FINE GAEL leader Enda Kenny has cautioned against an over-regulation of the property sector following stern comments from the head of NAMA over the reigning in of debt-ridden developers.
Mr Kenny said a hard-handed approach to developers whose debts have been taken over by the toxic loans agency could bring the construction sector to a complete halt.
Excessive demands on developers could frustrate efforts to keep jobs in the sector, he said, giving an example of one developer who had to give over 2,500 pages in documents to NAMA officials. The surprise remarks by the opposition leader came after NAMA’s chief executive Brendan McDonagh told an Oireachtas committee earlier this week that the agency would go after developers “tooth and nail” for debts. The NAMA chief said no effort would be spared recouping debts after the agency began taking over an initial €16 billion in bad loans from five financial institutions last month.
But Mr Kenny warned that the country did not want to go “overboard” in reigning in bust developers. “I do have a concern here that I think the move from having effectively no regulation at all to over-regulation now could bring about a complete standstill to elements of the construction sector in general which would have a devastating effect on any movement on employment in there.”
Mr McDonagh told TDs this week that only one third of loans being taken over by NAMA were performing.
But Mr Kenny defended the loans that were still bringing in money. “I do hope that now that we are stuck with this, that the structure of NAMA is actually capable of dealing with what’s coming into it, because elements of the loans being transferred to NAMA are performing.
“In some of those cases, where personnel or people might want to move onto development, there has to be a system where authorisation has to be given for that so that some movement can take place.” The Fine Gael leader said that on the other end of the scale, for loans under €5 million that did not qualify for NAMA, banks had begun to liquidate those groups.
“This is going to cause serious pressure for other smaller operators who may not have the resources either to put an appeal plan together,” he said.
Speaking in Dublin at a health conference, the party leader gave an example of how many documents one developer had been asked for by NAMA.
He said: “While it is absolutely necessary now to have scrutinised regulation, you don’t want to go overboard where it becomes all regulation and no output.
“I’m aware of one case where two and a half pages of a response are going to have to be given to questions asked by NAMA.”
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