have underfunded their sinking funds hugely. According to the Society of Chartered Surveyors Ireland, the estimate is that they should have been bringing in somewhere between €1,500 and €2,000 per year. If one looks at that, one is looking at bringing in somewhere between one tenth or slightly more - possibly one eighth - of what actually should be funded. We are now reaching the stage where the age of these apartment developments means that they are going to need to change roofs, windows, lifts and so on and they simply do not have the funds for that. I have said to the Deputy previously that the shortfall there will make the cost of defects look like a teddy bears' picnic.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Defects regarding fire safety in apartment blocks constitute one issue but Mr. Montague believes the fact that insufficient provision is being made to sinking funds in these management companies across the country means that structural issues that will arise because of the age of these apartments will be a bigger issue.
Mr. Pat Montague:
It is a massive issue. It is like a train that is hurtling towards the station with no buffers in sight. Due to the shortfall in service charge budgets, what often happens is that the sinking fund is raided to make up for the shortfall so that services can be provided. Coming back to defects, the reimbursement process is so important because the funds were equally raided to do defects remediation works. This is why the reimbursement is so important so at least some of the provision that had been put by will be there.
Séamus McGrath (Cork South-Central, Fianna Fail)
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In many cases, the sinking fund, which is supposed to be there for structural issues and is a long-term fund, is being used for day-to-day expenses.
Séamus McGrath (Cork South-Central, Fianna Fail)
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That is a massive issue.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I must apologise as we have Housing Finance Agency legislation at 3.50 p.m. so some of us will have pop out to deal with that in the Chamber and then come back in. To provide some context, the original idea for this session when we agreed it before the summer recess was that in anticipation of the transfer of responsibility for the Property Services Regulatory Authority and the Multi-Unit Developments Act to the Department of Housing, Local Government and Heritage, we could kick-start the autumn with a serious discussion of those to try to influence the thinking of the Minister and the Department on these really important issues. It is very disappointing that the Property Services Regulatory Authority declined the invitation. Legal authority for that organisation has transferred to the Department and it would have been good to have it here. I also wish to express some frustration that responsibility for the Multi-Unit Developments Act has not been transferred across, which means that we will not have the Housing Agency or others here today. It is an important issue for this committee and we will be coming back to it along with the issue of defects.
I wish to put on record that this is not just a legacy issue. Obviously, there are legacy issues and we will talk about those. There is an increasing number of new multi-unit developments, a number of which have even more complicated challenges than their predecessors from the Celtic tiger era. In my constituency, we are finding brand new challenges around car parking designation, with some being public and others remaining within the owners' management company and disputes between residents and the owners' management company about that. We are finding significant challenges in terms of budgets. Most members of the public would be astonished to know that to get a budget through an AGM, only 25% of the votes are needed, which seems counterintuitive in terms of building consensus. We are also getting far more mixed-tenure developments, where there are cost-rental tenure, social housing tenure, private rental tenure and owner occupation. This is creating all sorts of additional challenges, which I want to name because this is the context we have here. We should write to the Minister for Justice, Home Affairs and Migration and urge him to bring forward that legislation to ensure that those powers can be transferred as a matter of urgency. That ultimately needs to be done.
Could Mr. Montague list in shorthand what key areas of reform of the Multi-Unit Developments Act the MUD Act Reform Group would like to see when it eventually comes to the Department of Housing, Heritage and Local Government and the Minister takes responsibility for it? I ask Mr. Lambe to list some of the day-to-day challenges of OMCs because Clúid is centrally involved in that. From an operational point of view, what type of things would a review of the Multi-Unit Developments Act need to see reformed but also in terms of regulation of OMCs and regulation and strengthening of the Property Services Regulatory Authority? I might not get to Mr. Doran in this round but I will get back to him. Not Our Fault is at the centre of the situation relating to the issuer of the interim fire safety fund. Could Mr. Doran give us an update on that? I want to spend some time on defects in the second half of the meeting. Could Mr. Doran give me his view of where the legislation is coming?
Mr. Pat Montague:
I reiterate the point about the importance of the transfer. We have been in suspended animation. I will give a very simple example of that and the impact it has. There is a commitment in Housing for All to regulate under sections 18 and 19 of the Act. Section 18 refers to service charges while section 19 refers to sinking funds. Those regulations were supposed to be issued this time three years ago. The regulations were drafted in February 2022 by the Housing Agency and have been sitting in suspended animation. There have been oodles of parliamentary questions on this. There has been ping-ponging between the two Departments. I will not get into the rights and wrongs of that because the impact of it is that the regulations, which are desperately needed, have not yet been put into effect. They were drafted three and a half years ago and are sitting in suspended animation somewhere in the ether between the two Departments. This is a practical example of the impact of that.
Coming back to what we would like to see, first and foremost is the register. There has to be provision for OMCs to register. There needs to be a central register. There is also a need for them to provide very important information relating to governance and finance, such as, for example, that their annual reports are presented to a regulatory body. I will come to that shortly.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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The way we structure these committees means that they do not lend themselves to the detail. I only have two and a half minutes so could-----
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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And then come back to some of the detail. I do want to get it on the record.
Mr. Brian Lambe:
Clúid has about 4,000 units that are connected to OMCs, so that is about 200 OMCs nationally. It is a mixed bag in terms of the challenges those OMCs face. Each one has its own little make-up in terms of the unit type, the stakeholders, etc. In terms of day-to-day challenges, the thing that continues to strike me is general awareness for members. My strong sense is that people buying apartments or houses within OMCs are not fully aware of the ramifications of that. From the outset, there is that knowledge gap when it comes to what purchasing this property means, the conditions in a lease, etc. If and when a regulator in place, I would be supportive of a wider awareness campaign because, as we know, there will be an increase in multi-unit developments and people going in with their eyes open will help with engagement as well. The Deputy mentioned AGMs and voting.
In Ireland, a big majority of apartment owners are investors or landlords, so there is straight away a minority of owner-occupiers. We have that knowledge gap. To the Deputy's point earlier, there is a real need to engage all member types, including pension trusts, investment trusts, approved housing bodes, AHBs, etc., because it is becoming more and more of a mixed bag. Education and awareness are one piece.
Mr. Montague touched on the whole role of volunteer directors. In Clúid, I take on directorships; I am skilled enough and have time to do that. However, the vast majority of others do not have training made available to them. They do not have the time. Much of the time, it is down to goodwill, so there is a lot that is needed for volunteer directors. For example, large projects such as remediating defects or, as in our case on Clarion Quay, fire remediation projects are big, expensive and complicated projects and they ultimately sit with the board of an OMC. That poses challenges and risks that are actually making it more onerous for people who might want to step up and play a more active role in their companies but are put off by the risks and rigours of company law, etc.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I think I am out of time. I will get to Mr. Doran in the next round, if that is okay. My apologies.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I have latitude if the Deputy wants to engage.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Mr. Doran might give us a brief update on what is happening with the funding drawdown for the interim fire safety scheme. That would be a good start.
Mr. Sam Doran:
As the Deputy knows, the fire safety fund all started two years ago. I have gone through three tenders. It has been two years of a battle and getting nowhere. I had a meeting yesterday with the Housing Agency. I think we have overcome the last difficulty, so we are close to it there. Basically, we were told that the code of practice would come out and everything would be hunky-dory. The code of practise is not fit for purpose. The interim scheme is not fit for purpose because this is emergency funding for people living in apartments with fire defects. People are living in danger. Our own development had three near fires. The fire brigade turned out seven fire appliances because we were on high alert because of the fire defects.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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So that committee members are clear, it is two years after this scheme opened and Mr. Doran still has not been able to draw down any money, nor have the other pathfinder projects in terms of remediation works.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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No remediation work has taken place as of yet.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Does Mr. Doran have an estimated start date for remediation in his own apartment block?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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This is for urgent or emergency fire safety works.
Mr. Sam Doran:
Yes. When you make the application first, the first part of phase 1 is to ask how many apartments there are in the development. At the end of the form, though, it says that you do not have to worry about this if you cannot answer and they can sort it out later. It is that simple starting. Then, however, it gets complicated very quickly. You need a tax certificate. CLGs do not have a tax certificate because they are non-profit organisations. However, they do not give you the information that you have to go back five years and register for corporation tax. That takes six to eight weeks, which is another two months gone. The whole process is flawed because it does not tell people to apply. It should be laid out that when you go for this, you need this and this. However, it is time-consuming and everybody is left in danger. We are lucky that there has not been a fatality with how it has gone thus far.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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For the benefit of the committee, could Mr. Doran tell us the number of apartments in his development?
Mr. Sam Doran:
In our apartment block, we have 232 apartments with roughly 1,000 people living there. It is seven floors high - 22 m high - which is high risk because once it goes over 18 m, it is a different level of danger. We went for the interim fire safety funding first. That was supposed to be emergency funding to be given out to people straight away. Darragh O'Brien was on "Prime Time" and said that nobody would be left waiting and that there would be emergency funding, but it has not happened. What is wrong is that the cladding on our building is timber cladding. It is from the bottom to the top, from one end to the other. This is nailed on to 2" by 1" lats. There is a 50 mm void and then there is a 12 mm sheet of plywood. There are 7,500 square meters of timber and nothing in between straight into the apartment. We had two near balcony fires. If one goes on fire, there should be fire stopping in behind that. There should be fire barriers horizontally and vertically. It totally does not comply. These people are left going to bed every night in total danger. Two years on, the situation has not moved. I am the pathfinder, so I am the first one, but the people behind have not a hope in hell until we redo this whole scheme.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I think I am out of time. I thank the Chair.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I will let other members in. I call Deputy Cooney.
