Tuesday, 26 February 2019
Department of Housing, Planning, and Local Government
Tenant Purchase Scheme Administration
637. To ask the Minister for Housing, Planning, and Local Government the reason local authority apartment tenants are barred from availing of the tenant purchase scheme; and if he will make a statement on the matter. [9142/19]
Part 4 of the Housing (Miscellaneous Provisions) Act 2009 and the associated regulations, the Housing (Tenant Purchase of Apartments) Regulations 2011, introduced the scheme for Tenant Purchase of local authority apartments, which came into operation on 1 January 2012 and remains in place. A local authority may, as a reserved function and following at least 65% support at a tenant plebiscite, designate for tenant purchase an apartment complex comprising at least 5 apartments, which does not contain apartments designed for elderly persons or retail units and which meets statutory criteria.
Under Section 50 of the 2009 Act, “apartment complex” is defined as “land on which there stands erected a building or buildings, comprising or together comprising not less than 5 apartments (but not including any community apartment) and the common areas, structures, works and services”.
The local authority must consult the tenants in relation to a proposal to designate an apartment complex and must hold a plebiscite on the proposal. If at least 65% of the tenants vote in favour of the proposal, then the elected members of the local authority may designate the complex for tenant purchase. However, under Section 54 of the 2009 Act, where an apartment has been sold by the local authority under section 90 of the Housing Act 1966, whether before or after the coming into operation of this scheme, the apartment shall not be included for the purposes of the tenant plebiscite.
Prior to sale, the authority will transfer ownership of the complex to an apartment owners’ management company established under the Companies Acts, in which the authority is, in most cases, the sole member. The apartments would then be sold to tenant applicants at discounts of 40% - 60%, depending on their level of income. An incremental purchase charge is placed on the property by the authority that withers away over a period related to the level of discount received, subject to compliance with the conditions of the sale, notably that a member of the purchaser’s household must live in the apartment for the duration of the charged period and that the purchaser pays the management company annual charges in respect of the apartment.
The membership of the management company associated with the apartment transfers from the authority to the tenant purchaser. The authority will continue to let apartments in the complex in the normal way to tenants who do not wish to purchase and participate in the affairs of the management company as owners of those apartments.
The tenant purchaser of an apartment has all the normal responsibilities of a dwelling owner, including decorating, maintaining and repairing the apartment, and insuring its contents, at his or her own expense. In addition, by virtue of his or her membership of the management company, the apartment owner is part-owner of the common areas, etc., with an obligation to play a part in managing and maintaining them, including the payment of the management company annual charges levied on the apartment, attending and participating in meetings of the company, and serving as a director of the company from time to time.