# Apartment Owners' Network submission for a MUD Defects Remediation Scheme



## Brendan Burgess (27 Apr 2022)

The Apartment Owners' Network has made the attached submission to the Independent Working Group on Defective Homes.

I have remedied any defects in my own house at my own expense. I didn't ask the taxpayer to pay for them. 

Brendan


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## Threadser (27 Apr 2022)

Brendan Burgess said:


> The Apartment Owners' Network has made the attached submission to the Independent Working Group on Defective Homes.
> 
> I have remedied any defects in my own house at my own expense. I didn't ask the taxpayer to pay for them.
> 
> Brendan


Many apartment owners have been left with the legacy of poor regulation and building standards. I am Director of a management company of an apartment complex in West Dublin. Significant issues highlighted in recent surveyors report regarding roofs, ventilation and fire safety . Most of these issues have significant health and safety implications. Owners may not be able to afford to remedy these issues in addition to paying high management fees. Are we going to wait for a Grenfell towers scenario when likely costs for government would be far higher than preventative work now?


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## Baby boomer (27 Apr 2022)

Brendan Burgess said:


> ...
> I have remedied any defects in my own house at my own expense. I didn't ask the taxpayer to pay for them.
> 
> Brendan


How foolish of you Brendan!  This is the People's Democratic Republic of Ireland.  The State is responsible for every bad thing that happens everyone and must immediately establish a no-fault, no-questions-asked, gold-plated, top of the range redress scheme to fully compensate them, and pay their lawyers too, even if it's not the state's fault at all.  In recent weeks, we've actually extended this principle to cover cases where there was no actual harm but people were "at risk of harm" as exemplified by the South Kerry CAMHS fiasco.  

In this socialist utopia, taxpayers will happily foot these unlimitable bills with a smile on their cheery little faces, while re-electing the clowns that continue to bribe Paul with Peter's money.  



Threadser said:


> Many apartment owners have been left with the legacy of poor regulation and building standards.


Is the time honoured caveat emptor too harsh a principle?  



Threadser said:


> Owners may not be able to afford to remedy these issues in addition to paying high management fees. Are we going to wait for a Grenfell towers scenario when likely costs for government would be far higher than preventative work now?


I'm not entirely without sympathy.  But if the state (aka Brendan and I and every other taxpayer) is expected to pick up the tab, surely we're entitled to more than surly pyrite/mica style demands for our cash.  How about an equity share in the property, proportional to the rectification cost, redeemable when it's sold?  Or an interest free loan on similar terms?  Or an insurance based scheme where ALL developments would pay into a fund which could then be drawn upon in the event of long-term problems emerging?   Or a combination of some of the above?  Surely that's a more moral solution than expecting a buckshee handout from your neighbours.  

I see no reason why one set of citizens should be out of pocket to preserve the property interests of another set of citizens, free gratis without any reciprocation.


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## THE_Chris (27 Apr 2022)

The Journal actually have a reasonably balanced article about all of this today - rather than their usual hysteria.









						Homeowners affected by Celtic Tiger defects face 'frightening' legal threats over repair bills
					

Repairing fire safety defects can cost up to €20,000 and some homeowners also have to pay to fix leaks and damp issues.




					www.thejournal.ie
				




The very simple solution is that the builders should pay and fix. But we all know that won't happen.


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## Threadser (27 Apr 2022)

Baby boomer said:


> Is the time honoured caveat emptor too harsh a principle?


Apartment owners would have  had the resources to have a surveyor produce a report for their own apartment but would have trusted the "professionals" who signed off on the common areas in the block.



THE_Chris said:


> The very simple solution is that the builders should pay and fix. But we all know that won't happen.




 I agree that the original developers and builders should be responsible for resolving the issues but many of these were facilitated with large debt write offs though NAMA and are now up and running again with new companies. Owners are unable to seek redress for their shoddy workmanship.


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## Threadser (27 Apr 2022)

Baby boomer said:


> But if the state (aka Brendan and I and every other taxpayer) is expected to pick up the tab,


Apartment owners are taxpayers too. Many bought an apartment because they did not have the resources to afford a house at the time. It is a dreadful situation to find themselves faced with large bills because of the incompetence of those who should have done their jobs properly.