Joe Cooney (Clare, Fine Gael)
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I thank the witnesses for coming in. I compliment them on the great work they are doing. I thank them for the submission. I see it makes the point that nearly a quarter of the OMCs do not own the common areas of the apartments. What can be done to rectify that? It is putting a serious setback on the OMCs, in fairness.
Mr. Pat Montague:
It is a huge problem. Coming back to the point Mr. Doran was making, it is having an immediate practical effect. There are four projects that are like pilot projects trying to work their way through the system in the interim remediation scheme. This is the emergency fire remediation stuff. It has been discovered that two of them have issues in relation to common areas. In one, it was clear earlier on, but that application cannot progress now until the OMC owns the common areas. The view, which I think is very much coming from the Department of public expenditure, is that the State cannot fund works if the OMC does not own the areas in which the works are going to be carried out. In another pathfinder, it has been discovered in the last month that while the OMC owns most of the common areas, it does not own all of the common areas, so its application has stopped.
The Housing Agency did an exercise that went through the over 200 apartment developments that had applied to the interim remediation scheme. Of them, about 23% - nearly a quarter - have said that they do not own the common areas or all the common areas. Basically, each company has to go to the person who does own the common area and get him or her to pass it on. In some cases, however, we are talking about the original builder-developer, who does not want to pass on ownership. That is a major roadblock. In one of the pathfinder pilot projects, the company that used to own, or has nominal ownership of, the common areas has been liquidated. We are then talking about having to go through the courts to sort out these issues. We are talking about time and money. Meanwhile, the applications for emergency fire safety works cannot progress because of this.
Joe Cooney (Clare, Fine Gael)
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Going forward, what needs to be done and what can be done to solve the problem? It is not good enough. People are limited in what funds they can draw down. As far as I can see, there is no one taking responsibility as regards carrying out maintenance work and whatever.
Mr. Pat Montague:
There would maybe be regular maintenance work being done, but even if that is the case, one of the issues is whether those carrying it out have a right to do so, given that the management company does not actually own those common areas.
One of the challenges here is that the model put forward for the remediation schemes is based upon granting money to owners' management companies to get people to do works on their behalf. The problem is that, if the owners' management companies do not own the common areas, which is nearly a quarter of them, it is a huge hole in the foundation stone of that model. I do not have an answer to that at the moment, but I would certainly say that we may need to look at how the scheme is being thought about because, frankly, it is unconscionable from my point of view that owners, who through no fault of their own, have been left with defective apartments, are being denied emergency fire safety works because the owners' management company does not own the common areas. That is putting bad upon bad. They have already been let down in the sense that the defects arose because of shoddy building work and ineffective monitoring and oversight by building control.
That is one set of wrongs. It is unconscionable, as I said, that they would be denied the opportunity to get fire safety works done so that they can remain safely in their homes simply because of this issue. A fix needs to be found. I do not know what it is yet but it is urgently needed.
Mr. Brian Lambe:
I will add to that in terms of the wider picture. Already by law, the common areas should be transferred from the developer to the OMC before the first unit is sold. In reality, that is not happening, and most likely that is cost driven. I am hopeful that if we have a better regulator in place, more structures and more repercussions for that, it will happen for any new scheme so that we avoid the very difficult circumstances that have happened.
Joe Cooney (Clare, Fine Gael)
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That is also important for the owners.
Joe Cooney (Clare, Fine Gael)
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The other thing is that the OMC is on the verge of insolvency.
Joe Cooney (Clare, Fine Gael)
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That is crazy in this day and age. Will Mr. Montague explain why that is happening?.
Mr. Pat Montague:
They are developing massive debt arrears because of a lot of non-payment of service charges. The reasons can vary. In some cases, the debt profile is quite low, while in others it is extraordinarily high. The anecdotal evidence is that absentee landlords, in particular, are much less likely to pay service charges, whereasowner-occupiers are much more likely to pay them because they are cheek by jowl. They are living with the impact of the lack of services. Only about a quarter of our apartment stock is owned by owner-occupiers. The rest is owned by institutional landlords, bigger landlords, private landlords and small landlords. Many of this last group are accidental landlords who bought apartments before the crash and in a sense were not able to sell them. They were their first homes and they had always intended to move on but were stuck with them. There are also approved housing bodies and local authorities. Owner-occupiers are very much the minority. Somewhere around a quarter of the cohort are owner-occupiers. This is a difficulty in terms of the profile. AHBs and local authorities are very good at paying the service charges, but there are still a significant number that do not pay. The only way you can get them to pay is by taking them to court, and there are plenty of instances where landlords have been taken to court and the judge says they will cut them a break. They end up having to pay only a portion of what they have owed, whereas owner-occupiers and other people have paid their service charges, so they are losing on the double.
Joe Cooney (Clare, Fine Gael)
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The figure relating to sinking funds, as Mr. Montague calls them, is €2.5 billion.
Mr. Pat Montague:
No, €2.5 billion is the estimated cost of apartment defects. What we are saying is that the sinking funds deficit that exists will make the size of that look like a teddy bears' picnic because the underfunding of sinking funds is way more than that. We are probably looking at it in the region of €10 billion for the overall deficits in sinking funds. That issue, to repeat what I have said, is like a careering train coming down the tracks without buffers at the end of it, because it is coming. Our Celtic tiger-era apartments were built 20 or 25 years ago and in the next few years will need new roofs, new lifts, new windows, new doors, fire doors - that sort of thing. If the sinking fund moneys are not there, they will start to deteriorate, as will the fabric of the building, particularly when it comes to roofs because that lets water in, leading to all of the issues associated with damp, undermining the fabric of the building.
Joe Cooney (Clare, Fine Gael)
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In that case, would it be better to demolish the building and build a new one?
Mr. Pat Montague:
From an environmental point of view and other points of view, that would probably not be the best solution. What it points to is the need to take this sector in hand. That is why, as I pointed out earlier, we need in the first instance to sort out the issue of jurisdiction here. The promise in the programme for Government, which I know people have been working on, needs to be finalised. The transfer needs to be finalised and we need to get the Housing Agency up and running next year, regulating the sector, putting proper standards in place and working towards solving these problems.
Rory Hearne (Dublin North-West, Social Democrats)
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What Mr. Montague has set out is really stark. I do not think it is really understood properly by the public and it is certainly not being talked about enough. The reality is that 100,000 people are living in homes that do not have an acceptable level of fire safety.
Rory Hearne (Dublin North-West, Social Democrats)
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Yes, Mr. Montague is saying the figure is up to 54,000 homes.
Rory Hearne (Dublin North-West, Social Democrats)
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That number are currently in unsafe living situations in terms of fire safety.
Mr. Pat Montague:
Yes, they are unsafe and Mr. Lambe and Mr. Doran will attest to their experiences with fires. The Deputy has made a very good point. I am concerned that there is almost a sense of complacency about this issue. It is almost as though because we have not had casualties yet, everything is okay. There are a number of examples and I have mentioned two, one of which Mr. Lambe can speak about in a minute, which is Clarion Quay. Another example is a building on the north side of Dublin city centre. For the residents on the top floor, the escape route is a wooden walkway on top of the apartments underneath. That wooden pathway is placed on, in some cases, the kitchens of the apartments underneath. In kitchens, there are stoves, ovens and electrical appliances and fires happen. The problem for the residents is that if a fire happens between their front door and the stairwell to escape, they are in big trouble. We have been aware of this issue and it is one of the pilot projects for the interim remediation scheme, thankfully, because we insisted that it be on that. That is an extraordinary level of vulnerability for the people on the top floor and it is not unique.
Rory Hearne (Dublin North-West, Social Democrats)
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What comes to mind to me is that it is like a Grenfell sitting there. Are we talking about a potential Grenfell in Ireland?
Mr. Pat Montague:
Let me put it this way: we might be if we do not act in a speedy manner. We have put this scheme in place and there are problems, but it is important to say that we made some minor progress in the last couple of weeks. There is a recognition that this scheme is not moving fast enough. We proposed it because we knew it was going to take probably ten to 15 years to sort out all the apartment defects. That was way too long to leave people living in unsafe homes. Three years ago, we proposed to the Minister that we would put an emergency scheme in place, the interim remediation scheme. Our view was that, over a three-year period, we would go through apartment complexes like a buzzsaw, putting in upgraded fire alarms, smoke alarms, lighting - all sorts of things to give people a higher degree of safety. Two years since the scheme was put in place, unfortunately, no grants have yet been issued. I would be hopeful that we might get two away before Christmas, but that is a long way from where we need to be. That is accepted now by the Department.
Rory Hearne (Dublin North-West, Social Democrats)
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Is Mr. Montague saying that some apartment blocks do not have proper smoke alarms?
Mr. Pat Montague:
Yes, some do not meet the current standards and some do not even meet the standards that applied when the complexes were built. To give an example, in one development in north County Dublin, they did the assessment for the emergency lighting and the fire alarms, because it is one of the pilot projects, and they found that both the lux levels for the lighting and the decibel levels for the fire alarms were both below what should have applied at the time the place was built, never mind the levels that would apply now. That is why they are going to be funded to have them replaced, but our view is that this needs to be much more widespread.
Those 50,000-odd apartments are in a similar vein. They have the issues that Mr. Doran's development and Clarion Quay have in terms of having flammable cladding on the outside. They are emergency issues. We are nearly two years into this and no grants have been issued. We need to really press on and get on with it. Mr. Lambe can talk about some of that because his development had a fire in 2023.
