Written answers

Wednesday, 9 May 2012

Department of Environment, Community and Local Government

Planning Issues

9:00 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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Question 129: To ask the Minister for the Environment, Community and Local Government the position regarding a developer who is made bankrupt but still retains ownership of an estate with a bond on it; what happens the bond; if he will confirm if it automatically transfers to the local council; if it will transfer to a different party; and if he will make a statement on the matter. [23292/12]

Photo of Jan O'SullivanJan O'Sullivan (Limerick City, Labour)
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Sections 34(4)(g) and 180(2)(b) of the Planning and Development Act 2000 provide respectively that a planning authority may attach conditions to a planning permission requiring the giving of adequate security for the satisfactory completion of a proposed development and, if a development is not subsequently completed satisfactorily, may apply a security, given under section 34, for the satisfactory completion of that development. My Department has consistently advised planning authorities that it is essential that planning permissions for residential developments are subject to conditions under which an acceptable security is provided by way of bond, cash deposit or otherwise so as to secure the satisfactory completion of those developments. Planning conditions must require the giving of sufficient security prior to commencement of development and planning authorities should ensure that they are in a position to draw down the security in cases where a developer fails satisfactorily to complete a residential development, or phase of a development, within the specified period.

It is a matter for the planning authority to determine both the level of the security, the duration and the type of security (e.g. the lodgement of a bond from a financial institution such as a bank, insurance company or building society, a cash lodgement or a letter of guarantee from the Construction Industry Federation) that will be required for each residential development. The amount of the security, the duration and the terms on which it is required to be given, must enable the planning authority, without cost to itself, to complete the necessary services (including roads, footpaths, water mains, sewers, lighting and open space) to a satisfactory standard in the event of default by the developer. Similarly, the enforcement of planning conditions, including conditions in relation to bonds, is a matter for the relevant planning authority.

The Advisory Group on Unfinished Housing Developments considered that the issue of securities and bonds merits further examination, including the use of more liquid securities such as cash deposits coupled to careful phasing of developments in a sequential manner to minimise the working capital impact. The matter remains under active consideration by the National Coordination Committee on Unfinished Housing Developments, which I chair.


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