That is by way of explanation of the issues faced by home owners. It is a very expensive problem. Prices quoted to home owners range from €40,000 to €90,000, depending on the size of the property. It is not within the remit of any home owner to come up with those funds in the difficult times in which we find ourselves, yet that is what home owners are faced with.
I wish to show members some pictures sent to us by home owners showing the main effects of pyrite on people's homes. I hope members can make out the bulging of the walls. I believe a television set was pushed away from a locker. The bulging and cracking of walls is a key issue, as is cracking floor slabs which lead to cracking tiles. Some people have said they cannot walk around their houses because of broken tiles and broken floor slabs. Coving is broken up and there is cracking above doors, windows and wall junctions. It is pretty horrific stuff. Quite worryingly, there is cracking in outer walls. People talk about the effect on structural walls but we are looking at the outer walls and the difficulties there because of that. It is an astounding process with which individuals must live day to day.
We have also seen situations where staircases have moved away from walls. I received a photograph yesterday from a person who had to take off the plasterboard from the side of the stairs because it was warping so much that the engineer said the person's six year old child could be in danger as the plasterboard was in danger of falling off and hitting the child. We are hearing some horrific stories.
To add to the dangers and issues we face, this bulging or heaving process we see is not the only process at work. It is not the only issue we face. Sulphates are produced within the infill which are having a direct effect on the structural walls in properties. It may occur over a longer period but the effect of these sulphates is that they begin to eat into and crumble concrete, thereby affecting the structural walls. Some people view these cracks as somewhat cosmetic, but they are major issues which could have serious consequences in the long term for the structure of a property. That needs to be addressed.
To contextualise the pyrite issue, this is not a new phenomena or unique to Ireland, nor has it just surfaced in Ireland. It has appeared in the US, the UK and Canada. Swelling rocks appeared in the US in the 1930s. Throughout the 1970s, properties in Canada were affected. It is reported that medical centres rose by 76 millimetres as a result of the pyrite induced heave, which is phenomenal. There is also the case of the Bell Canada building in Ottowa. In Canada, a committee was set up in 1997 to examine the pyrite issue. A television station did an exposé which revealed that 1,000 properties were affected by pyrite. In 1998 the Government of Quebec put in place a system of funding to repair these properties to livable standards. In the United Kingdom problems with a number of properties were reported in Teeside in 1978 and a wing of the Louise Landau Medical Centre in Cardiff rose by 60 mm between the 1930s and the 1980s. From that perspective, this issue has been ongoing for some time and information on it has been available to the industry.
It is estimated that the pyrite crisis in Ireland potentially affects 20,000 homes. In consultation with engineers, an examination of the level of aggregate sold by quarries which is believed to be in the order of 40 million cu. m suggests the number of affected properties could be as high as 50,000 or 60,000. The quarries from which the material aggregate has been taken tend to sit on the Tober Colleen formation, a horseshoe shaped rock formation stretching from Rush, through north Dublin, east Meath and north Kildare to Edenderry, County Offaly.
The fees for rectifying and repairing houses are between €40,000 and €90,000. People have incurred legal costs amounting to tens of thousands of euro in pursuing quarries or builders. These sums are not within the means of the average homeowner. The 2010 case taken by Menolly Homes against Lagan Group Irish Asphalt did not result in a decision on legal liability, although a fund was put in place as a result. In a case taken this year by James Elliott Construction against the Lagan Group, the latter was deemed liable. As previously noted, HomeBond has denied primary liability for pyrite claims on the basis of this judgment. An appeal is possible, but we will wait to see what happens.
The pyrite action group was formed in May and we are delighted to be invited to address the joint committee. Yesterday we were formally invited to engage with the pyrite panel group, the task force established to address the issue. We welcome the actions of the task force, the joint committee and the Minister for the Environment, Community and Local Government.
Builders and developers are not the only parties to this process. We must also deal with the insurance companies behind them. We are looking to access all of the funds available through insurers, as well as the companies concerned. A number of builders and developers are in liquidation, receivership or NAMA. We are also looking for redress from quarries and their insurers for selling material that was not fit for purpose. The James Elliott Construction ruling referred to the Sale of Goods and Supply of Services Act 1980.
We also look to structural insurers such as HomeBond. From the perspective of homeowners, HomeBond's policies covered major structural defects as set out in the literature received from the company. Given that the pyrite defects are major and structural, homeowners ask why they cannot receive compensation. They believe they were mis-sold cover and that they had little choice in accepting it because lending institutions required it as a precondition to offering mortgages. Arrangements were agreed between HomeBond and the construction companies before anybody even bought a property. There is great frustration and anger about the delays in dealing with the company. It can take months to receive a response to telephone calls, for example. In 2000 the Law Society issued a warning about HomeBond's limited liability and questioned the underinsured nature of its work. It asked that the warning be communicated to all homeowners by lawyers. It does not appear this warning was passed on. In 2003 Deputy Emmet Stagg raised in the Dáil the question of whether HomeBond was underinsured.