Mr. Brian Lambe:
I will give a quick overview. Clarion Quay is a big development of 188 units in Dublin 1, near the IFSC. In 2014, the OMC became aware of latent defects, mostly firestopping but also other issues. There was an awareness and a lot of effort on behalf of the volunteer board and members to try to seek recourse, avail of the support of the reform group and so on. Regrettably, we then had a fire in February 2023. It started off with a faulty phone charger in a bedroom. If there is sufficient firestopping in place, there should be at least an hour for people to be able to evacuate safely. That fire spread in minutes. One person was hospitalised. People were out of their homes for about two and a half years in that block, and they have only just moved back in. A lot was put on the volunteer board and the owners. Thankfully, there were no fatalities but it really pointed out the risks that are there. In answer to Deputy Hearne’s earlier comment, it is highly likely there is a risk to life.
Rory Hearne (Dublin North-West, Social Democrats)
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I cannot get my head around that. The State knows this situation is there and that there is a potential risk to life. We have seen Grenfell. There is a lack of pace. Even if they start now, it will be two or three years before it is actually done.
Mr. Pat Montague:
At the moment, based on the current application processes, it takes over 12 months to get from application to getting a grant, never mind getting work done. I know for sure that the Minister, the Housing Agency and officials in the Department accept that this is way too long. We will be meeting again on 21 October, this day next week, to try to see if we can short-circuit that. It absolutely needs to be short-circuited. Originally, we were talking about things being turned around in a matter of months. I know Mr. Doran's group went out to tender.
Mr. Sam Doran:
We went out to tender three times over two years. Three times I have been told that we would have the grant within seven days. Three times I organised the builder to start. When I went to draw down the grant the first time, I was told they did not realise that if we were getting more than 50% funding from the Government, we had to go on eTenders, so it was knocked back after doing a year of work. We got to that point. The building was built without fire doors in the halls because they are long halls, which means there is inadequate firestopping. As was said earlier, there should be a 60-minute fire break to get people out of the building.
The interim scheme was supposed to be for emergency fire alarms and emergency lighting in the corridors, so there would be 60 minutes to get people out of the building to ensure they were safe. The most important thing was the fire alarms for early warning. No money has been paid out. I know buildings that do not have fire alarms. In buildings like ours, half a fire alarm system was put in or, in other words, it was not put in where it should have been and it was all done wrong. People are living in total danger. I have been at this full-time for two years and have not got anywhere.
Rory Hearne (Dublin North-West, Social Democrats)
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The State should be intervening in some way, whether it is owned or not, to ensure people are safe. The most basic level is fire safety.
Mr. Brian Lambe:
In Clarion Quay, on the advice of our fire engineers due to the safety risk, given that even more safety defects became apparent on foot of that block 1 fire, we must have 24-hour fire warden cover throughout all 12 blocks of the development. That is leading to the insolvency of the company.
Mr. Pat Montague:
That would not be unique. For instance, one of the largest apartment developments that is known to have fire safety issues is Beacon South Quarter, which has 1,000 units. That is a matter of public record. It has had fire wardens for some time. It provides what is called the waking watch, which means that, during the night, there is somebody there to organise and help evacuate people, if something kicks off, but also to marshal the troops, so to speak. This is a widespread issue. The Deputy has seized upon one of the challenges we have faced. To be frank, it is only by the grace of God that we have not had serious injuries or fatalities. That is my perspective on this. It is only by the grace of God. We have a chance. We need to plough on, cut through the problems and deliver the fire safety remediation works quickly.
Rory Hearne (Dublin North-West, Social Democrats)
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I appreciate that the witnesses have put this across. It is imperative that this is done on an emergency basis. We cannot leave people in that situation.
Brian Stanley (Laois, Independent)
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The opening statement sets out the mess very clearly. In the last three quarters of an hour, the witnesses have articulated many of the problems. I am shocked to hear the details of Mr. Doran’s case. As a committee, perhaps we should communicate directly with the Minister for housing and local government about that case. The concern I have personally, as a member of the committee and a Member of the Dáil, is that we would walk out of here and, God forbid, something would happen in that building. I think Mr. Doran said it is eight storeys.
Brian Stanley (Laois, Independent)
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Mr. Doran outlined that the problems are on the outside of the building. It is a tinderbox.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I think it would be a good idea for us to do as Deputy Stanley suggests.
Brian Stanley (Laois, Independent)
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Yes, we could communicate directly. Normally, we do not do that but, in this case, it is a life-and-death issue. I know the witnesses are dealing with other cases but this particular case is serious.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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As a committee, I think we should go out and visit the building. It would send a strong message.
Mr. Pat Montague:
I think it would be very instructive to also visit Clarion Quay. We have video footage where the spread of the fire is minuted. It started on the fifth floor and went up to the sixth and seventh floors. You could actually see the spread within a matter of minutes. It spread from one apartment to another within ten minutes. It is supposed to be 60 minutes but within less than an hour, it had spread to the other two floors. It would be instructive to look at it. It is in the city centre, near the River Liffey. I think the committee members would learn a lot from visiting Clarion Quay.
Brian Stanley (Laois, Independent)
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When the Cathaoirleach was speaking, it came back to me that in my time as a councillor 20 years ago, I had a disagreement with the Department over the partitions between apartments. In one major development in my constituency, there is an apartment complex where the apartments are separated by plasterboard. I argued this with the Department. I am not a construction expert, although I worked in construction and know a little about it. The Department came back with all sorts of answers. I could not see how two plaster slabs could stop a fire quicker than a 6-inch or 9-inch block. The Department informed me that it was going to continue to allow this to happen. It should be clarified with the Department. Is it still accepting the separation of apartments with plaster slabs?
Mr. Pat Montague:
My understanding is that there has to be firestopping in the party walls between apartments. There have to be firestopping materials to stop the spread. They are also supposed to be under the floorboards, in the ceilings, in the external walls, in the walls between the apartments and in the common areas, including the corridors, but also, crucially, in the service shafts. All the service shafts are supposed to have caps at the top and bottom, and around piping and wiring, to stop the spread. That is the problem that is most common. I understand the committee brought the Minister on a tour to a development, and he was shown that you could literally look down the service shaft and see right down into the car park.
Brian Stanley (Laois, Independent)
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The interior barriers are a real problem. I do not want to rush or be abrupt. There is an issue that has come up a few times with me in terms of the management companies. Roughly 25% are owner occupied. Should the board be the volunteer members? I would like a quick answer.
Brian Stanley (Laois, Independent)
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It could be Clúid, or it could be a council representative on it.
Brian Stanley (Laois, Independent)
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My experience is that the private landlords tend not to put anybody.
Brian Stanley (Laois, Independent)
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Mr. Montague has also outlined that there is no training. He said in his opening statement that some of them are paying themselves. I think it is a good thing to have volunteers on the board. I do not think they should be paid. He outlined the financial challenges, and I can see it. As he is talking, I can picture apartment complexes that were built during the Celtic tiger that are now coming of age and the sinking fund is not there. Sinking fund is a bad name for it. A repair or renovation fund would be better, but that is the name on it. I can see this problem accumulating. There is also the sheer number of apartments involved. There are 100,000 from the Celtic tiger era alone, mainly affected by the fire safety issues. Only 12% have had their defects remediated.
Brian Stanley (Laois, Independent)
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That is accurate. That is a shocking level, and it is something we need to deal with urgently. The scheme was announced two years ago, but nothing has been drawn down as of yet. There is a piece of work for us to do on that. I have a question on the common areas. Are the windows counted? Is there a legal document? I know people who are living in them. I have a relative living in one of these complexes. Are the windows typically designated as part of a common area? The roof, hallways, stairs and lifts are.
Mr. Brian Lambe:
Typically, there is a head lease that would govern what the owners' management company is responsible for, and what is the responsibility of the lessee or the owner. In a lot of instances, the owners' management company has responsibility for the window frames to protect the fabric of the building and make sure of consistency and maybe the owner-occupier is responsible for the glass.
Brian Stanley (Laois, Independent)
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The witnesses also talked about regulations that have been drafted. They are with the Department of justice at the moment having been transferred over to the Department of local government. Is that correct? They said they are drafted three years, but we have not seen them.
Brian Stanley (Laois, Independent)
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Has Mr. Montague seen them?
Brian Stanley (Laois, Independent)
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Did the witnesses have an input into those?
Mr. Pat Montague:
We have never seen them and there have been loads of parliamentary questions looking for them and asking when they will be published. You generally get this because there was the split responsibility. The Department of justice had, and still has, legislative responsibility. Policy responsibility lies with the Department of housing. They were basically back and forth between each other.
Brian Stanley (Laois, Independent)
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That happens. If there is something caught between two Departments, you are banjaxed, and no one is responsible. That needs to be sorted and is obviously a priority.
Brian Stanley (Laois, Independent)
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They are with the Housing Agency. I am surprised that nobody from the sector has had an input. We will take it. We do not know what is in them. We need to see them and see if they are up to scratch. People like the MUD Act Reform Group, Clúid and the local authorities need to see them.
I have another question on the oversight and regulation role. There has to be some oversight and regulation role in the context of these huge settlements. Is there a role for local authorities? Sometimes things are handled locally. Typically, in a lot of counties, including where I live in County Laois, local authorities went in and bought four or five here, one or two there and ten there. Would local authorities be a good body to do the fire inspections? Would it mean additional staff? Would it be good for them to have a role as an oversight body in the context of implementation and oversight of regulations when we have them in place?