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## T McGibney (27 Apr 2022)

A house or apartment is an asset only when you're selling it. Throughout the period that you own it, it is a liability that unless properly maintained will deteriorate and cause endless problems and further costs. This includes roofs, ventilation and fire safety issues.


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## elcato (27 Apr 2022)

Fire safety and standards are changing all the time for apartments. This is something, to a point, that is within the power of governments. In general homeowners don't get fire safety checks annually like the apartment dwellers. I'm still paying extra fees annually to make sure the Fire standards are adhered to in our building. They were built in the late 80s and conformed to FS at that time.


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## Baby boomer (27 Apr 2022)

Threadser said:


> Apartment owners are taxpayers too. Many bought an apartment because they did not have the resources to afford a house at the time. It is a dreadful situation to find themselves faced with large bills because of the incompetence of those who should have done their jobs properly.


It is.  But it's not my fault.  Why should I pick up the tab?  And if I did pick up the tab, should I not acquire an equity interest of some sort in the property?  It's completely unreasonable to expect me to pay to enhance someone else's asset and see the benefit go entirely to that person.


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## Brendan Burgess (27 Apr 2022)

I don't think we the taxpayers should pay for it. Just as the taxpayers shouldn't pay if I find dry rot in my house. 

But the Multi Unit Developments are practically very difficult to fix.   The state should maybe lend each apartment owner the €30k or whatever it is to fix the house but secure it on the property.  And when the property is sold, repay the loan.

It should also be the same for the mica houses. 

But if we are bailing out the mica houses in Donegal we should also bail out the apartments in Dublin.

Brendan


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## NoRegretsCoyote (27 Apr 2022)

Brendan Burgess said:


> But the Multi Unit Developments are practically very difficult to fix. The state should maybe lend each apartment owner the €30k or whatever it is to fix the house but secure it on the property. And when the property is sold, repay the loan.


I don't understand why this approach isn't standard, including for the Mica schemes. Owner gets a portable, interest-free loan for life subject to a cap of maybe 50%. State recoups some of its outlay (eventually). Owner still has an incentive to maintain the property as there will be residual value for family members to inherit.

Is there some legal impediment to the state doing so? Or just bureaucratic inertia? It's a much better idea than free money.


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## T McGibney (27 Apr 2022)

Brendan Burgess said:


> The state should maybe lend each apartment owner the €30k or whatever it is to fix the house but secure it on the property.  And when the property is sold, repay the loan.
> 
> It should also be the same for the mica houses.





NoRegretsCoyote said:


> I don't understand why this approach isn't standard, including for the Mica schemes. Owner gets a portable, interest-free loan for life subject to a cap of maybe 50%. State recoups some of its outlay (eventually). Owner still has an incentive to maintain the property as there will be residual value for family members to inherit.
> 
> Is there some legal impediment to the state doing so? Or just bureaucratic inertia? It's a much better idea than free money.


Agree 100%. In general, every bailout should require some quid-pro-quo from its beneficiaries.


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## NoRegretsCoyote (27 Apr 2022)

T McGibney said:


> Agree 100%. In general, every bailout should require some quid-pro-quo from its beneficiaries.


The Mica redress scheme is extraordinary in that you will have landlords with zero mortgage getting a better product than they already own for which they'll be able to charge a higher rent. For free, from the state!

I'm sympathetic to owner occupiers with mortgages but for the rest it is an absolutely extraordinary policy.


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## Threadser (27 Apr 2022)

I think the big issue here is the fact that there have been no consequences for those who are responsible for supplying faulty materials and carrying out shoddy workmanship. Not alone was there no consequences but they were in fact rewarded by being given huge debt write offs. Meanwhile those who fell victim to these practises are, through no fault of their own, being presented with large bills for remediation.


Baby boomer said:


> It's completely unreasonable to expect me to pay to enhance someone else's asset and see the benefit go entirely to that person.


The remediation work will hopefully make these properties safe and liveable. Yes this is a "benefit" but it  should also be a reasonable expectation for a buyer of any new property that has been built in the last 20 years.


