Risky housing sale outrageous but legal

Documents furnished to a buyer of a unit at the questionable Longboat Quay complex did not reveal the extent of existing issues, writes Michael Clifford

Risky housing sale outrageous but legal

The dream

The bidding was wrapped up within a minute. The man with the gavel, Gary Murphy, kicked off proceedings with an opening €220,000. This, he pointed out, was a two-bedroom apartment on the first floor of a development in the much desired Dublin docklands. Anybody with a nose for property is aware of the location’s proximity to the south docks, an area teaming with young techies who work for the American multinationals based there.

“Nice location,” Mr Murphy noted. It took just a few bids to climb to the reserve price of €250,000.

But that was it. There was no competition to ratchet up the price further. “Once, twice….” And bang! Down came the gavel. “Your number, sir,” Mr Murphy asked of the successful bidder at the back of the room. 901 came the reply.

So went the brief auction of another property bought at Allsop’s most recent event on September 10 at the RDS in Dublin. Except this property had a certain history and status of which the new owner was completely unaware. The property was 305 Longboat Quay, a unit in a development that has for over a year been the subject of major controversy over fire safety and poor construction work, as first reported in the Irish Examiner. Just last month, Dublin Fire Brigade wrote to representatives for the development threatening that if remedial work was not started immediately, it would apply to have the 600 residents evacuated.

The new owner — we’ll call him 901 because he doesn’t want to be identified — ventured down to view the property within hours of acquiring it. At Longboat Quay, he encountered, by pure chance, another owner. This woman filled him in on a reality that had him reeling in shock. He had no idea of the quagmire into which he had just walked.

His now fellow owner suggested he contact the reporter in the Irish Examiner who had been covering the story. Later that evening, 901 did just that. He wanted to know all the detail of what exactly was going on? Why had nobody told him? “I bought this on behalf of my father,” he said. “I didn’t get a chance to view it, but I saw it on the paper and went through all the legal documents (he has legal training himself) and thought it was fine.” If 901 had gone to one of the viewings at the property he would have learned nothing of the development’s problems. The Irish Examiner has spoken to a prospective buyer who viewed the apartment and made inquiries as to any issues around fire safety. She was told by the person in charge of the viewing that he had no information about such issues.

The future of the Longboat Quay apartment complex is uncertain while residents await remedial worksto address and resolve the problems.
The future of the Longboat Quay apartment complex is uncertain while residents await remedial worksto address and resolve the problems.

901 checked the whole thing out and accepts that “the documentation is completely watertight”. Yet, he is despairing. As of now, his first aim is to reverse the purchase. “It’s outrageous that they can allow this to go up for sale,” he says. Outrageous, possibly. But entirely legal. For the history and sale of 305 Longboat Quay is a salutary example of how precarious things can be for citizens intent on purchasing a home at a time when some homes built during the building boom hide devastating secrets.

The reality

Longboat Quay was built in 2006 on Sir John Rogerson’s Quay by developer Bernard McNamara.

Apartment 305 was purchased in the initial phase of sales in February 2007. The selling bumf at the time said that the development “has captured the public imagination not least because of its superb waterfront location, adjacent to the new Civic Square and within walking distance of all the city’s amenities. It also excels in design, specification, finishes and landscaping.” A couple based in Kiiliney, Co Dublin, bought Apartment No 305 for €411,162. This was regarded as good value. The family of then president Mary McAleese purchased two units in the development at the time for just under 1.2 million.

The couple who bought 305 took out a mortgage with Bank of Scotland. The British bank began selling mortgages in this jurisdiction in 2000, looking for a piece of the action that was the great Irish building boom.

A Longboat Quay apartment where issues could not be detected through merely visual inspections.
A Longboat Quay apartment where issues could not be detected through merely visual inspections.

After the crash the Killiney couple were among the many who suddenly found themselves overstretched. At some stage over the following years, a receiver was appointed to dispose of some of the couple’s assets. As the recession took hold, Bank of Scotland rethought its strategy and began to pull out. The bank set about selling off its mortgages. The loan for 305 was flogged to an outfit called Tanager, which advertises itself as “an owner of residential and buy-to-let mortgages in Ireland”.

It has an office in Muff, Co Donegal.

The receiver for the property in question, appointed by Tanager, is Tom Kavanagh, one of the leading insolvency practitioners in the country. This is the background to how 305 Longboat Quay came to be sold in Allsops on September 10.

During the last year, as the mortgage was being passed around, and receivers got stuck into selling off the property, major flaws were discovered in the Longboat Quay development.

In May 2014, a fire engineer working for another receiver did some exploratory work which revealed that the building was in a dangerous state. He felt obliged to contact Dublin Fire Brigade. Routine fire safety measures had not been adhered to in the construction phase. Problems with fire walls, smoke vents, and deficient ceilings were all identified.

