Bernard Durkan (Kildare North, Fine Gael)

I am delighted to at last have an opportunity to speak on this long-promised Bill. It must be about seven years since it was first mooted. Several promises were made as regards when it would come into the House. I do not know what the reluctance was. It looked as if it could give rise to an embarrassing situation and nobody wanted to bring the Bill before the House when we could debate it. It is here now, and I am not so sure that it will work, but I hope it does. It is like much of the legislation we have passed over the years to address particular issues that Members will readily recall. Four or five years later we find they have not addressed the issues at all.

No pun intended, there is a multiplicity of issues in this particular situation. For instance, there was then and now. As we hear so regularly, "that was then, and this is now". The situation that arose with most of the developments which are the subject matter of this legislation was prevalent in the boom time. Developers could not get out of their estates quickly enough. It was a question, in many cases, of a management company being set up to complete the development and take on responsibility for the planning permission conditions imposed in the first place. That, of course, resulted in very serious problems.

In the greater Dublin area, certainly, there are numerous cases of residents who are deeply dissatisfied and object strongly to the operation of some management companies. Some management companies have worked well and shown consideration, where responsible people were in charge who tried to do their work in accordance with company law and everything else. I have to pay tribute to them. Others were apparently set up by developers to allow them to abdicate their responsibilities and move away to more lucrative pastures. People say that there is a reluctance on the part of some residents to pay the charges. Such assertions must be measured against the current climate.

For example, in most new housing situations, the charges and costs imposed on residents are massive when one considers that the unfortunate people concerned bought their dwellings when the Celtic tiger was roaming the land and they were in fear of never getting a foot on the housing ladder or having a home of their own. They went in fear of having to rent for the rest of their lives, and they were scared. They queued up all night in many situations to have the privilege and honour of putting a deposit down on an apartment or house. Having waited all night, they could be told the following morning that the particular apartment type they wanted had gone up overnight by a further €25,000 or €30,000. In one particular block in the Lucan area, the price of the houses increased by €80,000 over a weekend, which was absolutely crazy. I can well understand that we now have a situation whereby unfortunate home owners are in difficulty. Usually they will have to meet substantial mortgage repayments, in the region of €2,000 a month, or certainly €1,800 or €1,900 a month for a very modest type of house. On top of that if both partners are working they might have to pay for child care facilities, which comes to another €2,000 a month, which now means €4,000 a month overall. On top of that they have ordinary day-to-day household expenses. If they do not live near a rail station or other public transport mode, they could face at least €1,000 a month for motoring costs. To fund such activity a person must be on at least €80,000 a year. How can one expect people to afford such charges?

When first introduced, the building control legislation was perceived to be a panacea for all building difficulties. However, even a superficial inspection of some developments around the country would shock one. Many of them would not pass any building regulation tests because nothing was complied with. They were thrown up in a hurry without, for example, proper insulation. The developer could not care less as they were handed over to the unfortunate purchaser and management company.

Some have referred to the architectural flair of many of these new developments. Architectural flair, how are ya. While I accept there are some exceptional developments, others would remind one of a Mediterranean resort in which the developer had gone bust, leaving behind buildings of appalling quality.

An earlier speaker referred to duplex apartments. I do not know how anyone gave planning permission for this type of apartment. They have an open stairwell on the outside on which mothers with children must drag their prams. Did we learn anything from experience? At a public meeting recently I heard someone describe this type of apartment as a much sought after development. These are where one house is planted on another with a stairs outside like on a grain loft in the old days.

The Government claimed the country was awash with money in the boom times. I recall the then Tánaiste and Minister for Justice, Equality and Law Reform claimed the Government did not need the revenue from stamp duty on house sales. During that time, house builds were woeful. It is sad to see what has happened now in the downturn.

I can well understand why we have Mexican stand-offs with residents in particular areas feeling aggrieved at having to pay for what they regard as an inferior product. For example, there is the wood effect put on the exterior of many apartment blocks. While it looked great for the first year, it began to fade in the second year and then turned a really nasty colour in the third. These effects do not weather well in this country's climate which is very different from those where such effects are used successfully on exteriors.