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## Brendan Burgess (27 Apr 2022)

Threadser said:


> I think the big issue here is the fact that there have been no consequences for those who are responsible for supplying faulty materials and carrying out shoddy workmanship.



If they are still around, they will be sued.

The problem is that many of the builders went bust.

We do have bankruptcy and insolvency legislation to allow people get a fresh start. And that doesn't not having to pay bank loans. It means all their creditors, including consumers lose out.

Edit: Posts on NAMA have been move to this thread: 





						Key Post - A simple guide to NAMA  and the banking crisis
					

This post is aimed at people who don’t have the time or the inclination to study NAMA in detail but who do want to understand the basics of the present crisis. You should get a grasp of the issues by reading the first post.  You can go into further detail by reading later posts or following the...



					www.askaboutmoney.com
				




Brendan


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## NoRegretsCoyote (28 Apr 2022)

Threadser said:


> I am in receipt of a recent surveyors report on one of them and it is an absolute scandal.


I agree the building regulations and liability regime in place at the time were a disgrace. I understand they have been tightened up since for new builds.


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## Leo (28 Apr 2022)

Threadser said:


> Meanwhile those who fell victim to these practises are, through no fault of their own, being presented with large bills for remediation.


That's the nature of property and caveat emptor, you have more consumer protection buying a toaster. However, it's still astonishing how little homework many prospective purchasers prior to committing massive amounts of money on property while signing contracts confirming they understand the risks.


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## NoRegretsCoyote (28 Apr 2022)

Leo said:


> However, it's still astonishing how little homework many prospective purchasers prior to committing massive amounts of money on property while signing contracts confirming they understand the risks.


How exactly would the median home-buyer assess, ex ante, the build quality of a new-build apartment? 

I would have absolutely zero clue and even a surveyor hired would rely on a visual inspect of a near-finished product.


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## Threadser (28 Apr 2022)

Leo said:


> However, it's still astonishing how little homework many prospective purchasers prior to committing massive amounts of money on property while signing contracts confirming they understand the risks.


Buyers of an apartment would not be in a position themselves to conduct a hire a surveyor to conduct a buildings survey for the whole block. They would (foolishly in hindsight) have trusted the professionals whose job it was to ensure proper ventilation, fire safety and adequate roof structures to comply with government building regulations. They were badly let down by those who were paid handsomely for their "professional advice".


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## Leo (28 Apr 2022)

NoRegretsCoyote said:


> How exactly would the median home-buyer assess, ex ante, the build quality of a new-build apartment?
> 
> I would have absolutely zero clue and even a surveyor hired would rely on a visual inspect of a near-finished product.


Hire someone competent who knows what to look for and what questions to ask, and make sure appropriate indemnities were in place. There was plenty of chat at the time that corners were being cut in some developments, but in the scramble to get on the property ladder lots of people just didn't want to know.


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## NoRegretsCoyote (28 Apr 2022)

Leo said:


> Hire *someone competent who knows what to look for* and what questions to ask


That's so vague as to be almost useless. An architect? An engineer? Who are they supposed to ask? Who would even grant them site access?

To provide an analogy. I'm thinking of buying a new car at the moment. I'm not going to get a mechanic to give it a once-over like I would with a used car before purchase. Even if I did, all the mechanic would say is: "it's a new car. Any defects will only emerge in time".


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## Threadser (28 Apr 2022)

NoRegretsCoyote said:


> That's so vague as to be almost useless. An architect? An engineer? Who are they supposed to ask? Who would even grant them site access?


I agree, a prospective buyer of a new apartment would be unlikely to be in a position to engage any of these professionals for the entire development. Building regulations at the time should have protected them.


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## Leo (28 Apr 2022)

NoRegretsCoyote said:


> That's so vague as to be almost useless. An architect? An engineer? Who are they supposed to ask? Who would even grant them site access?


Why would you hire an architect to assess structural or regulatory compliance issues? A suitably qualified engineer will recognise some of the warning signs that not all is in order. If they don't know what to ask and who to ask, get someone else. The vendor via the agent always facilitate access.



