Levy on builders of defective Celtic Tiger-era homes 'not feasible', report finds

Report says the group understands it is 'not feasible retrospectively to impose a penalty on the individual firms that were responsible for the defects' and that levying across the entire industry may impact firms that had no fault in the defects.

A levy to raise billions of euros to fix defective Celtic Tiger-era homes should be considered, similar to the banking and insurance levies, a new report has found.

With a looming bill of up to €2.8bn for remediation works, a levy on the construction industry had been touted as a source of funding.

However, a new report from a Government working group that examined widespread defects in boom-era homes has found a levy on the construction industry would "require careful policy, legal and public scrutiny".

The working group, set up by Housing Minister Darragh O'Brien, has published its report and has found fire safety, water ingress, and structural issues are present in 80% of apartments built between 1991 and 2013. That equates to between 62,500 and 110,00 units.

The report says the group understands it is "not feasible retrospectively to impose a penalty on the individual firms that were responsible for the defects" and that levying across the entire industry may impact firms that had no fault in the defects.

The report finds defects were caused by "defective design, defective or faulty workmanship, defective materials, or any combination of these at the time of construction" in contravention of building regulations and makes a number of recommendations to ensure the mistakes are not repeated.

Defects widespread

It found the defects in purpose-built apartments and duplexes, constructed between 1991 and 2013, are a widespread in every local authority area.

The report says works that have already begun should be included in the scheme to avoid a "moral hazard" from necessary safety works being delayed or deferred to ensure they fall under schemes.

It says the "common thread" in the origins of the defects "seems to be an overall lack of understanding of the complexities of constructing these buildings..., inadequate supervision and inspection, together with a lack of experience and a lack of coordination of relevant construction information.

On the process of remediation, the report recommends:

• A central organisation should provide advice and support services to owners’ management companies (OMCs) and apartment owners on the remedial works process;
• The bodies representing the various building professionals should establish registers of members who are willing and competent to provide remediation services;
• Where necessary, interim measures should be carried out, to enable continued use of the building;On the subject of the discovery and identification of defects, it recommends:
• Owners’ management companies (OMCs) should engage a building professional from the proposed registers;
• A statutory register should be established to facilitate the identification of owners’ management companies.

It adds that any programme to address defects should be "planned, prioritised and adequately resourced over a suitable period of time".