Brian Stanley (Laois, Independent)
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Ultimately, they have to find the person responsible.
Mr. Pat Montague:
-----in two parts. First, the programme for Government provides that there will be a regulatory unit set up in the Housing Agency to begin the process of regulating owners' management companies. The reason is that they already have expertise in-house in multi-unit developments, including somebody who was involved in the sector who is an apartment owner and has done a huge amount of work in a voluntary capacity and is now bringing that to bear in the Housing Agency. I certainly see a role for local authorities working in conjunction with the Housing Agency in the sense that it is important to have a national body co-ordinating all of the information, pulling it together and, more to the point, pulling together the learning from that. One of the reasons we are talking about, for instance, getting the annual financial accounts and why that is so important is to see the size of the hole in the sinking funds and to see how much is provided. I envisage a combined role between local authorities and the Housing Agency.
Brian Stanley (Laois, Independent)
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I turn to multi-tenure complexes, which a lot of them are, where the likes of Clúid or Respond are. There are 100 units and they have maybe 20, the private landlords have 50 and then there is a minority of owner-occupiers. In that case, what are the voting rights? If you go into an AGM and have 20 units, do you go in with 20 votes in your back pocket or do you go in with one? Technically, I think they should be going in with 20.
Mr. Brian Lambe:
The MUD Act did quite a bit to regularise that, so it is one vote per unit in the example given by the Deputy. That can cause issues and difficulties where people may feel their vote does not matter. A big part of the solution is to guide, support and engage owner-occupiers to become part of the board of that OMC in order that they can then see that institutions like AHBs are well intentioned and want the best for the whole community.
Aubrey McCarthy (Independent)
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I thank the witnesses for being here and for their statements. I am shocked by what has been mentioned. Deputy Hearne mentioned Grenfell and a witness said, "But for the grace of God." We were mentioning fire wardens. It sounds like a grave situation, and as was said, but for the grace of God nothing has happened. In my area of Kildare a number of years ago, six units of housing were destroyed in Newbridge in half an hour. There was meant to be an hour's fire rating between each one but it failed in minutes. Thankfully, as was said, but for the grace of God, there were no fatalities. However, it showed what happens when regulation and inspections break down. What shocked me about that scenario was that there is a huge insurance and accountability gap. The builders and professionals had insurance, professional indemnity cover, HomeBond and all that. Yet, somehow, when these types of defects appear everybody runs for cover and none of the insurance policies that were meant to be in place seem to protect anybody - neither the owners, the management companies nor the State. Then you and I end up paying for it as taxpayers.
Mr. Pat Montague:
The Senator has put his finger on something that is a massive problem and accountability is exactly the point. One thing that has been extraordinarily frustrating, and I have been working on this for nearly nine years, is that there has been no accountability. There have been no consequences for the people who built shoddily and there still are no consequences for people who build shoddily. That is a reality. How they operate is that they set up a separate company for each development.
That company holds just enough assets to complete that particular development, special purpose vehicle companies, which they then liquidate. To use the phrase: there is no mark for recovery.
Aubrey McCarthy (Independent)
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Usually, and I get that you set up a different company and do another gig, but it is the professionals who certify the work who are meant to be indemnified.
Mr. Pat Montague:
Where the issue came up, to be fair, was there was a significant flaw regarding the building regulations that apply between 1991 and early 2014. It was more a flaw in the oversight mechanisms within that and that is why they were changed in 2014, It is also why the scheme, in terms of defects, applies during the lifetime of those particular regulations. All that was required from a certification point of view was an inspection upon completion and that was a visual inspection. The reality is fire-stopping or the lack of it, is not amenable to a visual inspection upon completion. Why? Because it is behind wall panels, it is under floorboards or is in ceilings and external walls. The only way you can detect this, and this goes back to even putting together an application for grants, is you have to do opening-up works. You literally have to bore holes into walls, floors and ceilings to see if fire-stopping is there or not.
They have changed the regulatory framework so that it is now required for inspections during the construction process, whereas then there were not.
Aubrey McCarthy (Independent)
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That is my point. All those people were involved in the initial blueprints.
Mr. Pat Montague:
Yes, but often what happened in these cases, to be frank, was they were only involved in developing the plans and then the builder went off and built. They were then called back in at the end essentially to certify it was built according to the plans. They would go around to look and see "Oh yes, on the face of it, it appears to be built in accordance with the plans." The system was wrong; it did not allow for inspection during construction. That was the problem.
Aubrey McCarthy (Independent)
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Has the system changed? I know Mr. Montague said on paper-----
Aubrey McCarthy (Independent)
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Should we get local authorities and give them responsibilities for inspection?
Mr. Pat Montague:
Local authorities need more resources. Building control is still hugely under-resourced in terms of personnel to carry out this work. There is an attempt at national level, in what is called the National Building Control Office, and I know there is talk of putting this on a statutory basis. It operates out of Dublin City Council at present but, in my view, what you should be looking at doing is something akin to the Revenue Commissioners or the Health and Safety Authority where you have task forces that can go in and blitz an area. You put the fear of God in people that there is a real chance they might get caught and so need to up their game. The reality is there is a bit of a myth around that the people who built these things have all gone and are not around. That is simply not true. Most of the biggest builders, and I will not mention anybody, but most of the biggest builders in this State were involved in that shoddy building and they are still operating. They are still building, some of the most high-profile companies, and they have suffered no consequences. Not one of them has put their hands in their pockets to pay for the remediation. That will be coming out of the taxpayers' pocket, not those who created this mess in the first place.
Aubrey McCarthy (Independent)
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That is my whole point. If you do not change the way you build and certify, we are going to be spending billions now fixing the last disaster while waiting for the next one.
Mr. Pat Montague:
There has to be consequences. There are a number of things we need to look at. First, we need to look at lifting the veil of incorporation so that, for instance, in cases where directors of companies have tried to keep their assets off books, those assets can be reached. You can lift the veil of incorporation and get at those assets. Frankly, we need to look at cases where people who built shoddily should not be able to - and I know this is happening in the UK - tender for public works. In my view, it is totally wrong for people who pay no heed to the building regulations to simply trot around and be able to get contracts.
Likewise, we need to change the Statute of Limitations. At present, it is six years from when the defects become manifest, which is not when you discover them. In most cases, when the defects are discovered, the Statute of Limitations has long passed.
Aubrey McCarthy (Independent)
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Finally, are there any examples of successful indemnity claims?
Mr. Pat Montague:
None. Sorry, there have been on water ingress. Premier Guarantee has paid out and there may be other companies but all I will say is it has been challenging to get those things. Even when liability was accepted, it was extraordinarily difficult to get the money and hugely time-consuming. Once again the taxpayer-----
Mr. Sam Doran:
Sorry, on what the Senator asked regarding HomeBond and that, in our development we found the roof was corrugated and it was decided it was too noisy for the apartments so builders came along and drilled timber down and put felt onto it to reduce the noise but after that the water started coming down to where they drilled all the holes. We got a whole new roof, which was close to €900,000, and that was under the HomeBond because we were within the six years of the Statute of Limitations. We were lucky that was when we caught it.
Mr. Pat Montague:
They would be very much the exception rather than the rule. It has been, in the first instance, the owners themselves who have had to pony up money and obviously the Government agreed in January 2023 that the State would fully fund defects works. However, unless there is some price to pay for shoddy building, it is going to continue. That is my perspective on it.
Aubrey McCarthy (Independent)
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One of the witnesses mentioned the example of a charger. The fire warden will not see the charger going on fire in a bedroom so that is a whole disaster.
Mr. Sam Doran:
We had three near misses. We had a guy having a smoke out on the balcony late at night and he flicked the cigarette out and the wind blew it back in two floors below, which had artificial grass that caught fire. Luckily, the woman was home and she put it out with a basin of water. We had another one a couple of months later with the same thing again. A guy was smoking up on a balcony, threw out his cigarette and there was a plastic box on the balcony with toys and a kid's colouring book which caught fire. Luckily, again, there was somebody there.
The last one we had was a fella having a smoke - a taxi driver - before he went to work. In the car park, he threw the cigarette down a storm drain where there were loose papers in it which went on fire, the smoke came back through the pipe and up through the whole building. The neighbours rang in and said "Look, we have a fire in the building, we can see smoke." The fire brigade turned out seven fire units, a rescue unit, two ambulances and a fire officer because they knew of the defects in the building.
The last one we had was a guy who filled his car, a diesel car, with petrol and when he came home it was sputtering. What did he do? He emptied it all down the storm drain, which ran right into the plant room. I got a call on the Sunday to say there was a smell of gas in the building and I said, "you don't have gas in the building, I'm on my way over." When I went over, I traced it back and I was there until 10.30 p.m. that night, hosing out the drains. If he had come along and had another smoke, the whole building would have been gone.
We are living in constant danger of this and nothing is happening.
Thomas Gould (Cork North-Central, Sinn Fein)
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This is shocking stuff. Let us be honest about it: this is unbelievable. That is the only way to describe it. There are at least 100,000 people, according to the witnesses' figures, who are at risk right now; more than 50,000 homes and there seems to be no urgency from the Government or the Minister to put a solution in place. The witnesses are coming forward with solutions and all they are looking for are funding and grants to help deliver the safety measures, as they have outlined. They are not looking for, in some cases, a whole refit for safety, they just want to increase the level of safety to reduce the risk in the short term. To me, this is not doing the job the way it should be done but at least they are trying to protect people. It is unbelievable.
