Donegal developer pressuring Council on mica house purchase

A developer was pressuring Donegal County Council to increase the agreed asking price for five mica-affected houses in Inishowen even as negotiations on their sale were nearing completion.

It remains unclear, however, whether the developer, his solicitor, his agent or anyone who provided a valuation on the houses in An Crannla in Buncrana, knew or informed Donegal County Council they contained mica, prior to their purchase in February 2021.

Donegal Live has previously reported Donegal County Council engaged Fastnet Analytical Limited to carry out petrographic assessment [micro-structural examination] of representative samples of blocks extracted from two of the five houses.

On November 9, 2019, the Test Suite A results on 4, An Crannla, highlighted the presence of probable free mica in fines with associated freeze-thaw risk if saturated, as a potential risk.

On November 10, 2019, the Test Suite A results on 5, An Crannla, highlighted the presence of probable free mica in fines with associated freeze-thaw risk if saturated, as a potential risk.

In addition, the Test Suite B: X-Ray Diffraction Analysis of this house confirmed the tested blocks contained deleterious materials, 18.4% muscovite mica and 0.6% pyrite.

Donegal County Council knew in early November 2019 the properties in An Crannla contained mica. However, this fact was not communicated to the Department of Housing and it is unclear whether or not it was communicated to the Council's solicitors.

On December 2, 2020, in a bid to up the asking price, the developer's solicitors sent an email to Donegal County Council's legal representatives which said: “My client is also conscious of the fact that the property market has sufficiently increased in Donegal and he has been informed by his auctioneer that each of those houses, if currently put on the open market would now achieve a price of approximately €6,500.00 more than what was originally provided for the contract per house.

“My client's instructions are that the current contract that Donegal County Council are in receipt of (but have not signed) is not, given all of the above, fit for purpose and that a new contract is needed, recognising that the value of the properties have increased by €6,500.00 per house.”

In addition, a solicitor acting for Donegal County Council warned an Inishowen-based council staff member not to contact the developer's solicitor directly regarding the purchase.

These revelations were contained in a series of emails and letters on the controversial house purchase, obtained by Councillor Frank McBrearty (Independent) from Donegal County Council following a Freedom of Information (FOI) request and seen by Inish Live.

Donegal County Council bought the five houses from developer, Ronald McGrory, for €600,000. The fees for the purchase amounted to €12,000.

The properties, which Council had previously leased from Mr McGrory for 10 years at a cost of €307,000, then rented for one further year for €33,000, were subsequently refurbished at a cost of €68,650, a total of €1,020,650.

Describing the contents of the FOI as “shocking”, Cllr McBrearty said: “Having read all of the correspondence which I have been given, so far, regarding Donegal County Council's purchase of these mica-riddled houses, I believe a completely independent investigation into the matter is now needed, as a matter of urgency.”

“Donegal County Council knew in early November 2019 the properties in An Crannla contained mica. However it has still not confirmed whether this information was communicated to the Department of Housing, which funded the purchase, to Council's own solicitors, or even to the vendor.”

According to the FOI, in May 2020, the Donegal County Council staff member informed Council's solicitor they were going to contact the vendor's solicitor directly to “manage the discussions” around the extension of the lease, which had expired in January 2020.

Replying, the Council's solicitor said: “You should not contact [the vendor's solicitor] directly.”

On September 2, 2020, Mr McGrory, agreed to a short term tenancy agreement to allow Donegal County Council to secure funding to purchase the properties.

In an email to the Donegal County Council staff member, he said: “This agreement will obviously need to start from the end of the now lapsed 10 year tenancy agreement back in January.

“In order to evaluate a fair market rent, I have contacted two letting agents. Inish Lettings informed me of the rent they will achieve for these properties at €650.00 per calendar month for a three-bed semi-detached and €700.00 per calendar month for a three-bed detached.