NoRegretsCoyote said:


> To provide an analogy. I'm thinking of buying a new car at the moment. I'm not going to get a mechanic to give it a once-over like I would with a used car before purchase. Even if I did, all the mechanic would say is: "it's a new car. Any defects will only emerge in time".


It's a poor analogy. There is significant consumer protections in law governing fitness for purpose, accuracy of description, and outlining the responsibilities of a vendor in the event of a fault. Anyone purchasing a property really should understand that there are no such protections in place, and it is your responsibility to do your homework to the best of your ability, and that you alone bear the risk of issues that such homework fails to uncover

It doesn't matter what kind of property you are buying, apartment or house, you can never 100% be certain that all is in order and there are no defects. Being an apartment does not significantly alter that, you can't inspect foundations or structural elements in a bungalow either.


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## Brendan Burgess (28 Apr 2022)

Hi Leo

When I bought my semi-d 20 years ago, the surveyor did a detailed study of the inside and outside. 

But it must be different for a development  of  100 apartments in  10 blocks of 10. 

They can look at one apartment and say it looks fine.  But would  10 different surveyors have to look at the whole lot? 

Brendan


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## Leo (28 Apr 2022)

Brendan Burgess said:


> But it must be different for a development of 100 apartments in 10 blocks of 10.


It's really similar in that neither can inspect what isn't visible to the naked eye. Apartment developments follow a pattern, so there would be limited value in seeing inside multiple units.

It should also be noted that some of the fire safety issues that are being raised at the moment are not defects that could have been identified at the time, but are down to apartment car parks failing to meet current, more onerous standards. I know of one development where the underground car park has been closed for months now as Dublin Fire Brigade have refused to sign-off on the basis of failing to meet the requirements of the Fire Services Act even though they had previously done so in the lifetime of the current legislation.


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## Brendan Burgess (28 Apr 2022)

Leo said:


> It should also be noted that some of the fire safety issues that are being raised at the moment are not defects that could have been identified at the time



I was wondering about that. 

So the apartments were built in compliance with all then current standards. 

So the developer or the architect or the engineer is not to blame. 

Brendan


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## Threadser (28 Apr 2022)

Brendan Burgess said:


> So the apartments were built in compliance with all then current standards.
> 
> So the developer or the architect or the engineer is not to blame.


Untrue. In our estate there were many shortcomings identified by the Surveyors recently that should have been identified before the initial build was signed off. Just one example would be that the flat roofs on all 10 blocks should have been coated with solar reflective paint which would have extended their lifespan but this was never done. This is just one example from a very long list.....


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## Brendan Burgess (28 Apr 2022)

Leo said:


> that some of the fire safety issues



Threadser

Leo made it quite clear that he was referring to some of the issues and not all of the issues.

Brendan


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## Threadser (28 Apr 2022)

Brendan Burgess said:


> Leo made it quite clear that he was referring to some of the issues and not all of the issues.


Apologies for the misunderstanding, I was referring to all the issues, not just fire safety. It is true of course that fire safety legislation is regularly updated and it isn't within the remit of this scheme to ensure that all OMCs are up to date with current legislation. This is an emotive topic for me because I have recently been presented with the evidence of all the shortcomings in the initial build here. Luckily there has been no loss of life as a result of the negligence but we have been lucky in that regard and will work now to resolve as many of the issues as we can.


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## Leo (29 Apr 2022)

Brendan Burgess said:


> So the apartments were built in compliance with all then current standards.
> 
> So the developer or the architect or the engineer is not to blame.


Correct, and they would have been passing inspections for a number of years since construction. 

The Fire Brigade have authority to inspect both commercial and residential developments. Unlike the Local Authorities, it seems they have the power to require property owners to bring buildings up to current standards and are not bound by the regulations prevailing at the time of build. They have the power to issue a Fire Safety Notice prohibiting the use of some or all of the development until potential issues are addressed to their liking. 

I've seen the notice and some of the correspondence between DFB and the management agents of one development. DFB have issued such a prohibition notice for an underground car park that they signed-off 4 years ago. According to the management agent, they have refused to explain the specific concerns that caused them to issue the notice or to enter dialogue with fire safety consultants the agent has hired to assess and resolve.