The Minister needs to come in here and stand over why he and the Department are not taking action. I take the points made by the witnesses. If there is a tragedy, fingers will be pointed left, right and centre. We need accountability now. We know there is a problem and it needs to be fixed now. A plan must be put in place to deal with the fire and safety defects. They will not be fixed overnight but a plan must be put in place that is supported with funding and other supports to remediate the risk. The evidence the witnesses have given today is very serious. It is very important that they are here today to outline the risks for so many people.
This question is for Clúid. How does the maintenance of an apartment block compare to the maintenance of housing units? Is it more costly? How does maintenance work for cost rental? I am my party's spokesman on local government. We see insufficient maintenance being done on social housing. My worry is that we will have a big problem down the line with AHBs and cost rental if the funding plan is not laid out now for the future.
Mr. Pat Montague:
If I can just come back to what Deputy Gould was saying on funding, to be frank, the issue is not funding, because last week's announcement put just short of €300 million in place for defects remediation next year. We were looking for in the region of €250 million. To be clear, that is also for Donegal and the defective concrete blocks. The schemes are demand led. More than €100 million was put aside for 2025 but we are not able to draw it down. The issue is not about the allocation of funding. Rather, the application process and the administration of the schemes are so bureaucratic, difficult and time consuming that it takes more than 12 months to get from an application – this is with a fair wind behind you – to a grant. It is way too slow.
Thomas Gould (Cork North-Central, Sinn Fein)
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Where does the buck stop? I want a straight answer. I know I am putting Mr. Montague on the spot.
Thomas Gould (Cork North-Central, Sinn Fein)
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The buck stops with the Minister and the Department.
Thomas Gould (Cork North-Central, Sinn Fein)
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We are saying funding is not an issue but it is if you do not get it.
Thomas Gould (Cork North-Central, Sinn Fein)
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We can have all the pie in the sky in the world from the Government and the Minister can make announcements but if the money does not filter down to make these properties safe and there is a tragedy afterwards, will the Minister be in here or on the floor of the Dáil saying it was red tape and bureaucracy? No, the buck stops with the Minister. That is Ministers' job.
Mr. Sam Doran:
I spent two years trying to navigate through this. Every time I thought I was there, there was more paperwork. We cannot go back to that. The big problem is that there is a scheme, but it is like being in the queue with six pints on a Saturday night and you know you are simply not getting out of it. The scheme needs to be simplified. The scheme that has been put together does not work. We need to start with a new code of practice.
Thomas Gould (Cork North-Central, Sinn Fein)
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The question is if it was designed that way. Was it designed not to work?
Mr. Pat Montague:
Before Mr. Lambe comes in, to be fair, what has happened is that we hit a major buffer. Mr. Doran referred to it earlier, which is the issue of public procurement. That has massively increased the time involved, but that is only one of the problems. It has certainly added a huge amount of time on one end of the process. To be fair, the Housing Agency has come forward with some proposals to help on the first part.
The other part is that owners' management companies, given the profile we have talked about – they are volunteers – do not have the wherewithal to manage these huge construction projects. They do not have the professional skills, experience and insight to do that. To be fair, the Housing Agency has recognised that these companies need additional support to help them move these projects along. That is something we are now discussing. We will discuss it next Tuesday. As it stands, the analogy we use is that what we envisaged was something like a fast-moving dinghy that would just get in and out and move around very quickly, but we have ended up with an oil tanker that takes weeks to just change course. It is not working. It is not fit for purpose.
Thomas Gould (Cork North-Central, Sinn Fein)
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Or even worse, it could be the Titanic.
Thomas Gould (Cork North-Central, Sinn Fein)
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That is not to be flippant about it. Could Mr. Lambe speak about maintenance?
Mr. Brian Lambe:
Speaking to the Deputy's more general questions about maintaining an apartment versus a house, it is night and day. When you get into the complexity of homes stacked on top of one another, you are looking at all kinds of very technical components – pumps, lifts, windows, roofs, etc. That is becoming even more complicated in some ways, which is a good thing, as developments bring in new technology.
In response to the Deputy's second question on appropriate funding for social housing, our experience in Clúid is that the funding is available for AHBs once we get the feasibility and costings right. The gap Mr. Montague points to is better regulation. I would really welcome a regulator that would mandate an OMC to get a long-term asset management plan, and to have sufficient reserves to pay for it in order to stop the rot of where we are at today with not enough funds, regulation or drive to be able to address the issues relating to sinking funds.
Thomas Gould (Cork North-Central, Sinn Fein)
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I am sorry but I will have to go into the Chamber soon. We have discussed sinking funds. How big is the black hole and how is it going to be solved?
Mr. Pat Montague:
That is a very good question. We were only discussing this yesterday. One of the things at the moment is that owners' management companies are not in a position to borrow. That could be something to explore. However, the sting in the tail is that there is no point in borrowing if you cannot pay it back. This comes back to the issue of them being able to get owners to pay their share. The problem is that there are way too many owners not paying their fair share. I will give an example. My parents live in an apartment development near me in Drumcondra on Dublin's northside. They are both pensioners. They pay their service charge. I do not know what the profile is in terms of other people in the development but there is no doubt that they are paying their charge and doing their bit. If other people are not and are freeloading, then what tends to happen is that if they have a debt that has to be paid to the bank, the people who are paying are going to end up paying more.
This comes back to the issue of sorting out non-payment. At the moment, the only way around that is through the Circuit Court and even then it takes time, is costly and is not guaranteed a result. One of the things we have in mind is looking at the dispute resolution mechanisms that the Residential Tenancies Board has to try to address such issues. Arrears are a big problem. We could look at loans as a short-term measure but ultimately they would only work if OMCs had the ability to get everybody to pay. That is a problem.
Thomas Gould (Cork North-Central, Sinn Fein)
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I want to respond to a point Mr. Montague made earlier about bad developers or unscrupulous builders who did not meet the fire safety requirements for more than 50,000 apartments. There is no accountability or responsibility.
Thomas Gould (Cork North-Central, Sinn Fein)
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Have the witnesses approached the Minister and said we need new legislation? These people are going on to the next development and the one after that and the same directors are getting off scot-free. The State is then left to foot the bill. What is worse, people living in those buildings are at risk.
Mr. Pat Montague:
We did propose to Members of a previous Oireachtas that the Planning and Development Bill would include a provision to the effect that if somebody had a track record of defective development, it would be an issue that could be taken into consideration by a local authority when considering an application from that builder. There are other issues.
We were told that there is no connection whatsoever between building regulations and planning, which is ludicrous. We must remember that the company applying for planning permission is not the company that built. While the directors might be the same, they are different legal entities. This also comes up. They are able to cover themselves and, I am afraid, they have done so.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I must move on to Senator Murphy.
Thomas Gould (Cork North-Central, Sinn Fein)
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I appreciate that. I have to run into the Chamber.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I have given a bit of latitude. We have a bit of time to spare, which is why I am allowing members to go over their time limits. Some members are not coming to the meeting. I call Senator Murphy.
PJ Murphy (Fine Gael)
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I thank the witnesses for their evidence, which has been most informative. Before coming to my job in the Seanad, I worked as a carpenter for 20 years. I worked with countless management companies around the country. Again and again, the companies had exactly the problem the witnesses have highlighted, that is, the non-payment of contribution. Mr. Montague said the rate of non-payment is approximately 20%. I thought it would have been higher, in my experience.
Mr. Sam Doran:
I will add something on finances within the management companies. We have 232 apartments. Our budget is €715,000 per year. Six weeks ago, we were looking at €300,000 in debt. We went after it. We went legal and got €125,000. We have €175,000 in debt, some of which will be carried from last year and things like that. That is a lot of debt on a small budget. The problem we find is that the debt is coming from landlords.
PJ Murphy (Fine Gael)
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That is exactly the point I want to get to.
Mr. Sam Doran:
There are two points in that regard that could provide a quick fix. Most landlords are getting HAP payments. They just have to provide a tax certificate for the HAP payment. They should have to give in a certificate from the OMC to show they have paid their fees. They must register their tenancies with the PRTB each year. When they do so, they should have to give a clearance certificate or go without the rent.
PJ Murphy (Fine Gael)
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That is the sort of idea I am looking for in answer to my question. Will there be a role for the housing regulator? I am not sure if a mediation system would work here. It might be beyond mediation. We would need some means for the management company to reach out to the housing regulator to say it has a problem with collection but does not have a legal standing as an organisation to be able to follow up in any way other than with the courts and to ask if the housing regulator could step in and be of assistance.
The witnesses mentioned windows and roofs. Particularly in Dublin, but also in Galway and to a small extent in Limerick and Cork, I have seen examples where the penthouse apartment on the top floor of a building might have a very large balcony or roof garden area that has been found, in many cases, to be defective. They are leaking and causing massive damage to the apartments directly below. However, the landlord who owns that top floor is getting big rent for his or her penthouse apartment and does not want to inconvenience the tenant by moving them out. Therefore, he or she is not co-operating with the remediation works that need to be done in order to solve the problem. Do we have a simple legal means by which the management company can oblige the property owner on the top floor to facilitate the essential works on his roof garden or balcony that need to be done for the apartment directly below? I have countless first-hand experiences of the issue. As the penthouse is obviously the highest-rent apartment in the block, the owners simply continue to stall and give reasons not to co-operate while ceilings are collapsing below.
