'New scheme worse for homeowners' - Chartered Engineer
“This new scheme is much worse for homeowners than the previous 90 – 10 scheme and I believe homeowners will realise that in time.”
That was the view of Chartered Engineer, Dr Ambrose McCloskey, who has 50 Donegal clients at various stages of the current Defective Concrete Blocks Grant Scheme.
Mica-affected homeowner, Martin Doherty, also a chartered engineer, described the proposed sliding scale as “a nonsense in respect of individual house construction”.
Both engineers spoke to Donegal Live following last week's announcement of Housing Minister Darragh O'Brien's revised redress scheme.
Dr McCloskey said it appeared, the working group process, although well intentioned, suggested and seemingly agreed numerous changes, to the detriment of homeowners.
He added: “One of the main issues is the introduction of the ‘damage threshold’', which has yet to be defined. I would contend, if a block is tested for strength and is expected to be in the region of 10.0N/mm2 and it tests at, say, circa 5.0N/mm2, it is ‘damaged’, regardless if this damage is visible or not.
“This ’damage’ may not be sufficiently visible, and as such will prevent the homeowners accessing this scheme.
“It will become clear, unless something changes, that a lot of homeowners will not be able to get access to the scheme, whereas they could before.
“If we take the example of a homeowner under the existing scheme in a housing development. They will know that, even if they currently may have relatively minor visible damage, they have high levels of deleterious materials if neighbouring properties have been tested.
“They can engage an engineer and get testing done and if strengths are low and levels of deleterious materials high, they can get remedial works prescribed by their engineer and proceed to fix the house and move on with their lives.
“Under the new scheme, the independent engineers will do an initial building condition assessment, which will detail the visible damage evident.
“This will be submitted to the housing agency engineers for evaluation and this government engineer will then decide if the visible damage is sufficient for the homeowner to be admitted onto the scheme or not. If sufficient damage is not evident then there will be no admission to the scheme.”
According to Martin Doherty, Minister O'Brien referred to an appeals process but gave no information on how it is to be carried out.
Mr Doherty said: “It seems there will be an appeals process. This process will likely be activated when the homeowner does not agree with the proposed remedial action or the proposed grant amount, as decided by the Housing Agency. However, I have heard, the proposal is for the Housing Agency to have the final say on any decision.
“If that is the case, then it is utterly bizarre. I have never seen a situation whereby the result of any appeal is ultimately decided by one of the parties to the appeal! It is ludicrous. This needs further clarification. Who conducts the appeal? What is the appeals process? Who has the final say on any decision?”
Mr Doherty added that the proposed sliding scale was a nonsense in respect of individual house construction.
He explained: “There are no economies of scale for individually priced, one-off houses. The sliding scale is not supported by the Society of Chartered Surveyors of Ireland (SCSI) either.
“It is my opinion the rate should be a 'flat rate' for the entire property and should be fixed at the correct level, to include for demolition. I believe, based on recent prices I have seen, the correct price is in the region of €150 to €180 per square foot. The sliding scale should be abolished.
“Also, why is there a €420,000 cap? There should be no overall cap. Why does the Government require two financial caps? It is understandable that one financial cap should be in place, to ensure that homeowners do not have an unlimited budget and to ensure that the scheme is not abused.
“However, that cap should be the rate per square foot. There is no need for an upper expenditure cap.
“For example, lets assume that a house can be demolished and re-built for €160 per sq ft and the house is 3,500 sq ft. The total cost of this would be €560,000. (this is €160 x 3,500 sq ft).
“Due to the government's upper limit of €420,000, that homeowner will be required to provide €140,000 of their own funding to complete their re-build. That is not 100% redress. That is 75% redress and, in my view, is completely unacceptable.
“The cap per square foot makes sense if it is set at the correct level and there is no upper limit cap. The upper limit financial cap of €420,000 should be abolished as it is not required and serves only to intentionally discriminate against those people with larger homes.”
Dr McCloskey feared house proud homeowners would have to ‘let their house go’ for a number of years to allow it to display sufficient damage to allow access to the scheme.
During this time they would be effectively ‘trapped’ in the house while they are forced to watch it deteriorate around them.
“To me this is mental torture,” he said. “They have successfully campaigned for a barrier (financial) to entry onto the scheme to be removed but it has been replaced with another one, this time one of which they are not in control.
"The Government is going to take a charge on your rental property based on the level of grant aid given. It is rumoured that they may insist that it is rented as social housing to alleviate a housing shortage. In effect you then do not fully own or even control your rental property.
“How will the government take a charge on a property if it is already mortgaged? Will it seek to recoup monies provided under the grant scheme out of rental payments? There may be no equity left in any case. What if you have it rented currently to someone who is not a council tenant, do you evict them in favour of a council tenant?”
Dr McCloskey said homeowners were told no-one would be left behind. However, homeowner representatives first suggested the economy of scale reduction/sliding scale in their own submission in the working group document presented to the Government.
He added the in-house government engineers would have the benefit of not caring about the longevity of any partial fixes, about their Professional Indemnity Insurance or future claims, particularly now with a second entry onto the scheme in the future.
Dr McCloskey said: “There is no doubt that the bare minimum remedials will be recommended and it will be a take it or leave it.
“If the person making the decision on remedial works also holds the purse strings and is not going to be subject to any recourse, then you can be sure that the absolute minimal works will be carried out, works that in my opinion will be insufficient to fully resolve the issues.”
He added: “It is important to understand that there is no option to do your outer leaf now and if there is further deterioration do the inner leaf or internal walls later.
“In addition, Scheme Engineers will not certify remedial works in any case and most definitely if they have not specified them.
“A certificate of remedial works is mentioned and there is no detail around it and no indication of who provides it. It states that this can be relied upon to restore equity and allow conveyancing but I very much doubt that it will have that effect.
“I certainly would not pay close to full market value for any house that has had confirmed deleterious materials in the blocks and a partial fix regardless of what piece of paper was supplied.
“There is no clarity on what specification rebuilds and remedials have to meet. There are also obvious anomalies, such as houses on piles – there is no option to change size there – what if ground beams are tested and show elevated levels of pyrite/pyrrhotite?” he said.
Dr McCloskey said campaign leaders and local politicians did not seem to be seeing the issues at hand and the importance of getting a proper long term fix appeared to have been missed.
“It is clear that the problem is very significant and is affecting the fabric of the housing stock across a significant swathe of the country and the Government reaction has been minimal.
“This is having a major impact on the lives, finances and health of many families and needs to be addressed in a proper manner. This has not happened to date and if they were to wait until the government ‘do the right thing’ this will never happen.
“It is hard to see how this can be progressed adequately under the current proposals. I believe that at some point, and by some means, the Government will have to step up and provide a scheme that provides 100 percent redress for the victims. However, it seems that, for now, they will get away with this current scheme as it stands.”
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