Dáil Éireann Debate, Wednesday - 21 April 2021
669. Deputy Cian O'Callaghan asked the Minister for Housing, Local Government and Heritage the action he will take to deal with the problem of bonds lodged by developers with local authorities expiring before the works in public areas in developments are completed in accordance with the planning permission; and if he will make a statement on the matter. [18190/21]
Amharc ar fhreagraPlanning Circular Letter PL 11/2013, which issued to planning authorities on 20 June 2013, set out key requirements to be adhered to by planning authorities in relation to the attaching of conditions to planning permissions regarding planning securities, including development bonds, for the satisfactory completion of residential housing developments.
The Circular Letter advised that planning securities could take a number of forms, including -
- a cash deposit lodged in a bank account of the local authority, which can be accessed by the local authority in certain circumstances;
- an insurance bond lodged with a local authority that can be “called in” or encashed, again in certain predefined circumstances; or
- such other liquid asset as may be agreed between a developer and the relevant local authority, including a legal charge over property or some element of the development site, as long as this is acceptable to the planning authority.
The Circular Letter stated that it is a matter for the relevant planning authority to decide what type of security to require as part of the terms of the planning permission from the above list. The Circular Letter further advised planning authorities that in accepting the use of bonds, they should include a condition in the planning permission requiring the bond provider to notify the planning authority giving sufficient notice (not less 1 year) of a bond's due expiry, and a final 28 day notice period regarding expiration of the bond. With the above condition in place, there is an onus on the bond provider/insurer to notify the planning authority that a bond is about to expire, as well as on the developer to ensure that a security in compliance with the relevant planning condition is in place at all times.
It was further stated in the Circular Letter that, notwithstanding the expiration of a particular bond, the obligation under planning legislation on the developer to provide security under the relevant planning permission condition shall remain and that on expiration of a bond, it will be necessary for developers to provide adequate replacement.
In light of ongoing difficulties encountered with developers regarding the use of development bonds, the County and City Management Association (CCMA) issued a standardised template for development bonds to all planning authorities in 2018, with a recommendation that it be used as best practice. This template includes a clause that requires a developer to provide six months’ notice to the local authority prior the expiration of a bond, with a further clause stating that failure to provide this notice would result in the bond remaining in full force until such time as the six-month notice is given. In this way, a bond cannot expire without the knowledge of the local authority concerned. The CCMA further advised planning authorities that a "time limited bond" should only be accepted as a last resort if a cash or a "time unlimited bond" is not feasible.
My Department has recently been further engaging with planning authorities regarding the issue of development bonds and the difficulties faced in accessing these bonds in the event of the non-completion of a development or other default on the part of a developer, thereby inhibiting the satisfactory completion of residential developments and their taking in charge by the relevant local authority or management company, as appropriate. My Department has requested, and awaits, further information on the experiences of planning authorities in this regard with a view to forming a view on what further measures might be taken to improve matters.
