asked the Minister for the Environment if he is aware of the wide-ranging criticism of the national house building guarantee scheme made recently to the Dublin Solicitors' Bar Association; whether he will amend the scheme accordingly; and, in particular, if he will introduce a scheme which protects house buyers against a builder going bankrupt during the construction of the house.
Ceisteanna—Questions. Oral Answers. - House Building Guarantee Schemes.
14.
I have seen the recent comments of the Dublin Solicitors' Bar Association on the national house building guarantee scheme, which, in addition to some criticisms of the scheme stated that: "It cannot be denied that the scheme is indeed a very welcome step forward".
This scheme was approved by the Government on the basis that it would give satisfaction to new house purchasers and that it would be subject to review after two years. At this stage, I do not propose to suggest any amendment of the scheme, which is operated by the National House Building Guarantee Co. Ltd. My Department are involved in the scheme through the inspection service of houses covered by the guarantee and also by two observers who attend the meetings of the guarantee company.
As regard the final part of the Deputy's question, house builders who apply for registration under the scheme are subject to a searching examination of their financial situation and technical organisation by the guarantee company in order to ensure, as far as possible, that registered builders have the resources and expertise to build houses to acceptable standards and the financial capacity to complete the construction of the houses and honour their obligations to purchasers for the six year guarantee period. It is hoped that this strict examination will obviate the danger of bankrupcy of registered builders before the houses are completed—after which the guarantee company will accept the liabilities of the builder under the scheme. Unless it becomes clear that the scheme is not achieving that objective, I think it is premature to suggest any modifications of the scheme.
I was rather disappointed at the criticism made by the Dublin Solicitors' Bar Association. The scheme is a genuine effort to provide a cheap, speedy and more certain solution to the major problems of house purchasers in relation to the structural stability of their houses than had existed previously. Prior to the introduction of the scheme, purchasers had to pursue their complaints through court action. It has never been claimed that the guarantee scheme is a panacea for all the structural problems of house purchasers. Instead, its primary purpose is to ensure that purchasers are given an assurance of reasonable protection against any serious structural defects which may arise and which would be expensive for the purchasers themselves to rectify.
It is my intention that the scope of the scheme shall be kept under review with a view to introducing any improvements which the experience and resources of the scheme would warrant. I would like to assure Deputies and others that constructive comment on the scheme will always be welcomed by my Department and by the guarantee company.
I am sure everybody agrees that this is a welcome advance in relation to the dilemma of the house purchaser. Arising out of the complaint made, has the Minister any advice to offer to house purchasers which might substantiate or deny the claim made? Has he any advice that might enlighten future house purchasers as to any dangers they may face which he is now aware of as a result of the criticism by the solicitors? Has he anything to suggest to purchasers what they should watch out for?
I should like to point out that the association when they made these comments relied to a large extent on the working paper relating to the liability of the builders, vendors and lessors for the quality and fitness of premises which was published on 6 July 1977. That paper commented on the then draft guarantee scheme. Accordingly, their comments are inaccurate and misleading in relation to several matters. I should like to give the Deputy a few examples. They felt that contract houses would not benefit but all houses built by registered members must be brought into the scheme and this includes houses built under contract for a client. That was inaccurate. It was also stated that the purchaser must show that he had exhausted his remedy against the builder before he could claim from the registration body but rules 25, 26 and 27 of the scheme specify the purchaser's remedies which are dramatically different from that which would be achieved in law. A builder is required to investigate and reply to the guarantee company within 28 days of the receipt of a complaint. Those are some of the inaccuracies. They arose because the criticism was based on a working paper dated 6 July 1977 and not on the actual scheme. I do not think there is any necessity to correct anything but if there is I will certainly do so.
The question is of the unease among people who had what they now feel is a false sense of security in the scheme. Can the Minister categorically say that the guarantees given by him, or intended by him, under the scheme are realisable?
Yes. In view of what the Deputy has said of the worries of some people about these statements, I will circulate a statement pointing out the defects in what has been said.
Will the Minister issue a list of defects in the scheme as it now exists arising from those comments made, which remain valid despite amendments to the scheme? Will he also then amend the scheme to put those defects right?
I did not mean to convey that impression. I meant that I would point out the flaws or the contradictions of the scheme which were contained in the associated statement.
What Deputy Dr. Browne asked was not that, which is an exercise of no great utility. Surely the question is, did they raise valid points as well as ones which are no longer valid because they are out of date, and if so, can we be put on notice of those valid points and weaknesses of the scheme and will they be put right?
I am not aware that they made any valid points that need review at this stage. As I said, within two years we will review the entire scheme.