James Bannon (Fine Gael)

There is evidence that the practice is spreading, in particular to County Kildare. It has resulted in some homeowners in these areas paying an extra €7,000 for the price of their new home. Regardless of the counties affected, the practice is totally unacceptable.

The Bill aims to address a serious loophole in the law which leaves consumers at a distinct disadvantage when purchasing houses using stage payments, to which they often have little or no alternative, a fact that has not escaped the average developer. While stage payments reduce buyers' bargaining power and add considerably to their costs, there is little they can do. The practice of stage payments is wholly one-sided and entirely anti-consumer. It is entirely inequitable that a consumer should pay up to 90% of the price of a house before he or she gains possession. The practice is driven by developers and defies all moral values.

As the direct result of stage payments being demanded in such circumstances, purchasers end up paying their mortgage repayments well in advance of moving into the house, which is entirely unfair and untenable. Paying the bulk of the purchase price of the house before it is completed, inevitably reduces the consumer's bargaining power with the builder and provides little impetus for the builder to complete the project on time and to specification. It so ties the purchaser to the developer or builder that the latter could be said to have a free hand, as the law now stands. It also involves transferring certain financial risk inherent in the stage payment system to consumers in addition to imposing unwarranted costs on them. This is unreasonable and incompatible with the ability of many consumers to carry such one-sided impositions.

The Bill does not seek to outlaw the provision in contracts for stage payments where a single house is being built to the specification of a consumer, particularly for once-off housing. However, in other cases, the practice of stage payments is one-sided and confers no benefit, but rather penalties on consumers. I hope the Government has the foresight and the willingness to accept this legislation.

Some 25,000 house purchasers and their families await the Government's response to this Bill, and they all have long memories. A general election is approaching and candidates will be running in Munster and the west, including Sligo. All those people will watch to see the Government's reaction to the Bill.