Written answers

Wednesday, 24 June 2015

Department of Finance

NAMA Debtor Agreements

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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132. To ask the Minister for Finance the circumstances under which the National Asset Management Agency, an insolvency officeholder appointed by the agency or an agency service provider may agree a method of disposal of assets with a debtor or insolvency practitioner with more limited marketing or reporting requirements than those laid out in its guidance note for disposal of real estate assets by the agency's debtors and insolvency officeholders; and if he will make a statement on the matter. [25315/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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NAMA has a widely stated policy of openly marketing the sale of all assets by its debtors and insolvency practitioners wherever feasible. In certain circumstances there are impediments to this, primarily legal considerations.

NAMA's Guidance Note for Disposal of Real Estate Assets is available on the NAMA website at .

Section 4.1.1 of NAMA's Guidance Note for Disposal of Real Estate Assets states the circumstances in which the sale of a real estate asset by a NAMA debtor or receiver may be concluded without open marketing, as set out as follows:

(a) Where specific written advice (either legal or professional) has been obtained by NAMA in relation to the disposal of the Real Estate Asset recommending that open marketing should not be pursued for commercial or legal reasons giving rise to material risks. Such Real Estate Assets will be offered at the appraised market value, confirmed by way of independent valuation report received by NAMA;

(b) Where a government entity or State/Semi-State body has approached NAMA, or any of its subsidiaries, to purchase a Real Estate Asset for legitimate reasons in the public interest;

(c) Where the Real Estate Asset is the subject of a compulsory purchase order (CPO) by a State Body or Local Authority. The Debtor should be professionally advised with the adviser entering into a duty of care arrangement with NAMA;

(d) In instances where NAMA via NARPS is acquiring assets for Social Housing from NAMA Debtors or Insolvency Office Holders, noting that an independent market valuation report must exist.

Where any exceptions are proposed for legal or commercial reasons, prior approval of the CEO and Head of Asset Recovery/Head of Asset Management of NAMA must be obtained and the market value must be confirmed by way of independent valuation.

Per existing NAMA Board policy, NAMA will engage proactively with Government Departments, local authorities, State Agencies and other appropriate bodies and entities in relation to their possible need for land/properties in the public interest (e.g. social housing, schools, water and other infrastructure, health centres, hospitals, community and amenity facilities, cemeteries, warehouse space). Such assets will be offered at the appraised market value, confirmed by way of independent valuation, to such bodies for four weeks prior to open market offering. Any agreed sales to such entities will be subject to contract where such contract must be negotiated and agreed within a four week period from the date the entity expressed an interest in purchasing the asset. The closing date in the contract for sale should be no more than 90 days from the date of the contract.

The Deputy may wish to refer to the C&AG's third special report on NAMA, Special Report on NAMA's Progress, 2010-2012, which was published in May 2014 and is available on the NAMA website, .  As part of the review, the C&AG examined the disposal process for 144 properties with gross proceeds of €1 billion and concluded:

"Overall, the examination found evidence that almost all property disposals reviewed had been sold through an open competitive process, or with testing of disposal prices against market valuation.  This provides reasonable assurance that the prices obtained were the best on offer in the market at the time a property was sold".

As Minister I am not involved in day-to-day decisions in respect of how NAMA manages its portfolio as these are a matter for the Board of NAMA through its delegated authorities.

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