OWNERS OF CELTIC Tiger-era apartments have said government supports that follow a new report on construction defects will need to be substantial in order to help ease their financial burden.
A report from a working group, due to be published shortly, is expected to show that as many as 100,000 apartments or duplexes are affected by fire safety, water ingress and other defects.
The working group report has estimated that total repair costs across the country could reach up to €2.8 billion. Homeowners who have previously spoken to The Journal have received bills of between €15,000 and €20,000, with some complaining they were given a short period of time to come up with large lump sums.
Some who were unable to pay the costs faced legal threats, while others had to take on additional debt to cover contributions to repairs. Owners of these properties are hoping to see support from the government on a similar scale to the pyrite and mica schemes.
Lorraine Carew and her husband Gary decided to downsize their home five years ago so they would not have a mortgage to repay in their retirement. They bought an apartment in the Brú na Sionna development in Shannon, Co Clare.
Around six months after the moved in they were called to a meeting and told by their owner management company (OMC) that they would be required to pay €10,000 towards works to address defects in the complex.
“They said everyone had to pay up or we’d all be out on the street because the fire chief would put an order on the place, they frightened the bejesus out of us and that was around five days before Christmas,” she told The Journal.ie.
All property owners in these kinds of developments are members of owner management companies, which have a board of directors and vote on issues such as the management of these kinds of works.
Although the couple have continued to pay management fees, which Carew said have increased from €1,300 to €2,200 per year over the last five years, they have not paid a contribution towards the repairs.
She said a 17% interest rate has been applied to the original cost which means the couple now owe €28,000. The owner management company sent a summons more than two years ago but no further action has been taken on it since then.
Carew said she and her husband do not have access to this kind of money and could not even afford to pay the level of monthly contributions the OMC had demanded under a proposed repayment arrangement.
“We’re retired, we just don’t have that kind of money, we haven’t a hope in hell,” she said. “I have serious medical issues, I have cirrhosis of the liver from an autoimmune disease and that can be fatal. I don’t have a medical card, I have to pay for everything.”
Gary also suffered a stroke earlier this year, and has had to see a number of specialists since he was released from hospital.
Carew said she believes the stress of their financial situation contributed to his health issues.
“He was an air traffic controller so he was well used to stress, but we’ve never been in a situation like this with debt. It’s a bloody disaster, I never in a million years imagined we’d be in this situation in our retirement owing people money for something that has nothing to do with us,” she said.
Without government assistance with this issue, she said they have no other options and she is concerned they will end up in court. She is concerned that supports from government will be limited and may not apply to people like her and Gary, who cannot pay for the costs.
Another homeowner who spoke to The Journal said the levy at her complex has already increased beyond the initial €15,000, though homeowners were only issued with their first bill earlier this year.
She owns an apartment at the Broadmeadows apartment complex in Swords, Dublin. Initially owners were told they would have to pay €15,000 over three years in three €5,000 instalments.
However, the OMC has since told owners that a further issue with cladding around the building has been identified. At a meeting, she said, owners were told they had three options:
“We were split at the meeting so there was no decision,” the owner who spoke to The Journal said.
“There are people at the meetings who say they refuse to pay and people as well who can’t pay it and I agree I don’t want to pay, but I also don’t want this hanging over us anymore, I want it done, I don’t want us to keep getting these threats about not getting insurance and everything else that comes with it.
“We’re paying €500 in our management fees, which are €1,859 a year, just to pay the insurance premium because of these issues and that’s something that can go up each year when they renew it.”
She and her partner have been saving funds since they found out about the defects and intend to pay the levy, despite their frustration.
“It’s not been easy, it’s really bitter to be putting thousands away that’s to go into something that’s not your fault and that brings no joy,” she said. “We haven’t got enough to cover it yet, we won’t need to take out a loan but we’re still struggling.”
She said a grant scheme from the government would be the most straightforward option as it would ensure the work to make these buildings safe can begin.
“It’s not safe to be here, it’s a lot of stress and we need help,” she said. “People in this country work hard and pay a lot for their homes and it’s hard and then you’re met with these constant slaps. It’s not our fault, we didn’t build these apartments.”
Pat Montague, spokesperson for the Construction Defects Alliance told The Journal that there are a number of supports, including refundable tax credits for owner-occupiers, that the government could put in place to help people.
“The beauty of refundable tax credits is that if a person is outside the tax net – like a retired person – then they get the cash value of that tax credit directly from Revenue,” he said.
“That’s in the short-term. In relation to the final remediation scheme, we want to see grants made to the OMCs directly from Government to pay for works so that people on low incomes aren’t called upon to contribute to remediation works.”
He said the group is hoping that these tax credits, as well as grants to housing associations, will be included in September’s Budget so that critical fire safety works can continue. Montague said there is “a real risk to the health and safety” of people living in these properties if ongoing works are stalled.
“People living in apartments – or even renting apartments to others – with fire defects are understandably stressed about their own safety and that of family members,” he said.
“Fires can and do happen and there has been loss of life already in places like Verdemont [in a 2002 fire in Blanchardstown].”
Montague said decisions over levies have caused divisions within developments and relationships between neighbours have become “extremely fractious as a result”.
He said this has “put a real strain” on those who have paid levies on top of their mortgages, increased service charge and day-to-day expenses
Many owners, he said, have to seek personal loans at 9% to 10% annual interest to cover the costs.
“Where people can’t afford to pay then they face threats of legal action and the stress of getting legal letters and ultimately ending up in court. We know of some people who suffered psychologically as a result of such pressure,” he added.
In a statement, the Department of Housing said the working group is “currently concluding its deliberations in support of the delivery on its extensive terms of reference and working towards finalisation of its report”.
“Once Minister O’Brien receives the report he will give full consideration to its contents before bringing to Government,” it said.
“It is anticipated that the report will be published in the near future.”
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