Michael Finneran (Roscommon-South Leitrim, Fianna Fail)

Amendments Nos. 3, 13, 14, 18, 19, 87 to 114, inclusive, 142 and 157 deal with the tenant purchase of apartments. I am delighted to report back to the Seanad on these significant amendments to facilitate the introduction for the first time of a scheme of tenant purchase for local authority apartments. The proposed scheme will deliver on the commitment outlined in the Government's housing policy statement and remove the glaring anomaly in the existing tenant purchase scheme that households allocated a local authority house have the right to buy but those allocated a local authority apartment to date have had no such opportunity.

The tenant purchase model agreed by the Dáil is based on a long-standing arrangement in the private sector for the ownership and management of multi-unit residential developments and the substantive provisions in this area are contained in amendments Nos. 87 to 114, inclusive. For the benefit of Senators, I will outline in general terms how these provisions will work in practice.

Under the proposed scheme housing authorities will be required to conduct a tenant plebiscite in individual apartment complexes proposed for designation by the housing authority for tenant purchase. Where the plebiscite shows that a minimum number of tenants are in favour of designation and that a minimum number of tenants are willing to serve as directors of a management company if they proceed to buy their apartments, the housing authority may designate the complex.

The authority will transfer ownership of each designated complex to a new management company established for the purpose, which will immediately lease all apartments back to the authority while retaining ownership of the common areas and services. The authority will continue to let the apartments to the existing tenants who, subject to meeting the prescribed minimum tenancy requirement, will have the option of buying them from the authority under the incremental purchase arrangements. Sales will proceed provided that the first sale takes place within a specified period after designation and that a minimum proportion of all the apartments in the complex are to be sold.

The housing authority will continue to be the landlord to tenants in the apartments that remain unsold in the complex. The tenants of local authority apartments will be able to purchase their homes for a proportion of the market value with a charge being placed on the property in favour of the authority or the body concerned for the portion of the equity not paid for, declining over time until the charge is eliminated. The charge share will reduce in equal annual equities releases over 20 to 30 years of occupancy of the property unless the housing authority invokes provisions allowing for the suspension of the releases in cases where the purchaser breaches the terms of the lease. This means that the equity stake not purchased at the outset, in effect the discount, will be given free of charge to the purchaser provided the terms of the scheme are complied with fully.

If the tenant purchaser wishes to resell the apartment during the charge period, the authority has first refusal in buying it back. If the authority declines to buy back the apartment, the tenant purchaser may sell it on the market in which case he or she must pay the authority the value of any outstanding charge on the property.

This is, of necessity, a complex business. The arrangements I have outlined are not straightforward but I believe they are the right ones. I am prepared to endure a little complexity if it ensures that the interests of the State, the housing authorities and, above all, the tenants who wish to buy and the tenants who wish to remain tenants are protected.

The remaining amendments in this grouping are all related directly to the new provisions and provide for the miscellaneous technical amendments to improve the clarity and understanding of this part of the Bill. I am sure Senators on all sides of the House will welcome this provision. I thank Members for their interest in this issue.