Mr. Brian Lambe:
Both questions point to where a regulator would be greatly supportive. On the rent piece, we were proposing an annual return from OMCs to a regulator so there would be a level of push for financial governance to be in place. To the Senator's suggestion, if there were difficulties or struggles getting certain members to pay, there could be dispute resolution or independent advice, etc. The same would apply with roofs or penthouses, or those kinds of nuanced examples. Right now, the only recourse is via a hefty legal route, involving legal letters, courts, etc., sometimes to little or no outcome. Perhaps having a regulator in place to mandate, guide and support would be a solution.
Mr. Pat Montague:
I know that roof issue has arisen with one of the pathfinder projects under the interim remediation scheme. It was the one I mentioned with the wooden walkway on the top of the building. In that case, the owners' management company is having to put a plan in place to decant. The people on the top two floors will be moved into alternative accommodation, which will be paid for by the scheme. There is already precedent for that in cases of pyrite, for example, when people have to move out. The only thing I would say is around the amounts of money we are talking about in respect of pyrite. That issue arose first in 2012. In light of the amounts of money now required to get accommodation, particularly in some of the bigger cities, the situation would have to be reviewed. However, coming back to the point, that might be a way for the people concerned to avoid being at a loss, so to speak. Perhaps the scheme could pick up the tab for people having to move out so that remediation works can be done. That is what is envisaged.
The Senator is right. People do not co-operate with getting remediation works done. That presents problems. As the Senator has talked about, it depends on the nature of the head lease and what is in it. In many cases, the OMC would be able to force a solution. Let us be clear that you may end up going to court and that becomes really expensive.
PJ Murphy (Fine Gael)
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There is massive reluctance among management companies to go to court because of the expense and time and everything else involved.
PJ Murphy (Fine Gael)
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There is also the issue of the relationship within the complex.
PJ Murphy (Fine Gael)
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Neighbours go to court against neighbours. That can lead to long-term relationship problems between neighbours.
Mr. Pat Montague:
It leads to horrendous issues. People within apartment complexes have fallen out massively because of these sorts of issues. These are people who were good neighbours. On many of the developments where levies were imposed before the Government said it would put a remediation scheme in place, there were always people who, frankly, did not have the money to pay a levy. They felt strong-armed, harassed and whatever else. That led to bad relationships.
PJ Murphy (Fine Gael)
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Where are we now on the development of the guidelines for the new housing regulator? How developed is that process?
Mr. Pat Montague:
It is nowhere. The reason it is nowhere, to bring us back to one of the first things I said to Deputies Ó Broin and McGrath, relates to the transfer of responsibility from the Department of justice to the Department of housing. I tried to have a conversation with one of the senior officials in the Department of housing two weeks ago about moving this along because it is in the programme for Government. I was told that the official could not discuss it because the Department does not have jurisdiction and they cannot engage until they get jurisdiction and the issue is sorted. Representatives of the PSRA and the Housing Agency are not here today because jurisdiction has not transferred. They simply cannot and will not engage in discussion until that issue is sorted. Going back to basics, that must be sorted and quickly.
PJ Murphy (Fine Gael)
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Mr. Montague has been very clear in his answers. I thank him.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I thank the witnesses for being here. I have met them on a number of occasions and I thank them for the work they have done. Will Mr. Montague tell me how much public money will be dispensed under the apartment defects scheme?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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That is in total. I ask for a ballpark figure.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Would it be fair to say that OMCs will be the primary beneficiaries of the bulk of that money?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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The payments will be made primarily through the OMCs.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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They will be one of the principal distribution mechanisms for something north of €2.5 billion.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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We essentially have legal entities that will be distributing billions of euro in public money.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Yet, there is a list of concerns - if I can put it as mildly as that - that many people have about OMCs around conflicts of interests, previous developers being on boards and poor corporate governance on OMCs. I am not saying that about any of the OMCs represented here. We know, however, that because many of the OMC structures are based on volunteers and company directors who come and go, the need for a regulator is acute.
Mr. Pat Montague:
Even where OMCs have people with a lot of experience - I am talking about construction experience - trying to guide some of these works, there have been massive inconsistencies in how defects works have been done. This has not been out of malice or badness. It shows the need for guidance, direction and support, which are not there at present.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I am a member of the public accounts committee. I could easily see a hearing being filled with a discussion on €2.5 billion being distributed through companies that are not formally regulated or do not have a proper overall regulatory structure.
Mr. Pat Montague:
Let me give the Deputy two cases in point. I am aware, and I know Mr. Doran is aware, of an OMC in Dublin where a chair who used own units but no longer does was getting a daily stipend, had an office paid for and provided by the owners' management company and was running general meetings like a personal fiefdom. The meetings were online and if somebody tried to get in to contradict him or propose something, he would cut them off. I am aware of another case, also in Dublin but on the west side, where two directors were paying themselves - this is going back a number of years - €80,000 and €90,000, respectively, and they were also then awarding contracts to people who were close personal contacts. To be clear, the majority of OMCs, in my experience, are honourably run but the fact that the system is open to that, and we are talking about billions of euro going into it, means there is a risk from a public finances point of view.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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It is a significant risk.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Mr. Lambe has jumped ahead of me. It is difficult to see any other situation where such significant amounts of money would be distributed, albeit with protections, and I accept there will be protections in the apartment defects systems, to a sector where serious reforms are required. I would be saying to the Department of justice that if it leaves this on its desk for too long, we will be putting the blame on its desk when things go wrong. There is cross-party consensus, and certainly consensus on the backbenches of Fianna Fáil, that it should be moved to the Department of housing because there is an appetite in that Department, for all the reasons we have just described, to deliver some of these reforms. Given that I have two party colleagues leading those Departments, I will do everything in my power to try to persuade both of them to make sure the bureaucracy and red tape do not get in the way here. Aside from the public spending element, which I have put to the witnesses, at the heart of all of this are people and where they live.
I recently had a serious meeting with residents who are in a management company in which the basics of how an OMC should be run were not operating. There was not even a basic level of knowledge among the people living there. In many ways, that was no fault of their own. The only way for them to effectively succeed would be to do a corporate takeover of the OMC. That could lead to all of the issues we spoke about around differences with neighbours and so on.
I am particularly conscious of OMCs that are made up of apartment and non-apartment developments. That is one area of real conflict that I can see. In essence, many apartment-based OMCs use fees gathered from non-apartment elements to fund the overall development. I appreciate that is difficult to unravel. It is not an easy thing to say but when people sign a contract when they buy a house, they are then bound by the OMC. People can be effectively locked into a tyranny of the majority, however, and there can be unfairness in that.
Mr. Pat Montague:
That is why, coming back to the review of the Act, I would see that review as the third phase. The first phase is the transfer of responsibility. The second is setting up the regulatory unit in the Housing Agency. Being armed with all of the information that would flow from good regulation would then inform an effective review of the Act.
One of the points the Deputy raised was very well made. At an event we had in Buswells Hotel in April or May last year, which Deputy McAuliffe attended, Mr. Mooney made the point that, leaving aside the growth in multi-unit developments, the number of OMCs is rising dramatically because a lot of new housing developments are now going to be governed by owners' management companies. This is becoming an ever more present issue, rather than an historical one.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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If we make the comparison with the charity sector, proper regulation was not put in place in some charities and it resulted, to our detriment, in genuine organisations being mired in all sorts of difficulties. The quicker we move on this, the better.
I am taken by Mr. Lambe's suggestion that in order for people to get significant amounts of money through the apartment defects scheme, they should be registered and regulated. The onus is then on the Government to have that established before the distribution of funds is made.
Mr. Pat Montague:
That is something we have suggested in informal discussions with some of the stakeholders involved. They cannot formally discuss this because a transfer of responsibility has not been executed. We have made that point. It seems blindingly obvious.
Already, 214 owners' management companies, at the last count, have applied to the interim remediation scheme. It seems to me that they should, as a matter of course, have annual reports and annual financial returns and all the details of their directors. They should be registered as well. In a sense, that is an easy way to begin to do that. At present, my understanding of how that works is that every month when the Companies Registration Office publishes its new list of company registrations, people in the Housing Agency are literally sifting through that list to identify which of them are management companies. It is not immediately obvious. Then they write to the companies and the level of return to sender post from those companies is extraordinarily high. That means that even the addresses given for the companies are not correct.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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That is on extraordinary situation.
On the issue of the assignment from one Department to another, I suggest, obviously pending a report from this meeting, that we write to the Department seeking that this be expedited.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank the Deputy. I showed him some latitude because we have time.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I apologise. We have the Housing Finance Agency (Amendment) Bill 2025 before the Dáil, so we are trying to be in two places at once. At the beginning of the meeting, I recommended that the committee would write to the Minister for justice to do exactly as Deputy McAuliffe said to expedite the enabling legislation. It needs be done as a matter of urgency. For fear of asking questions that the witnesses have already addressed, I am going to move the debate on just slightly. I will read through the transcript of what I have missed.
A point I mentioned at the start is that we are beginning to see a new set of challenges in a lot of the new multi-unit developments. Thankfully, we are not seeing any evidence of defects. To be fair to Dublin City Council, it inspects 100% of all multi-unit developments as a self-imposed obligation, not as a requirement. If all the Dublin local authorities did the same, we would be in a much better position. However, there are challenges in multi-unit developments. The Cathaoirleach will know about this in Cork as well. For example, typically speaking in the Celtic tiger era when the estate was taken in charge all the car parking that was in the street was public car parking. We are now getting hybrid estates where because of the grant of planning permission portions of car parking spaces have allocated to the owners' management company, OMC, and portions will be public. Under the Multi-Unit Developments Act 2011, any changes to car parking policy do not have to be presented to an AGM for approval of the members. It is an operational decision of the directors and the managing agent. We are starting to see significant conflicts where policies have been changed. This affects the approved housing body sector. There is problem in Citywest. It is affecting two developments in my constituency. There is one provision in the Act that we need to clarify. This is what types of decisions should require a decision of an owners' management company AGM or EGM. It should not just be the budget. Any significant change into the operation of any the functions of the OMC should require a level of consent.
