Averil Discusses Pyrite Remediation Scheme in the Seanad

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Senator Averil Power: I welcome the announcement yesterday of an initial €10 million fund to kick-start the pyrite remediation scheme. It will come as a huge relief to people who have not been able to repair their homes and have waited a long time for a solution to be agreed at a national level. I am disappointed the Government has not been able yet to secure a levy on the industry. I hope the issue will be revisited after the various court cases conclude. It is only right that the industry would pay its fair share rather than the burden falling on the taxpayer.

I commend the Government on moving to put the remediation scheme in place and acknowledge the work the Minister and the former Minister of State, the late Deputy Shane McEntee, did on this issue over recent years to bring about a solution. I am very concerned, however, that the scheme will not provide any compensation for people who have had to repair their homes themselves before now. While some developers carried out pyrite remediation works on the properties they built, others have refused to do so. Many families have had to pay for the work themselves. Some have spent more than €30,000 or €40,000 on tests to identify the extent of the problem, on the physical repair works, on temporary accommodation and on storage while their homes were uninhabitable. That is a huge sum of money for any family to have to pay. As Sandra Lewis of the Pyrite Action Group pointed out yesterday, home owners in their 30s could do this only by re-mortgaging or borrowing to pay for that work. Older couples had to dip into their life savings to fix their homes. It was not that these people could afford to pay for that work. In many cases it was that they simply could not afford not to do it because their homes would have been uninhabitable otherwise. It has taken many years, as the Minister knows, to bring about a solution.

I know that when the Minister was asked yesterday why these homes were not covered by the scheme, he said people should take cases against developers to get the money back, but for many that is not realistic because many developers have gone out of business and been declared bankrupt, and it would be futile for those families to chase somebody from whom they have no realistic opportunity of recovering money.

While I welcome the scheme, I think it is unfair that those families have been excluded. The same families were denied an exemption from the local property tax. I communicated earlier this year with the Minister for Finance, Deputy Noonan, on behalf of several families who, because they had paid for the remediation work themselves before the property tax exemption came in, had to pay the full property tax. They pointed out to me that other families who had the work done a couple of months later would not have to pay the property tax and will now have the works paid for as well.

Will the Minister extend the scheme to provide compensation for people who had no choice but to carry out the work themselves before now? Will there be enough money over the next few years to pay for this work? I understand the Minister indicated yesterday that the €10 million is initial funding and that more is expected over the next two or three years but I did not see a figure for what exactly the Minister intends to be put in place, or indeed if there is any agreement in the Department of Finance about funding for the following years. The Minister is aware that there are some indications that it could cost up to €50 million. The funding announced yesterday seems to be just for the 1,000 homes in the red category, those which are worst affected. It has been estimated that up to 12,500 homes could be affected by pyrite. Will there be enough money to cover everybody who has been affected? When will the necessary legislation to establish the pyrite resolution board be brought before the Oireachtas?

The Leader of the House indicated yesterday that he had spoken to the Minister and that the Minister had indicated that he might bring the Bill to the Seanad first. Can he indicate when that might occur because I understand that the board needs to be put on a statutory footing before it can start to make payments? Have plans to levy the industry been shelved or does the Government intend to revisit the issue after the relevant court cases have concluded?

Deputy Phil Hogan: If I had known that all those questions would be asked I would have been better prepared to answer them. I will try my best.

The Government has approved initial funding of €10 million for a pyrite remediation scheme, with additional funding to be allocated over the next two years from the capital stimulus programme which will be announced in early 2014. The initial phase of the remediation programme will deal with approximately 1,000 houses which it is estimated are in need of immediate repair, and will be delivered under the auspices of the pyrite resolution board. The legislation to put this into effect will be enacted before the end of the year and will commence in the Seanad. The post-2015 funding position will be dealt with having regard to the position at that time and developments in the meantime.

This is not a compensation scheme; it is a scheme to remediate homes which have significant pyritic damage and where the home owner has no other viable means of redress and can establish this to the satisfaction of the pyrite resolution board. The terms of the scheme require prior approval and the scope of the scheme is limited to dwellings which have significant pyritic damage as defined in the Irish Standard 398-1:2013 reactive pyrite in sub-floor hard-core material. As it is a targeted scheme and requires prior approval, it follows that the terms of the scheme cannot be retrospectively applied and this is in line with how schemes generally operate. There is always a cut-off point for new schemes.

While I have stated on many occasions that the State is neither culpable nor liable for the pyrite problem, none the less the Government has, in the public interest, decided that solutions should be provided for that group of home owners whose homes have been significantly damaged by pyritic heave and who have been left with no viable means of redress. The terms of the pyrite remediation scheme, already published in outline by the PRB, will not be affected by the new funding arrangements which will have other advantages and enable the PRB to have the programme implemented in a more direct and efficient manner, now that the taxpayer is funding it directly.

I am acutely aware of the long delay that many affected home owners have had to endure waiting for solutions to the pyrite problems in their homes. The purchase of a home is likely to be the largest single investment most people will make in their lifetime and they have a justifiable expectation that their home will be a place of enjoyment for themselves and their families for many years. I am reforming the building control regime which has left a Celtic tiger scar on many people with problems in their homes, not least in Priory Hall but also with pyrite and in unfinished estates. For home owners affected by pyrite, living in their homes has not turned out to be the enjoyable experience they had hoped for.

I understand how these situations have developed and, once the court cases are finished, I will pursue opportunities and solutions to see how we can extract some financial assistance and redress from the builders and developers who caused this problem. Much remediation of homes has taken place because people had insurance or the developers and builders who were involved in the scheme and raised with them personally the possibility of assistance have dealt directly with certain home owners to reduce the impact. Hundreds of homes have been remediated in this fashion. The new pyrite remediation scheme will help 1,000 householders over the next two years. I am implementing a scheme where my predecessors looked on and did nothing.

Senator Averil Power: The Minister is right that some of the homes that were fixed by the developers were covered by insurance, but as he knows well many were not. Some families who have been in touch with me told me how the insurance covered the building works but would not cover the testing, which costs €3,000, and they were left to pay that bill. Nobody suggests that the State should reimburse people for work that has already been covered by a builder or insurance policy.

 

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