Taxpayers may be hit with €100k bill for making safe derelict North Cork hotel

The boarded-up former Central Hotel, Mallow, after it was damaged by fire on March 21 last. The building is now in the hands of a new owner.
Picture: Dan Linehan

Taxpayers could be hit with a six-figure bill due to an anomaly in the law which prevents local authorities from recouping money for making derelict sites safe if they are in the ownership of financial institutions.

This has emerged after it was confirmed Cork County Council was unable to recover approximately €100,000 it spent on making an arson-damaged former hotel safe.

The council spent the money securing the former Central Hotel in Mallow. 

At the time a financial institution had secured ownership of it through the courts as a 'preferential creditor' due to mortgage arrears.

Under the terms of the Land and Conveyancing Act 2009, financial institutions are able to sell on such properties and local authorities cannot recoup the money spent making them safe.

County council senior executive officer for the North Cork area, Mary Hayes, confirmed to the Irish Examiner the financial loss.

It occurred prior to yet another fire at the vacant hotel on March 21 last. 

Getting rid of derelict buildings was essential to the recovery of Mallow. It is a high priority for the businesspeople of Mallow and the Chamber have met to discuss it

The building is now in the hands of a new owner and the council is in discussion with that person in regard to its future.

Ms Hayes recently discovered the anomaly in the 2009 Act as the council tried to pursue costs it previously incurred when it was in the ownership of the financial institution.

One of the most senior officials in the local authority, director of services Niall Healy, has said Derelict Sites legislation is fundamentally flawed and needed a major overhaul by the government.

The difficulties with the cumbersome legislation have been highlighted at recent meetings of the Kanturk/Mallow Municipal District Council and the Cobh Municipal District Council.

The Central Hotel, Mallow, was the scene of another fire in 2011. Picture: John Doheny

Councillors have been anxious to get derelict sites in towns and villages refurbished and used for social housing. 

However, the level of annual penalties on owners of such sites are so tiny they either pay up with no difficulty or don't bother as they know it will cost the council more to employ a debt collection agency to pursue them.

At the Kanturk/Mallow Municipal meeting, Labour councillor James Kennedy said getting rid of such buildings was essential to the recovery of Mallow.

“It is a high priority for the businesspeople of Mallow and the Chamber have met to discuss it,” he said.

Fine Gael councillor Cllr Liam Madden said councillors were “getting stick” from the people in the town about the high level of dereliction.

Ms Hayes told them that unfortunately, the current legislation didn't provide a quick-fix solution for the council or other local authorities.

The same issue was raised at a meeting of the Cobh Municipal District Council by Labour councillor Cathal Rasmussen, He was provided with a list of current properties on the Derelict Sites register by the municipal district officer, Padraig Lynch.

Mr Lynch also provided him with a list of more properties which are to be added to it shortly. He also informed councillors that while officials are doing everything they can to eradicate dereliction it is a cumbersome process.