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“I will also be seeking a clause allowing me to market lease properties anytime throughout this tenancy agreement. Finally and most importantly, if these properties are going to be exposed to another winter without proper maintenance, I will need to get an engineer's report stating what needs to be done to bring these properties up to the condition they were in when handed over to Donegal county Council at the start of our 10 year lease.

“Under the circumstances, I think I am being very accommodating to Donegal County Council.”

However, on September 10, 2020 Mr McGrory forwarded the same staff member an email from his bank, seen by Inish Times, which suggested he was not authorised to enter into any lease agreement with Donegal County Council which expired post April 2021.

He also appeared to threaten to evict the Donegal County Council tenants in An Crannla.

He added: “My back is now to the wall. I need my properties repaired and vacated as soon as possible. Donegal County Council leaves me no choice other than call to my properties and inform the tenants of their illegal occupation and their need to vacate  as soon as possible.

“This is going on for almost a year, it stops now. I have a private investor interested in these five properties or I can rent on the private market for €650.00 semi-detached and €700.00 detached, a total of €3,400.00. With all due respect, I cannot afford to be a charity organisation.”

One month later, on October 19, in a further email to the Donegal county Council staff member, the developer said it looked as if he would be better selling the An Crannla houses on the private market.

He said: “House prices are rising rapidly. But this situation is awkward as there are sitting Donegal County Council tenants with no tenancy agreement.

Things don't seem to be moving with this sale at all. Can you please arrange for someone to call me this week. I am not putting any pressure whatsoever on Donegal County Council to purchase my properties.

“If Donegal County Council wants to purchase, fine, if not, I need my properties returned to me in the same condition I presented them to Donegal County Council, as per our contract. I am getting a lot of interest in these properties.”

Speaking to Donegal Live, Cllr McBrearty said Donegal County Council had told him it was currently carrying out an internal investigation into the acquisition purchase of the five houses at An Crannla.

He added: “I believe the whole episode warrants a public inquiry for the following reasons: firstly, the Council identified these homes as containing deleterious materials and sulphide minerals, yet, it only tested the homes for free muscovite mica, it only tested two of the five, and it did not do a Test Suite B on house number four, only house number 5.

“There was a question mark over the purchase of these five properties right from the start of the process, which need to be answered immediately.

“The reality of this is, more than one million euro of taxpayers' money has been wasted, in my opinion, on five properties that will ultimately have to be demolished, notwithstanding the playing to the gallery at the last Donegal County Council plenary meeting by Inishowen councillors, who should tell the residents of the five properties the truth, that their homes will at some stage, not today or not tomorrow, eventually have to be demolished. Donegal County Council has not done its due diligence on all the problems it has with its housing stock within its own books.

“In my professional opinion, no Donegal County Council staff member should have been corresponding with the vendor. This is a complete conflict of interests when you have a firm of solicitors representing the Council who should have been dealing with all legal matters.”

Cllr McBrearty said the vendor was trying to put pressure on Donegal County Council.

He said: “Council should not have been under any pressure. It knew in October 2019, the vendor was getting a great deal for houses, as its own testing had showed they were riddled with deleterious materials and sulphide minerals.

“The vendor was selling five properties containing deleterious materials and sulphide mineral properties to Donegal County Council at the top market value. It is unbelievable what Donegal County Council did to accommodate him.

“There are similar acquisitions all over the county, where Donegal County Council is not telling elected members what is happening in their areas. An Crannla has brought matters to a head but there are question marks over many developments in this county. Why did Donegal County Council buy these properties?

“It is going to end up paying €2 million of taxpayers money by the time it rebuilds the five An Crannla houses. I would characterise this as incompetence.

“I am calling on Housing Minister Darragh O'Brien to hold an independent investigation into this matter. I will accept those findings. However, at the minute, I am accepting no such thing. It is an Indictment of Donegal County Council that I had to get all of this information through an FOI.”

Donegal Live asked Donegal County Council for a comment on the investigation referred to by Cllr McBrearty. At the time of going to press, no reply had been received.