Paying the price of building free-for-all

Despite changes to building rules, fire safety issues are not exclusively in the past. In one estate in Shannon, owners are being asked to pay for the recklessness, writes Michael Clifford.

Bitter irony attaches to the latest dispatch from those bearing the brunt of the free-for-all construction regime during the building boom.

Owners who earlier this year received the news that their homes were potential fire traps are now being threatened with legal action and ruination.

The owners in the 240-unit estate Bru Na Sionna in Shannon bought homes in good faith. They believed their homes were properly constructed.

Last December the owners in the Bru Na Sionna estate in Shannon were informed there was a major problem with fire safety. Picture: Eamon Ward.

In a functioning democracy, the building of homes is regulated, standards are imposed. It is entirely reasonable to expect that the authorities inspect and monitor standards in order to protect its citizens and residents.

That didn’t happen here during the years of self-regulation when homes were being built like there was no tomorrow. Thousands of those who bought during those illusory good times are now footing the bill for the recklessness.

Bru Na Sionna, a development of 12 blocks, was built between 2005 and 2007. Up to half of the homes in the development qualified for investor tax relief, a device that was in widespread use during the building boom.

Last December the owners in Bru Na Sionna were informed there was a major problem with fire safety. The local fire officer required that remedial works be undertaken in order to avoid a situation whereby he would feel compelled to have the estate evacuated.

The estimated cost for the work is €2.25m. The first tranche that owners were expected to stump up is around half of that. That equates to a cost per unit of between €3,000 and €7,000 depending on the size of the home.

At the management company’s AGM last December, it was agreed by the vast majority of the 63 owners present that the money must be found. The meeting passed a motion that it be included in this year’s service charge as a supplementary payment.

So owners who were accustomed to forking out for a service charge of up to €700 now found they were expected to find up to 20 times that in order to keep their homes.

By February only around 10% had stumped up. An undetermined number have still not paid. Some simply don’t have it. Others want reassurances that the full extent of the defects has been uncovered and that they’re not paying into a black hole.

Now those who haven’t forked up are getting what they regard as threats from their own management company. A letter demanding the money has been dispatched with an attached document that sets out the huge legal costs that would accrue if the owners are brought to court.

Some of the owners have received a letter from the management company’s solicitor that reads: “Unless payment of the outstanding amount is made to us within 14 days of the date of this letter, we anticipate instructions to issue district court proceedings for the debt. Any such proceedings will involve further costs and interest charges for which you will be reliable.”

On one level the approach of the management company is understandable. It wants to get on with the job. The defects will not repair themselves. The money is urgently needed.

However, the aggressive nature of the demand suggests different approaches to the issue are being adopted by investors and owner-occupiers.

Investors tend to be better resourced than many owner-occupiers. They just want their asset fixed and, in all probability, to sell it as soon as is feasible thereafter.

Owner occupiers tend to be less well resourced and have also invested more than spare money into the homes.

Apart from ability to pay, or even capacity to borrow, some of the owners are suspicious that they have not been given the full picture. To that extent, a number of them have retained their own legal representation, even though the management company represents all owners.

Lorraine Carew, who lives in her home in Bru Na Sionna, is unhappy with how the issue has been handled.

“At the AGM I voted for the payments to be put in with the service charge. We all got such a fright at that meeting we were put on the spot. Nobody knew what was coming.

There were proxy votes there from investors in any case. They are in a different situation to us. They may well be able to write all of this off against tax. We can’t do that.

Meanwhile, despite changes to building regulations, issues around fire safety are not exclusively in the past.

There have been three separate reports into fire safety in the last two years. These concerned issues around schools, timber-frame dwellings, and the fallout from the Grenfell Tower tragedy in London.

This morning the Joint Oireachtas Committee on Housing, Planning, and Local Government is conducting hearings into problems around fire safety in homes.

UCD academic Orla Hegarty, who has conducted extensive research in the area, believes that the Government is failing to address the problem today, not to mind cleaning up the mess from the boom years.

She will tell the committee that the review conducted in this country in the wake of Grenfell was extremely narrow and did not address the potential dangers that exist.

“The implications of the catastrophic ‘systems failure’ at Grenfell warrant a much broader review and risk assessment,” according to her opening statement to the committee.

Many issues are technical and evolving, (beyond the remit of this committee and other ad-hoc groups). There is an urgent need to re-establish the statutory Building Regulations Advisory Board which was disbanded in 2012.

The experience so far in this area is that a deaf ear is all that is being offered by Government and State agencies. It’s as if they simply do not want to know the extent of the problems that exist behind the walls thrown up during the building boom. The truth that lurks in there could turn out to be very costly.

In the event of a fire the cost could be far, far greater.

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