All Members have been inundated over the past eight years with requests from residents concerned with the operation of their management companies, particularly where the companies are not well disposed towards their residents and attempts made to extort exceptionally high charges with little or nothing in return.

The need for a management company in estates of single houses is not obvious to me. In fact, services provided by the local authority in the past are now provided by the management company in return for a fee. There are so many charges to be paid by the unfortunate resident that he or she will not know where to start or finish. This is at a time when incomes have come down due to the various income levies imposed and some households have lost one if not both incomes.

It is fine to say they should not have entered into those contracts during the Celtic tiger and should have known what they were doing. It must be remembered, however, back then people were told if they did not get on the property ladder they would be renting for the rest of their lives. This was also the time when people were paying up to €2,500 a month in rent for fairly modest properties. If regulations had been applied more rigidly during the course of the building boom, we would not have so many of the problems we have now.

There used to be a house-builders guarantee scheme which was replaced by the HomeBond scheme, the answer to everyone's prayers. The scheme is scarcely able to exist now. In most cases where a householder or apartment owner seeks the bond to cover some external repairs, they are informed they are not the scheme's responsibility. In the case of pyrites present in cement in some housing developments in north Dublin, the maximum payment from the scheme will be €30,000 when the entire house will need to be levelled and rebuilt.

In future developments in which management companies will be involved after completion, I suggest consideration is given to low-maintenance grounds and facilities - in other words, trees and grass, for example, that would not have to be cut regularly. These would be more suited to multi-unit developments than ordinary housing estates. The more cost burdens are put on the heads of the unfortunate residents, the less the chance they will actually be able to meet their commitments leading to the management company collapsing. I accept companies have to collect fees and charges from those residents who refuse to pay. However, when those residents explain their circumstances, the whole matter suddenly is brought into perspective. This is on top of developments not completed in accordance with planning permission conditions and not functioning properly with ongoing maintenance problems which should be the responsibility of the developer in the first place.

I hope we can learn from the experience of the past ten years to good effect. I recall speaking on this very subject in the House nine years ago. The media was very helpful to me, giving me a full picture on the back of the following day's newspapers. They were not really applauding me for what I said, but I had predicted all the issues that are now facing the general public - the possibility of a collapse in the housing market, the quality of developments and maintenance costs, which will increase as time goes by. For a poor development that is poorly finished and requires ongoing maintenance, these costs will increase with every passing year. We can have all the management companies we like; it will not change anything. There are builders who will now tell one openly that some of the developments built over the last ten years will fall down. They cannot see how they will last for 30 or 50 years. There are major issues facing us in this regard.

I must point out that there are distinctions: as well as those responsible for problems, there are some builders and developers who have been very conscientious, and it shows. When one drives into the estate, one can tell straight away that they have done a good job. There are others - God help them - who just rushed in and then rushed out as quickly as possible. Development levies were not paid to local authorities and still have not been paid. For some developments, the conveyancing was not done properly. Where there was the option of estates being taken in charge by local authorities, some of them were never completed in accordance with requirements and, as a result, the taking in charge will drag on for years.

I hope that some of what is contained in the Bill will address the issues that have arisen. Every Member of this House has personal information about what the requirements are and have been over the last number of years. We should try not to allow a repetition of the problems we have seen. We should try to ensure that certain standards apply - that, like the guarantee scheme, it does work. It is an insurance scheme; it is supposed to work. Thirty years ago, under the house building guarantee scheme, local authorities were able to strip the roofs off houses, take them down to the foundations if necessary and rebuild them - and they did so, leaving them fit houses. We cannot do anything like that any more.

I could go on but you will be glad to know, a Leas-Cheann Comhairle, that I will not. We hope this Bill does something to address the issues faced by people living in such units. For the sake of the unfortunate householder who has the responsibility of paying a mortgage on a monthly basis, along with a whole lot of other charges, we must ensure the management company charges do not become larger than the mortgage itself.

See this speech in context