Likewise, I mentioned at the start that the threshold for the passing of an OMC budget is 25%. This is something I have only learned recently. To block a budget, there has to be 76% of the votes. I appreciate that getting the budgets through is tricky. I understand, particularly for folks who are on OMCs, and I know Mr. Lambe is a director of some, but we should be trying to move to a situation where there is an attempt to build consensus between the different players exactly as Clúid has been trying to do. Therefore, if there was a majority requirement of those in attendance at an OMC to pass a budget that would force earlier stage negotiations.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Legislation states that they do not. The legislation is very explicit. This is why it was a surprise to me. The legislation explicitly states that if somebody wants to block a budget at an owners' management company AGM, they need more than 75% of the votes. What has been happening is good OMCs ask for a majority. They go to the meeting say they are presenting a budget. We had two cases recently where budgets were passed with 25%, 26% and 27% of the votes of the people in attendance. Likewise, good OMCs are putting operationally significant changes to car parking or clamping to an AGM. There is no legal requirement to do so. We have had a number of them where they are not doing it.
The next issue is transparency because the MUD Act does not list in any detail what information an owner has a right or entitlement to. Very often it is because the volunteer directors do not have the capacity and sometimes it is because there are conflicts of interest between directors who have commercial interests that they withhold substantial volumes of information. For example, recently I had a case where refuse charges went up 40% between one AGM and another. The OMCs should be obliged to present a justification for that. In this instance, it was justified, and that was the actual increase in the costs. However, the owners were not given that information before the vote and that created conflict and tension.
On the issue of tenants, I think of Seven Mills in my constituency. A minimum of 30% of the residents are tenants, including social, cost rental and possibility some private. Tenants have no involvement in the legal structures and decision-making practices of the OMC. I acknowledge Clúid has been proactive in getting involved. However, local authorities are not getting involved in its OMCs or are only belatedly getting involved. We need to have a conversation and I have not worked out what the solution is. Is it possible for a landlord to delegate the voting responsibilities at an AGM to the individual tenants? That could be a private landlord or an institution investor. If we want to build cohesive communities, we cannot do that if a third of the folks are not even allowed in the rooms. There are challenges to that as well, but we need some consideration of that. I wanted to raise that because they are newish challenges.
Electric vehicle, EV, charging points is becoming again a real challenge because local authorities do not have clear policy on this issue. Some developments have planning permission for some points. Other folks, because they want to do the right thing and get an EV, install their own charging point without permission. That has all sorts of complex legal issues. It would be good if the Department in conjunction with housing bodies and OMCs developed a good practice guide to try regularise where there are charging points that simply cannot remain as they are because there is legal liability issues, but also where we get into a situation where in the grants of planning there is far greater provision of EV charging points so people do not feel like they have to break the law just to put the point in. It is causing enormous difficulties. I am sure Mr. Lambe is dealing with a number of locations.
In addition to the historic issues, there is a new set of challenges. The sooner this committee can get working with the Department and the Minister on those the better because justice is never going to discuss these things. This committee has a vested interest in resolving it. This could be one where we get good cross-party and -government consensus on it, which solves the problems that the witnesses are bringing to us. I hope that at some point we are able to communicate this stuff to the Minister when he has responsibility because there are big issues in those areas. The witnesses may wish to respond.
Mr. Brian Lambe:
The takeaway for me was the blocking of the budget piece because in practice I have found that, but the devil is in the detail. The comment was interesting around where should members have scope to have vote as a full membership versus the board. The counterbalance to the point that the Deputy is validly making is that some of these big decisions are warranted just, morally if nothing else to say, “You need to make sure that everybody is consulted.” The challenges in some instances conversely to that is that MUD Act states that every time an OMC is to carry out some capital expenditure such as replacing a pump, the theory is that they must call an EGM if there not an AGM coming. There is some work to do in terms of that balancing act between giving a board a level of autonomy to move at the right level of momentum, but also having checks and balances around big issues, such as parking.
On the EV points, I have the scars to prove it in some ways. There is something there certainly in the city centre. We hear of broader schemes being rolled out across the city versus individual owners versus the greater good and those debates about how people will avail of this and should we apply for the Sustainable Energy Authority of Ireland, SEAI, grant. It is an area that the SEAI want to look at and explore more around multi-unit developments, OMCs and how to support retrofits.
Mr. Sam Doran:
I have been approached about EVs for an underground carpark. The word I got from the fire officer was not within 15 m of the footprint of the building. Landlords can pass on a proxy to their tenant to come and vote for them as long as their management fees are paid up. That is with most of them.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Is that just an individual decision of Mr. Doran's OMC that it has allowed that to happen?
Mr. Sam Doran:
It is down to individual OMCs whether they want to withhold people because they have not got their management fees up. The proxy can be passed on to the tenant or anybody.
The new home for everybody is apartments. That is the way it is going. They are going through a hall door and there 30 or 40 families in there. It is important that they get on. There are young people, young people rearing families, old people downsizing, people with disabilities and foreign nationals there that are used to different ways in their lives. We believe it should be one vote per person in a development regardless of how many units. As the Deputy said, somebody who is a corporate landlord outside of the country does not know even know what the development is like, they are voting for their interests and not for how the people get on a day-to-day basis to build a community.
In our place, we are a fairly large development. All those people I spoke about have a great community. People get on well because we engage with them all. Most importantly going forward, it should be one vote in a unit regardless. Due to the fire defects, some corporate landlords got together and voted for levies, and then these poor people who could not pay were brought before the court. They have €30,000 or €40,000 in debt against them now. Their credit rating is totally non-existent. They still have these debts and we cannot get them shifted because that was the law. One vote per person in a development is a must to come back in to give those people a say in their development and what they want going forward.
Mr. Pat Montague:
On the issue of information, I have been at a number of AGMs of management companies and I have seen some really good examples and some shocking examples. This is why the regulator is so important.
Coming to good examples, one of the OMCs I am very familiar with would hold an information night a number of weeks before the general meeting, where everything in the budget is discussed. The Deputy talked about cost increases. The OMC would have, for instance, a person in charge or a contractor who helps people negotiate their energy costs. It may have somebody from the insurer. It have somebody there to speak from the key providers under the various headings, and likewise on progress or otherwise in relation to defects. The OMC is totally open to questions and answers or whatever. A couple of weeks later, you would have the general meeting and things put to a vote. Interestingly, things went through without much of a row or whatever.
What was interesting was that the compliance levels in terms of payment of service charges and other things were extraordinarily high in that development. In others, where things were held back and where it was seen that people were suspicious or worried, payment rates were unsurprisingly poor and the level of friction and conflict at general meetings was really high. They were like bear fights and deeply uncomfortable to be at. Whatever about being at a bear fight, the problem is that those people are facing one another in the lifts and corridors in the days that follow. That is just not a nice place to be.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank Mr. Montague. Did Deputy Cooney want to make any further comment?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Okay. We are okay with time for a little while. I am sorry I missed a good share of the debate earlier but I will go back to the defects, the main defect being fire safety, which is obviously very worrying and serious. In the majority of cases, no work has taken place yet. How bad is that situation, in the opinion of the witnesses? Are we at risk of a serious incident happening?
Mr. Sam Doran:
Any day, somebody might just have a cigarette before going to bed and be careless. Our biggest danger in a multi-unit development is cigarettes. It is as easy as that. Every day, God knows, we do not know when it is going to happen. Nobody ever thought Stardust was going to happen and it did. We do not want something like that to happen in an apartment block. Something has got to move quickly because it has been dragging on to long.
Mr. Pat Montague:
To be frank, it is actually on my conscience. It is something that worries me. I am aware of a number of things and of really risky developments. I was very hopeful - I am still hopeful, as I am a positive person - because when the then Minister agreed to the interim remediation scheme in December 2022 and it was set up a year later, given that we had to have the fire safety code of practice, we thought all of that was ready to go. It has not moved yet, though. I hope that today's hearing might encourage people forward on this because some of those four pathfinder projects have an extraordinarily high risk from a fire safety point of view. I know because some of the professionals working on them have said they have sleepless nights thinking about it.
I am thinking about the people in Mr. Lambe's development who saw a block going up. There are 12 blocks in his development on Clarion Quay, with another going up. It is really difficult for the people in the other 11 blocks to sleep at night with the anxiety and worry. I am conscious that, to be fair, the Minister has acknowledged that the slowness is a problem and we need to resolve this. The officials in the Department, certainly from recent discussions I have had, recognise this and the Housing Agency definitely does, as it knows this is not working. However, we need to quickly resolve the processes around the interim remediation scheme so that we can get grants out and works done. It is not removing all the fire safety risk. What it is doing is bringing the risk to an acceptable level but it is not removing all the risk because we are not putting fire stopping in. All we are doing is giving them a greater ability to evacuate safely in the event of there being a fire, so there is more to be done.
On retrospective payments and the legislation, there were eight pathfinders. We agreed that with the then Minister, Deputy O'Brien, last year and they have handed over all their information. They were promised last year that they would be reimbursed their moneys in 2025. That needs to be advanced.
