Willie Penrose (Longford-Westmeath, Labour)

I thank my party colleagues, Deputies Ciarán Lynch and Kevin Humphreys, for raising this important matter and am pleased to have the opportunity to inform the House of the position with regard to the proposed scheme for the tenant purchase of apartments.

The sale of local authority apartments to tenants has a long and chequered history, as outlined by my colleagues, due largely to the complexity of the issues that are involved in devising ownership arrangements that will protect the interests of everyone involved into the future. Part 4 of the Housing (Miscellaneous Provisions) Act 2009 underpins the scheme now proposed, building on the long-standing arrangements in the private sector for the ownership and management of multi-unit residential developments.

The scheme provides for individual complexes to be designated by the housing authority for tenant purchase, where they meet certain statutory criteria and a substantial majority of the tenants living in them signal in a plebiscite that they wish to have the opportunity to purchase their apartments. Before the first apartments are sold, the authority transfers ownership of the entire complex to a management company established for that purpose, which immediately leases all the apartments back to the authority. The sale of individual apartments is effected by the transfer of the management company's apartment lease from the housing authority to the purchaser.

The new apartment sales scheme will be based on the incremental purchase model introduced in June 2010 for designated newly-built social housing. The level of discounts under the new scheme will, therefore, be related to household income rather than length of tenure. The incremental purchase approach will promote sustainable communities in the complexes concerned because it gives an incentive to purchasers and their families to remain living in the apartments. At the same time, the selling arrangements will ensure the State shares in any windfall profit from re-sale of the apartment before the housing authority's charge on the property withers away. I emphasise I have no proposals to amend the 2009 legislation with a view to selling apartments by any other method.

The necessary commencement order, regulations and detailed guidance must be finalised for the apartment sales scheme to be introduced. The transition from a rented social housing apartment complex to a mixed tenure of privately-owned and social-rented accommodation adds an extra dimension to the legal and practical problems that can arise in private apartment complexes. For this reason, my Department is giving particular attention to the drafting of the necessary documentation for the three complex transfers of property ownership involved in the scheme and for the establishment of the management company, as provided for in the legislation.

My aim is to put in place as soon as possible the last building blocks in a robust legislative framework that will stand the test of time for all stakeholders, that is, apartment buyers, apartment tenants who choose not to buy, and local authorities. I will commit to making progress as quickly as possible on this important issue which, as expounded by both Deputies, focuses on fairness and equality. I will pursue it as expeditiously as possible within the legal complexities as outlined previously.

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