Joan Burton (Dublin West, Labour)
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Question 503: To ask the Minister for the Environment, Heritage and Local Government the situation of a homeowner who has purchased an affordable house through a mortgage with Fingal County Council and who wishes to remortgage with another finance company but is being asked to pay a clawback as a condition of being permitted to remortgage; if such is the policy of his Department; and if he will make a statement on the matter. [37830/05]

Noel Ahern (Dublin North West, Fianna Fail)
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Houses sold under the various affordable housing schemes at a discount from market value contain a clawback provision, which is necessary to ensure that there is no short-term profiteering on the resale of a house. In the traditional circumstances where local authorities were the sole supplier of mortgage finance for affordable housing, authorities registered the clawback as a charge on the mortgage deed or, in the case of shared ownership transactions, inserted it as a clause or condition in the lease. This allowed them as lenders to readily enforce the clawback.

Following extensive discussions with my Department, two of the main financial institutions have introduced schemes of mortgage financing for persons who wish to access affordable housing. These mortgage products were introduced consequent to agreement with the institutions on the rankings of the various charges, which included provision for a clawback as a charge on the property. Discussions are under way with several other leading private lenders with a view to initiating similar products.

Since the introduction of these mortgage products, some difficulties have been encountered by persons wishing to remortgage with the private lenders. It is reasonable for a local authority to allow remortgage through a private lender provided the clawback provision is fully protected and it would be a matter for the local authority in such cases to ensure that the clawback can be imposed as provided for in legislation. However, with a view to achieving a widely agreed solution for this kind of case, my Department is in communication with the private lenders about standardising arrangements. I hope that these will be finalised and put in place as soon as possible.

Joan Burton (Dublin West, Labour)
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Question 504: To ask the Minister for the Environment, Heritage and Local Government the guidelines provided by his Department in respect of legal advice and fees arising from the purchase of affordable and shared ownership houses; the number of local authorities who are providing such services in-house through council solicitors; and the right of recourse purchasers have in the event of legal queries arising. [37831/05]

Noel Ahern (Dublin North West, Fianna Fail)
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In selling houses to individuals under the various affordable housing schemes, local authorities provide a variety of services to facilitate the speedy execution of sale transactions. My Department does not have detailed information on the scope of these services. However, as with any other private house purchase, the intending purchaser is responsible for the engagement of their own legal representation as they deem necessary and consequently the payment of any legal fees arising. Accordingly, any disputes and queries that might arise are a matter for the purchaser and seller through their own legal representation.

In the case of a shared ownership transaction, the local authority purchases the house initially and facilitates home ownership by the applicant in two or more stages through a leasehold arrangement. Guidelines on the operation of this scheme issued by my Department state that it is a matter for the applicant to choose whether to have independent legal advice on the transaction. The guidelines further state that any costs incurred by the authority arising from the legal investigation of title with regard to the making of the loan on or after 1 September 1997 must be paid by the authority and cannot be passed on in any way to the borrower.