Dermot Ahern (Louth, Fianna Fail)

This relates to the 5% of the purchase price being withheld. This was considered by an interdepartmental group which was set up to look at the Law Reform Commission recommendations. At the time the group sat - it is some time ago - it came to the conclusion that a developer might react by simply increasing the sales price by 5% and it would prove completely ineffective in securing completion of the development.

My experience over many years as a solicitor and a practising politician is that when we interfere in this way, the price tends to be increased. I remember when housing grants were given over the years and the builder would put the sum of the grant on the price. There was no net gain to the purchaser as a result.

Considering the experience of one-off building, why is it that up to now we have not had a standard that where there is a purchase of property built by a developer, the purchaser does not withhold money at the end? It may happen in certain cases but it does not occur as a standard, particularly from a legislative perspective. Perhaps if we take 5% to ensure the completion of the common areas, we should also mandate in law that another 5% be taken to make sure the unit itself is completed.

I have some sympathy with the issue and I appreciate that the economic matter has moved on a little since the interdepartmental group took the view on the 5%. I would hasten slowly on this because the Legislature should not make an amendment only to find that another 5% would be lumped on the cost for the purchaser. I will look at this between now and Report Stage and before it comes to the Dáil to see what we can do in this respect without any potential difficulty with the purchase price.

We have looked at some of the models across Europe and our model of the management company etc. is probably the exception rather than the rule. I am open to suggestions, although I am not altogether sure if this is the right amendment as it might raise the price of the dwelling.