asked the Minister for the Environment if he is aware that prospective house purchasers who have placed deposits with builders have lost their deposits when the builder went bankrupt; and if he will without delay enter into discussions with the CIF with a view to extending the house building guarantee scheme to include full insurance cover to provide for full repayments in such cases; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Loss of House Purchase Deposits.
17.
I am not aware that any purchasers of houses registered under the structural guarantee scheme have lost their deposits because the builders had gone bankrupt. The main purpose of the structural guarantee scheme, which is operated by the National House Building Guarantee Company, is to protect purchasers from the legal and financial burdens that a major structural defect might involve. Nevertheless, house builders who seek registration under the scheme are subject to detailed financial and technical vetting to ensure, as far as possible, that they have the resources and expertise to build to acceptable standards and the financial capacity to complete the construction of their houses and honour their obligations to the purchasers.
The extension of the scheme to provide cover for prospective purchasers in respect of endangered deposits is primarily a matter for the guarantee company and would involve a revision of the rules of the scheme. The on-going operation of the scheme is closely monitored by officials of my Department, who act as observers in the company. I have instructed my officials to pursue the question of protection for deposits and to report to me in due course.
Is the Minister of State saying that he is not aware that some people in this State have contracted to purchase houses and placed deposits and the builders subsequently have gone bankrupt and these people have no hope in hell of getting their money back?
He has just said he does not know.
I want to enlighten the Deputy a little more. There is no evidence that any of the purchasers of the 34,000 houses registered under the scheme since it commenced have lost their deposits because of the builders going bankrupt. No case has been brought to me in respect of a builder going bankrupt.
In view of the recession in the building industry at the moment and of recent unfortunate bankruptcies of house-building companies of which the Minister is undoubtedly aware, would he agree that it is a very serious situation, and that the people who placed the deposits under the present financial law have no rights — or they have rights but they have no prospects at all of getting their money back? They are so far down in the queue in terms of other creditors that in reality if the company goes bankrupt they will not see their deposits. Would the Minister of State accept that it is reasonable for the building industry and his Department to extend some system of insurance bonding that will cover what will be a minority, a very small percentage of cases? For the people concerned it is their one and only chance of getting a house, and if they lose their deposit they can forget about trying to get another one.
That is in the reply.
I gave a comprehensive reply on that, but let me reply to Deputy Quinn. In view of recent events I have asked the NHBGS to have a look at the position and to report to me immediately on it. If there is a case for extending the scheme to cover other matters I shall be very sympathetically disposed.
I thank the Minister of State.
The Minister's reply to Deputy Quinn was that he was not aware of any cases involving bankruptcies. Is he aware of any case involving a company going into either receivership or liquidation?
No. If the Deputy wants that information he should put down a separate question. I think that he knows, and he should not ask me. I am surprised that he has asked me that.
On a point of order, Deputy Quinn's question was quite specific, but the position is that I do not wish to have the Minister slide out of that. I am asking him a specific question on this. Has he been informed of——
It is a separate question. This is regarding a loss when the builder went bankrupt. Anything else is a separate question.
I appreciate that.
Let us get on to Question No. 18.
Deputy Enright asked me a question about another matter which he knows all about. He should not be asking me that question.
In fairness to the House, has the Minister of State had his attention drawn to firms where deposits had been placed and the companies went into either receivership or liquidation?
I answered the question. That is a separate question.
The Minister of State is trying to slither out of answering the question.
I would not slither out of the question. The Deputy is good at slithering.
(Cavan-Monaghan): In order to clarify the position, particularly for the record, Deputy Quinn's question relates to bankruptcies. I do not wish to give a lecture on bankruptcies but everybody knows that individuals become bankrupt and firms go into receivership or into liquidation. Has the Minister been dealing with bankruptcies only or does his reply also cover receiverships and liquidations?
The question does not refer to it at all.
(Cavan-Monaghan): I appreciate that.
I am dealing with it only under the National House Building Guarantee Scheme.
(Cavan-Monaghan): Am I correct in thinking that the Minister is taking the question literally and dealing with bankruptcies only and that if we want information in regard to companies we will have to put down another question framed to include companies going into receivership or into liquidation?
Yes, and it may then be a matter for the Minister for Finance.
The Minister has availed of a very devious way of getting around answering that question.
The Deputy's goose is cooked.