Michael Finneran (Roscommon-South Leitrim, Fianna Fail)

To the end of June 2010, my Department had approved over 2,330 units for use under the social housing leasing initiative. Of these, some 1,830 have been issued with funding approval, of which 175 are private lease units to be provided by either a local authority or an approved housing body, AHB. Of the private lease units approved under the initiative, 47 have lease agreements signed and commenced in 2010. The average monthly cost of these units is €612 per unit and the full year cost is €7,342 per unit.

The discount levels achieved in these agreements has varied; 40 units have achieved 20% below market value, two have achieved 18% below market and a further five have achieved 16% below market value. The variation in the levels of discount achieved arises because in some circumstances the property owner has retained responsibility for maintenance and management. In addition, a wider discount range may also apply in cases where the owner has retained responsibility for service charges.

With regard to the inclusion of an option to buy clause within the lease agreements, of the 47 units leased from private landlords this year 30 have an option to purchase clause included in the lease agreement. The provision of an option to purchase clause is a matter most appropriately dealt with by the authority or approved body on the basis of individual negotiations. It is considered that restricting the negotiating flexibility of authorities or approved bodies could lead to increased leasing costs and may in certain circumstances reduce otherwise available supply. To assist authorities in circumstances where it is appropriate to include an option to purchase my Department has provided template option to purchase clauses, as part of a suite of framework legal documents, which can be inserted into agreements as required.

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