Lending institutions are heavily involved in the problem because they continue to own the assets until such time as we finish our mortgage repayments. It is unacceptable for them to stand aside and leave homeowners to fight to have their properties repaired. They have even pursued homeowners for mortgage repayments on these properties. People who are living month to month and desperately trying to meet their mortgage repayments are receiving little support from their lenders. Local authorities also have a responsibility, given their role as building regulation enforcement authorities. The individual engineers, architects and surveyors who were engaged by the various agencies and companies should also have been aware of this issue in order to communicate it to their employers.
On whether this is a civil issue or one in which the Government should be involved, successive Governments let go of the reins of building regulations by allowing self-regulation within the industry. This is one of the major reasons we are currently experiencing problems. There is, therefore, an onus on the Government in this regard. Deputy Terence Flanagan put a question to the then Minister of State at the then Department of the Environment, Heritage and Local Government, former Deputy Michael Finneran, regarding the relationship between his Department and HomeBond. The response implies that the Department received payments in return for providing inspection services for HomeBond as an agency.
The pyrite action group wants the Government to accept that dealing with the pyrite problem is not a civil matter. We want our homes to be fixed in order that we can return to the normal lives we expected to have when we moved into them. We want the Government to take a lead, in which regard we welcome the establishment of the independent working group. The Government should use its legal clout to compel organisations such as HomeBond to divulge information to the independent working group with a view to reaching a resolution. The Government could challenge HomeBond in the courts on behalf of homeowners, many of whom are not in a financial position to pursue a legal case. We also have a strong belief that any system put in place to facilitate the rebuilding and repairing of the many properties affected will fit in well with the Government's retrofitting scheme and provide employment for construction workers. It could be a very positive move.
We ask the joint committee to prioritise this matter and make it a major issue. This could be taken on as one of the key projects the committee is driving forward. I ask members to be our representatives and champions in this process. They should not allow individual home owners to be bullied by organisations. We want the committee to assist us in seeing this process through to a successful resolution. It is obvious that it should engage, where necessary, with the task force in place. Perhaps it might even function as a watchdog, in some respects, by helping us to oversee the work of the independent working group.
We do not want HomeBond to wash its hands of the problem. We would like it to change its legal position and make available the information it has on builders, developers, quarries and insurers. We normally have to spend lots of money on legal fees in order to access the information available. We want HomeBond to be compelled to make that information available to those who need it, including the members of the working group.
We were delighted to be asked to engage with the working group and we want its work to be done in a short timeframe. It has been indicated to us that a report will be forthcoming early in the new year. We also want the group to have the necessary power to compel organisations, individuals and agencies to become involved in the process. As I said, we want them to be compelled to provide the information they hold.
We would like builders, quarries and developers to face up to their responsibilities. We want their insurers to link up and take responsibility. We want them to engage with homeowners, even if they are out of business. We want them to show they are actually working towards this end. We want them to provide funding for repairs, where possible.
On testing for pyrite, we want testing standards to be agreed and pricing processes put in place. Perhaps the working group or the Government might put a system in place to ensure individuals will have testing carried out, where necessary. They should know whether they actually need to carry out testing. People are wondering whether they should spend €2,000, €3,000 or €4,000 on testing if there is a chance that someone will subsequently tell them it was accepted all along that the development had pyrite and testing was, therefore, not needed. We want this to be agreed and in place.
In the case of developers and builders who are with receivers or liquidators, or part of NAMA, we want homeowners to be prioritised above other creditors. There should be an investigation of the possibility of allocating funds to homeowners rather than using them to repay other creditors. We want banks and other lending institutions to increase their awareness of this problem and take their share of the responsibility and burden for it. It has been suggested funding should be made available to homeowners to enable them to rebuild their properties. In such circumstances, the banks could legally pursue the various organisations and parties involved.
We also want clarification from insurance providers. We would like the insurance regulators and the Irish Insurance Federation to investigate the developing insurance issues. Some people's claims have been heightened or increased as a result of pyrite. It has been suggested insurance companies are refusing to offer house insurance to people whose properties have been certified as not being pyrite-free. This is massively discriminatory and we want the matter to be investigated. We also want a health and safety assessment to be carried out. We want a full investigation. I mentioned previously the dangers a potential sulphate attack can have for concrete and the structural walls within properties.
We also want the broader issue of structural damage to be investigated and to look at the issue of fire safety. Individuals have commented on the sticking of doors that occurs as a result of pyrite heave. One woman was trapped in her room for many hours until someone came home and let her out. That is significantly dangerous and cannot be accepted. We want a full health and safety study. We are also concerned about issues regarding the warping of gas pipes, etc., as a result of pyrite heave. Obviously, pipes can come through areas experiencing pyrite heave. There is, therefore, a danger that pipes can break, plaster board can fall and electrical wiring can be damaged. A number of images depicting the effects of pyrite heave are contained in the document received by members of the committee. The document also contains a couple of pages of direct quotes from homeowners. This will give members an idea of the human element of this devastating experience.
We welcome the committee's invitation to share our ideas, thoughts, concerns and expectations. We thank members for giving this most serious and critical problem the attention it needs and deserves. We will be delighted to answer any questions at the appropriate time.