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## Happydays2020 (1 May 2022)

This is a much needed discussion. I am in an apartment whereby there has been a dispute ongoing for 10 years. The build issues were identified and reported within 2 years. Where there was an insurance policy that is not yet paying out but is taking a case to the high court against various companies involved in the building of the development. Unfortunately the construction company liquidated the entity responsible and NAMA are the receivers for a decade.  About half a million will be spent on legal fees by owners and I fully expect to foot a 50k bill for replacing two windows.  A landlord can write this off against tax, an owner occupier cannot. 

Meanwhile the construction company and the developer are still involved in State contracts/partnerships. 

If Ireland is serious about apartment living then it needs to sort this out through regulation and assisting with redress. Even a low interest loan would help things - I don’t want a state hand out but the people responsible should pay and I know I am not responsible.


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## Calico (11 May 2022)

Have to say, I think the view that this is tough luck on apartment owners or that they are negligent/responsible in some way is very harsh.

Realistically there was no way someone buying an apartment could know or find out about building defects or fire safety issues. 

Buying an apartment is not the same as buying a house and I think it's a bit disingenuous to say it is.

I know it's not the government's fault, but in my view there is a responsibility on the government to protect citizens from this sort of thing. 

We're potentially talking about thousands and thousands of people, not just one or two. 

What if we took a similar attitude when the banks went bust? Sorry depositors, you didn't do your due diligence.....tough luck. 

Or the tracker mortgage scandal where you could actually probably make a good case that people took a punt that went wrong.

Not that a bailout should be the end of it.....the government can/should recoup the cost from the building industry by way of a of profit levy.


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## Leo (12 May 2022)

Calico said:


> Have to say, I think the view that this is tough luck on apartment owners or that they are negligent/responsible in some way is very harsh.


I believe the view is that it is tough on anyone, regardless of property type. That's the very essence of caveat emptor!


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## elcato (12 May 2022)

Calico said:


> Not that a bailout should be the end of it.....the government can/should recoup the cost from the building industry by way of a of profit levy.


In fairness, the governement make a tidy sum from everyone involved in the process which is why I would side on the apartment owners on this.


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## T McGibney (12 May 2022)

Calico said:


> Not that a bailout should be the end of it.....the government can/should recoup the cost from the building industry by way of a of profit levy.


How does yet another levy work in a market where the building industry is already failing abysmally to build enough houses and apartments, and cost inflation is already out of control?


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## lff12 (16 May 2022)

That's fair - one of the issues around state funding of remediation schemes is that it is paid for by taxpayers, who increasingly are made up of a large body of tenants who don't own properties, pay high rents and are now effectively being asked to bail out the property owning class who they don't belong to. Levying a tax on the construction, banking and insurance sector however would go a long way towards covering this.


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## lff12 (16 May 2022)

Leo said:


> It's really similar in that neither can inspect what isn't visible to the naked eye. Apartment developments follow a pattern, so there would be limited value in seeing inside multiple units.
> 
> It should also be noted that some of the fire safety issues that are being raised at the moment are not defects that could have been identified at the time, but are down to apartment car parks failing to meet current, more onerous standards. I know of one development where the underground car park has been closed for months now as Dublin Fire Brigade have refused to sign-off on the basis of failing to meet the requirements of the Fire Services Act even though they had previously done so in the lifetime of the current legislation.


One of the issues has been where only a subset of apartments actually materially fails fire safety standards but an entire block's insurance is voided by the fact.


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## NoRegretsCoyote (16 May 2022)

lff12 said:


> That's fair - one of the issues around state funding of remediation schemes is that it is paid for by taxpayers, who increasingly are made up of a large body of tenants who don't own properties, pay high rents and are now effectively being asked to bail out the property owning class who they don't belong to. *Levying a tax on the construction, banking and insurance sector however would go a long way towards covering this.*


Insurance sector is already levied, and it's been done with the banks as well. 

All of these issues can be dealt with via low-interest loans from the state redeemable on disposal of the asset. It's very hard to hide a dwelling, and impossible to transfer ownership without the state consenting.

This is  really obvious policy and I have no idea why the cash handout model is preferred.