This committee needs to have the legislation in front of it. I understand there are some good reasons with regard to allocation of staff in the parliamentary draftsman's office and all the rest but we need the legislation to come for pre-legislative scrutiny before this term is over at Christmas. If it seeps into next year, then we are looking to mid-2027 before the full scheme is up and running. Why is that? It will be 16 years since Priory Hall. It will be ten years since the "Safe as Houses?" report, which this committee drafted. Then, at that stage, it will be five years since the working group on defective homes reported. People will start to lose trust that this is going to happen. Confidence is at a low ebb as it stands because of all the delays. I hope the people involved will have a much greater sense of urgency emerging from this because that has been quite dispiriting at times, to be frank, seeing it drag out and drag out, recognising the risk that is there to people's lives.
Séamus McGrath (Cork South-Central, Fianna Fail)
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The risk that is there is unthinkable. We are not talking thousands, but probably tens of thousands of people who are at risk. You would have to say that this work needs to be done and we could sort out the issues afterwards, it is that urgent. As a committee, we will do what we can to highlight that issue further and push it because people should not be at that kind of risk. It is as simple as that.
I have one other issue. Again, I apologise if I missed this earlier. With regard to international best practice, if we move away from the defects, we have a lot of ongoing issues.
Séamus McGrath (Cork South-Central, Fianna Fail)
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If all the apartments were built perfectly well and fine during the Celtic tiger years and there were no defect issues, you would still have maintenance fund issues regarding ongoing and regular wear and tear. You have the sinking fund issue and there is the OMC issue. There are issues there separate to the defects, we will say. What is the witnesses' view on international best practice? There are plenty of countries with apartment blocks. We are not reinventing the wheel here.
Mr. Pat Montague:
We are not. In my view, one problem in policy circles in Ireland is that our default tends to be to look at examples from Anglophone countries. In this case, continental Europe is where I would be looking to - the likes of France, the Netherlands and Germany where, interestingly, they have very low rates of apartment defects compared to Ireland. This is partly because they have very different regimes with regard to holding builders and developers to account and stuff like different forms of contract.
I certainly think we should look at the experience in continental Europe where, let us be clear, apartment living in towns and cities is the norm. We need to look there for example rather than to other anglophone countries necessarily. To be frank, the UK is having huge problems. Its attempts to deal with defects are horrendous because it is tenants who are still ending up paying for this; the state is only paying for some of it. I would not look to the UK as a good exemplar. Countries such as France, Germany, the Netherlands, Denmark or even Austria are ones I would look to more than anglophone countries. That is my view on it.
Séamus McGrath (Cork South-Central, Fianna Fail)
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That is absolutely correct. We need to get rid of the fear factor, when purchasing an apartment, of ending up in a quagmire of issues around management companies, fees and neighbours not paying. It was mentioned that when you meet people in the lift who have not paid, and you know they have not paid, it becomes a whole issue on a personal level and so on. Unless we address those issues comprehensively through proper systems and regulation, developers will be reluctant to build apartments and purchasers will be reluctant to buy them. Unless we get on top of this as a country in terms of apartment building-----
Mr. Pat Montague:
It is a very different model. Living in a multi-unit development is a very different model from living in a house. Your neighbours are not just side by side - they are below and above you. Noise is a much bigger issue than it tends to be in houses. My son likes to play the guitar. Thank God, his bedroom does not adjoin another house, which helps, but it is a loud electric guitar with loads of pedals, reverb and all the rest of it. That is not the way you can do it if you are in an apartment.
Mr. Lambe mentioned information. We have a massive journey to go on. It is a very different culture and model of living but it is also a very good one. I will go back to my parents' experience because they are old. My father is aged 93 and my mother is 88. Their neighbours have been fantastic to them in helping them with things. Their mobility is impaired but the fact they can use the lift to get in and out gives them huge freedom. They do not have to do big maintenance work. They have a beautiful balcony that overlooks the grounds of All Hallows College. They have an incredible quality of life that they would not have if they had stayed in the house they had.
Séamus McGrath (Cork South-Central, Fianna Fail)
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It has the potential to be a great community-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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-----but because of the issues it can be a very-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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There is great security and a whole range of issues.
Mr. Brian Lambe:
To the Deputy's earlier question, what we see in other jurisdictions is better regulation. We see better avenues to resolve disputes and collect service charge arrears. As the Deputy said, there is no need to reinvent the wheel. There is something in learning more from best practice and knowing we are on the right road when we are considering regulation, oversight and support.
Séamus McGrath (Cork South-Central, Fianna Fail)
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It is about regulation and dispute resolution processes and so on, so that it is not a neighbour fighting it out with another neighbour. There should be a process for independent resolution. It is basic but it is missing, unfortunately.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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It is important to understand that we are not just talking about apartments. This is another change that has happened. While for some of the historical Celtic tiger developments a multi-unit development meant apartments, there are some, such as Hunterswood, where there are houses. Increasingly, the way in which multi-unit developments are being planned in our urban centres means everybody is tied into the OMC. For example, in the new developments at Adamstown and Clonburris, even the houses now have increased volumes of communal areas that are designed in the most bizarre way. Corner houses, where typically there was a boundary wall into the garden and the driveway, do not have a boundary wall and a portion of what would have historically been their garden is a communally planted area, which ties them permanently into an OMC. You then get into battles about who pays for what if there are defects or if there is a management fee. Looking at Clonburris, however, which will be 8,500 homes when it is finished, every single house - it will be nearly 50% houses - will be tied into OMCs in perpetuity.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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All duplexes are tied in.
This also relates to defects. There are a small number of multi-unit developments with defects, where some of the defects may well be in the rows of houses. It is important when we get to that legislation that we do not, in all instances, exclude houses where there is a demonstrable case that there are, for example, some issues within rows of houses. There is a row of houses in a brand-new development at Kilcarbery Bridge where the back garden is communal. Even though these are individual houses, the back garden is a communal garden. This was in the plan that was approved by the planning authority. There is a tiny bit of curtilage in front of the front door, which is private, but it is then communal and public. Even though these are all individual houses, because of the way in which this has been planned, those homeowners are more akin to apartment owners although they have a freehold rather than a leasehold. They will continue to pay a management fee of between €600 and €1,000. Apartments will pay a management fee of €2,000.
All of these things will have to be teased out. Cork will be the same when it starts getting some larger developments. We had cases in the past where, at the point of taking in charge, houseowners opted out of the OMC. That is no longer possible in terms of how new estates are being planned and developed because they will always have some communal areas. That is an important point to finish on.
Mr. Pat Montague:
That is something in terms of the review of the legislation. I had a communication from an Oireachtas Member about that very point. I have also had several from houseowners who have been affected by defects asking whether they will just be left high and dry. There needs to be some flexibility in both pieces of legislation to cover the issues the Deputy talked about.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I will make a few points before we finish up. I have read through the opening statement. I come from Longford, where there would not be a significant number of apartment buildings, but the whole management company issue is something we suffered on the back of the Celtic tiger and section 23. Housing estates were developed and built, management companies had to be put in place and, generally, the contractor or developer, maybe six months afterwards, wrote to the Companies Registration Office, CRO, which took their name off the management company and basically left it with the residents. In a lot of cases, it was package treatment plants and so on that ended up packing up. There were issues like that. I acknowledge all of it.
The committee needs to highlight the fact this issue has not transferred from justice to housing. That is the reason the Housing Agency and others were meant to be at this meeting, when we planned this months ago. It should be done. We need to highlight that as something that needs to happen.
I am astounded to hear the number of applications that have been made, etc., without one grant having been paid out.
Mr. Pat Montague:
There are 214, representing just short of 20,000 apartments, but there have been no grants yet. That will be two years up and running on 11 December this year. To be fair, one of the issues that came out of leftfield was the issue, which Mr. Doran alluded to, of public procurement. The way the scheme was originally designed was to be a light-touch application process. It was only on 13 or 14 December last year when a number of grants, including Mr. Doran's, which had provisional approval, went to the Housing Agency board. The Department was due to pay out the money the next day when somebody on the board said to hold on a minute, that the vast bulk of money for remediation purposes was from the public purse and it had to go up on eTenders. There are other models of procurement, which some members will be aware of and which we will talk about with the Housing Agency, but that has now become a millstone around the neck of this scheme.
People with no legal, financial or construction experience are now trying to navigate public works contracts. It has become an absolute nightmare.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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The witnesses have highlighted a number of buildings in conditions that are quite dangerous. I proposed earlier that the committee would go out and see those.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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It is a lovely part of the city.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Yes, Mr. Montague can liaise with the clerk in relation to that. The witnesses' written submission asked us to look at the Netflix documentary "Grenfell: Uncovered" to see what could happen. It is a stark thought that that could possibly happen. We all know what happened there and it is something we do not want. We have been told we have buildings in which it could happen and that it nearly happened in an incident that was mentioned. We need to make sure remedial action is taken. Apart from paying people for work already done, we need to stop something possibly worse happening, that is, the loss of a single life. That would not be acceptable.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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If we are going to write to the Minister for justice to ask him to expedite legislation to transfer responsibility for the MUD Act, maybe we could write to the Minister for housing and urge him to do everything he can to expedite funding for those interim fire safety projects.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Is that agreed? Agreed.
I thank the witnesses for coming in. They have highlighted the issues and concerns exceptionally well to the committee and public. They have informed committee members of what we need to do and what we need to highlight. It is something we are collectively willing to do. The opportunity to meet the witnesses on site is important. We will organise that.
I propose that the committee continue in private session to discuss other matters. Is that agreed? Agreed.