Noel Ahern (Dublin North West, Fianna Fail)

There is broad consensus in the Oireachtas that stage payments should not be a normal feature in the purchase of houses in residential estates. As has been noted, the Government indicated in June 2004 that this was its preferred position and undertook to work with the stakeholders involved towards a resolution of the issues. Substantial progress can now be reported and I believe it would be more beneficial to house purchasers to finalise good solutions on this basis rather than invoking a legislative solution which could prove to be too inflexible.

A legislative approach risks being too rigid in an area that concerns private transactions and where circumstances can vary. Moreover, the introduction of additional statutory requirements in this area could add complexity to the process of property purchase.

It is usually preferable to proceed on the basis of agreement rather than by compulsion. This has been the basis of much of Ireland's overall economic and social progress for nearly 20 years. In the case of stage payments, as every Member of the House will be aware, this practice does not exist in many parts of the country. The vast majority of the enormous numbers of new houses which are sold each year are transacted without such a system. This situation obtains as a matter of market practice without any statutory intervention. The logic should be to facilitate the extension of this approach throughout the country.

Consequently, I am pleased to be able to inform the House that in recent days, the Department has received a strong commitment to pursue the voluntary phasing out of stage payments from the Construction Industry Federation's branch in Cork, which is the main centre where such payments now occur. In a letter addressed to the Department, it has indicated that its members have made a strong recommendation to the Irish Home Builders Association, IHBA, at national level to the effect that it should immediately enter into discussions with the Department with a view to voluntarily phasing out stage payments within a relatively short timeframe. I understand that this recommendation has been endorsed by the national body of the IHBA and the necessary follow-up arrangements will be put in place without delay.

This commitment on the part of the Cork Construction Industry Federation, CIF, members has followed efforts by the Department over a long period. It represents a major advance which will, I believe, lead to the early ending of the practice of including stage payment requirements in house purchase contracts in the case of housing estates. By an early ending, I envisage that the practice should be phased out within the next nine months or thereabouts and that whatever agreement may be required for this purpose should be fully concluded before the Oireachtas resumes in the autumn.

The option of legislative action would, of course, be available as a fallback position in the event of the matter not being brought to a satisfactory conclusion at an early date. In that regard, I should point out that the legislative approach proposed in this Bill is not considered to be appropriate. It is drafted as a stand-alone measure under a housing title, whereas any legislative measure in this area would require framing in the context of legislation relating to house purchase contracts and regulation of conveyancing practices as recommended last year by the Law Reform Commission.

Perhaps the last time this matter arose in this House two years ago, I was foolish to more or less accept that the Department would deal with this issue. It has nothing to do with the housing section of the Department. As the matter pertained to housing, I decided to try to use our influence to try to solve this matter by agreement in a consultative manner. However, if Members wish to adopt a legislative approach, this matter should be under——