Joan Burton (Dublin West, Labour)

I am disappointed with what the Minister of State had to say. He is particularly familiar with Fingal County Council and he and I have discussed this issue with the manager some time ago.

The development of the affordable housing programme, especially in the Fingal County Council area, has given an opportunity to many people to acquire a home of their own and developments, particularly in areas such as Tyrellstown and Castlecurragh, have proved very popular. Many young couples, however, find that having acquired their dream home, there is a hidden clause in the deal — a management company to which they are signed up when they agree to buy the house.

This management company, typically in the direct charge of the developer, the developer's brother or the foreman's son, then proceeds to levy a charge ranging between €400 and €1,200 per household for keeping the estate in order. Many young couples are outraged to find that unbeknown to them, they have signed an apparently legally compelling condition to pay this charge.

In Fingal County Council in a number of developments, for example, at Hillbrook and Castlecurragh, the council offered a package deal to purchasers whereby the council's solicitor acted as solicitor for the purchasers. This was done obviously to save money and on the face of it was a very attractive option. The downside, however, is that when queries arise later, there is very little recourse to the solicitor who is acting for two of the parties to the transaction and there is a clear conflict of interest.

As a result of the legal arrangements with solicitors acting for both the council and purchasers, many purchasers have not seen the detailed legal agreement that they have entered into in purchasing their house. In one case in west Dublin where issues have arisen about the quality of the gas central heating and problems with condensation and other elements of the finish of the houses, many of the purchasers had no copy of the contract agreement. It was held by the council as the mortgage holder or arranger and residents had to contact the council repeatedly to get the information. In such a case, the management company was useless in assisting residents being still under the control of the developer. The developer had built the affordable houses as a fulfilment for the social and affordable housing he had been required to provide for a development some miles away in Castleknock. When some residents eventually sought separate legal representation, the council stopped responding to them and me, claiming that the matter was now in a legal process and it could not comment. That is not acceptable.

County councils are not advising purchasers of the obligations they are signing up to. There is a view that once houses maintain their capital value and perhaps increase in capital value, purchasers cannot complain. This misses the point entirely that this is a new form of arrangement which most people know little or nothing about. Councils are abusing their dominant position by failing to advise purchasers properly and there is no transparency in the arrangements. Those councils have a duty of care to purchasers, particularly the solicitors. This is a matter the Incorporated Law Society should examine as the purchase of a house is the biggest purchase that most people make in their lives.

The development of the management company has become a substitute for the taking in charge of estates. It is galling for new purchasers of houses to find that they may be paying up to €1,200 a year for looking after their estate while affluent older estates have the same services provided by the local authority. This is another stealth tax and it is part of the ongoing conspiracy between the Government, particularly Fianna Fáil, and their friends in the building industry to continue the rip-off of home buyers. The Minister for the Environment, Heritage and Local Government has failed to clarify why the taking in charge procedures are being abandoned. The only explanation is that it is a back door to privatising essential services and imposing stealth charges on new home owners.

Last June there were major problems with the contamination of the water supply at Tyrellstown in Dublin 15. Following lengthy correspondence and discussions, the county council finally admitted to me that the water supply to this large development of more than 2,000 homes, which were occupied, was under the control of the developer and the management company. The lids of the holding tanks within the estate contaminated the water and the council had no control over this, except under public health legislation, because its water supply was not contaminated. As a result, tankers delivered water to the householders for a few weeks. It is outrageous and potentially dangerous if we must rely for water on developers and builders and not on the public authorities to whom we pay our taxes. The same applies to the green areas, roads and public lighting. Why should these areas not continue to be taken in charge by the local authority?

I appreciate management companies may well be appropriate in respect of apartment complexes, duplexes and triplexes which share a common roof and common internal and external spaces, as Deputy Upton has discussed at length. However, this should be done on a co-operative basis, as happens in many other countries, including the USA where home owners run their own apartment blocks. They make provision for investment or sinking funds and the long-term maintenance of apartment blocks such as roof repairs and repainting the building every few years.

The Labour Party has introduced a Bill to provide for the modernisation of the taking in charge process to compel builders to finish off estates properly. The planning process would also be empowered to take into account a developer's previous record on finishing estates before giving him planning permission to commence a new development. The Government has accepted the Bill in principle but has left it in the parliamentary equivalent of Siberia and we await the day the Government allows the Bill to proceed.

The development of management companies has implications for conveyancing when houses come up for sale. Significant legal problems are mounting. There is a great deal of confusion, including when home owners opt to remortgage to finance improvements. They are subject to the clawback but it has emerged that, legally, the clawback is on the mortgage initiated by the county council, not on the sale of property. The Minister of State will have to sort this out legally. If one remortgages one's home to obtain extra finance, one must redeem the original mortgage and pay the clawback before engaging in home improvements. It is a surprise when people find this out.

I am deeply disappointed by the Government's pathetic response to the reasonable arguments put forward by the Labour Party to address this problem. The Taoiseach and the Minister for the Environment, Heritage and Local Government say Fianna Fáil agrees people in traditional houses should not face management charges but they refuse to do anything about it. The Minister is commissioning another set of reports from local authorities and is waiting on a Law Reform Commission report. All this could take years following which the Minister could leave them on the shelf, like all the other reports. In the meantime, many home owners are being abused by management companies. The only beneficiaries in this process are Fianna Fáil's friends in the building and development industry. Once again, if there is a choice between house buyers and the building industry, Fianna Fáil can be trusted to always pick the builders.

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