Already by that point, some owners in the development were having problems with damp on walls and ceilings. It was now obvious that the construction of Longboat Quay fell far short of both regulations and design criteria.

The first issue to be addressed was a totally inadequate fire alarm system. An upgraded system was installed over six months during which time fire marshals were employed to patrol the building 24/7, acting as walking, talking fire alarms. That work was completed in February this year, but the major remedial work has yet to begin. The delay in getting that started is what prompted Dublin Fire Brigade to threaten in August to apply for a fire safety order which would trigger the evacuation of the development.

Terms and conditions apply

Anybody interested in buying 305 would not have been aware of the extent of these problems without looking hard through the documents. Among the thick file of legal and sale documents made available through Allsops, there were a number of certificates of questionable integrity in light of all that has emerged in the last year.

For instance, the file contains fire safety certificates issued when Longboat Quay was built. Typical of the assertions in the certificates is the following: “We confirm that the fire safety precautions incorporated in the building complex were assessed and inspected by the undersigned in the period August 2003 to January 2007.” This was signed by a fire consultant retained by the developer. Elsewhere, there is a letter dated October 12, 2006, from a mechanical and electrical contractor confirming that “the smoke alarm and detection system has been designed and installed in accordance with IS3218”. Both the fire safety certificate and the installation of the original fire alarm systems have been exposed as containing serious flaws. Yet anybody perusing the certificates would be left with the impression that everything was in order and safe. The documentation also contains a cert for the new fire alarm system completed in February this year.

Then there is the architect’s opinion, which passed for regulation when Longboat Quay was being built. The architect, Eugen Van Jaarsveld, was employed by the developer, Bernard McNamara, through one of McNamara’s vehicles, Gendsong. Mr Van Jaarsveld left this country in 2011. He is currently employed in Ghana.

In his certificate of compliance, Mr Van Jaarsveld asserts that his opinion is “issued solely for providing evidence for title purposes for the compliance of relevant buildings or works.” He goes on: “It should be noted that a site inspection service was not provided.” Yet, despite that he gave the whole thing the nod based on a “visual inspection of the buildings and works”. This was – and still is – entirely legal. A visual inspection, however, is sometimes hardly worth the effort.

In Longboat Quay most of the problems were only discovered when somebody began to conduct investigations of what lay behind the walls and ceilings. But during the frantic building boom, these visual inspections — usually by professionals employed by the builder — were the basis on which the State accepted that the construction of homes was safe and sound.

Allsop sold one of the Longboat Quay apartments last week to a man who was unaware of the extent of the issues raised in relation fire safety and construction standards.
Allsop sold one of the Longboat Quay apartments last week to a man who was unaware of the extent of the issues raised in relation fire safety and construction standards.

The question as to whether the certificates for Longboat Quay should still be relevant today, in light of all that has been discovered, is not addressed.

There are references to the recent discoveries in the documentation if you look hard enough, but the prominence and extent of these references would hardly flash a warning.

On Page 13 of the Conditions of Sale document states: “The purchaser purchases the subject property with knowledge of the recent concerns raised by a fire consultant in relation to the apartment complex of which the subject property forms part.” It goes on to say that a new alarm system has been installed as phase 1 of the work which is now completed while “phase 2 is ongoing”.

And that’s the extent of the briefing on the problems. Also included is a statement suggesting there isn’t much else to know. “The vendor has not received any further notice or information in relation to these issues, apart from the information that has been furnished. No rejection, requisition, rejoinder or enquiry shall be raised in this regard.”

The above references hardly provide a full picture. The “fire consultant” discovered issues 16 months ago, and since then there has been further explorations by both the fire brigade and a consultant retained by the management company which have exposed further major flaws.

While Phase 1 (the new alarm system) is complete, as stated, a reader may conclude that Phase 2, the major works, are underway. In reality, the funding for this work has not been secured. The management company has acknowledged that apartment owners are likely to be liable for some of the cost at least.

The only reference to any future liability is contained in another of the sale documents, titled Replies to Multi Development Act Enquries.

Listed among t enquiries is a relevant question. Is the vendor or the OMC (operating management company) aware of any possible claims against the funds of the OMC? The reply is: “Yes, defects report identifies significant areas of concern.”

Eyes front

All of the professionals involved in the sale, from receivers, to solicitors, to auctioneers, fulfilled their legal duty. All can reasonably claim to have been ignorant of the extent of the problems, even though the issue was covered in the media. The vendor could claim likewise, particularly as the unit was unoccupied and it consisted of assets that were handed over to a receiver.

But what about the citizens looking to buy a home? Are their rights what they should be? The fallout from the years of frantic building are going to continue to be felt. Citizens should be entitled to a lot more protection.

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