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## lff12 (23 May 2022)

NoRegretsCoyote said:


> Insurance sector is already levied, and it's been done with the banks as well.
> 
> All of these issues can be dealt with via low-interest loans from the state redeemable on disposal of the asset. It's very hard to hide a dwelling, and impossible to transfer ownership without the state consenting.
> 
> This is  really obvious policy and I have no idea why the cash handout model is preferred.


I understand what you are trying to say, but there is considerable fury at the very idea that buyers should have to pay for these loans. (Even though it would seem that many impacted by fire issues on smaller scales are paying out of their own pockets for remediation).


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## L_earner (22 Jul 2022)

Calico said:


> Realistically there was no way someone buying an apartment could know or find out about building defects or fire safety issues.


That is true in our case. We hired a good engineer who surveyed everything he could about our apartment and fifteen years later it is as good as the day we bought it, as he predicted.
However, a structural fault allowed serious water ingress into the frame of the apartment block, causing substantial degradation of the concrete beams that hold the building up in several places. Our apartment is immediately over one of the affected beams, which has to be replaced. Estimates of cost are coming in. The repair bill will wipe out the sinking fund, and then some, forcing the management company to borrow heavily.
If this were our semi-D house, we would have responsibility for repairing it, and I would not expect any tax payer to bail us out. But this is different. We did everything right and our apartment is at risk and the OMC will be asking everybody to cough up a lot of money to pay it back. I would gladly welcome an interest free loan for the OMC, so that we can all contribute to the price of this over the years.



Calico said:


> I know it's not the government's fault, but in my view there is a responsibility on the government to protect citizens from this sort of thing.


I am no expert in this area but it was my understanding that the Government sets building regulations and enforces them. The builder of our apartment block got away with negligent building practices that made substantial water ingress inevitable. If the Government had sufficient oversight of the industry, there would have been less chance of this happening. I feel let down by the Government. Because of their bad past decisions, my biggest investment is at risk. I think the tax payer, whose Government messed up, have a moral duty to pay something in cases like ours, to reduce the amount we have to pay back.


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## cremeegg (23 Jul 2022)

Calico said:


> Buying an apartment is not the same as buying a house and I think it's a bit disingenuous to say it is.


Agreed, but most people do not understand this. And if they are bailed out without cost to them, people will continue to underestimate the potential issues with apartments.


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## cremeegg (23 Jul 2022)

Where on earth is Homebond ?

And where ever it is, who let it escape there.

HomeBond is the leading provider of structural defect cover for new homes in the Republic of Ireland since 1978. According to its website. https://www.homebond.ie/about_us/


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## THE_Chris (11 Aug 2022)

From what I've heard, Homebond is useless for all of this. Not sure exactly why though.


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## Leo (11 Aug 2022)

THE_Chris said:


> From what I've heard, Homebond is useless for all of this. Not sure exactly why though.


Many threads on here over the years detailing Homebond abdicating responsibility for all manner of defects people assumed would be covered.


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## THE_Chris (22 Oct 2022)

Apartment owners vote against proposal they pay €68,000 each to fix fire safety defects
					

‘People didn’t vote ‘no’ because they don’t want the work to be done. We voted ‘no’ because we don’t have the money,’ said one owner.




					www.thejournal.ie
				




Another example. Yes, its the journal, but still. Each apartment was to pay €68,000 to fix fire safety issues, with €15,000 due by the end of 2022. They voted against this at the OMC meeting. Quite what happens next is unknown. The total cost is €16 million.

To be fair, this is an unsurmountable sum for most people - either this years installment or the full whack. So what is the solution for these people? It's the same every time, building defects that now result in costs that people can't afford, so the place will close or have fire wardens that just spread a higher cost over a longer period.


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## THE_Chris (24 Nov 2022)

RTE have picked up on this now, with some additional information. Good to see that all of this is being reported, but the fact that it is being reported doesn't materially change anything. These people will still need a solution.









						Pay up or risk evacuation: A €68k fire safety nightmare
					

Homeowners are facing huge bills to repair their Dublin building's fire defects. RTÉ Investigates asks how it happened.




					www.rte.ie
				




It'll be interesting to see the Prime Time debate on it tonight.


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