State may end up paying for building faults

Third parties associated with an apartment development in Dublin built by a company owned by Bernard McNamara and which has now been found to have serious defects could be pursued for damages, a Dáil hearing has been told.

The hearing was also told that problems have been identified with two other apartment complexes in the docklands area.

John Crawley, a financial adviser to the Dublin Docklands Development Authority, said it was most likely that the cost of remedying defects at the Longboat Quay complex would end up "somewhere between the State and the owners of the properties". There are about 300 residents in the complex.

Already the authority, which is being wound down and is in the process of having its remaining assets and liabilities transferred to Dublin City Council, has paid about €1 million after it was discovered the complex had an inadequate fire alarm system. The money was spent on the provision of fire marshals in the apartment complex while a fire alarm system that met required standards was being installed.

Financial liability

An assessment is now being carried out on other remedial work that may be needed. The likely eventual cost of the work, which could include the fire-proofing of individual residential units, is not yet known.

Mr Crawley said the financial liability rested with the developer in the first instance, but “the developer is gone”. Mr McNamara became a bankrupt in the UK after the collapse of the Irish property market. He has since emerged from the process.

Mr Crawley said that “not everyone is gone” and that “behind the scenes” the DDDA was looking at other avenues. Any third party that should have been accountable would be pursued, he said. He said the authority had been involved with six developments in the docklands and that “in most cases” the management companies had carried out surveys of the complexes.

There were two in which there were “issues raised”, with one involving matters to do with fire safety. The management companies were effectively managing the processes involved, he said.

Resolved

It is understood that in one instance fire doors had to be replaced and in another the defects identified are nearing being resolved.

Labour TD Joe Costello queried the fact that Mr Crawley had been appointed to carry out work for the authority in 2013 without the contract having gone to tender. The contract that year was worth €500,000.

Public Accounts Committee chairman John McGuinness queried how the employment embargo in the public service had prevented the authority employing a new finance director when the old one left, leading to it having to buy in the necessary skills.

Acting DDDA chief executive Paul Clegg said the authority had moved from a position of being €200 million in debt to having a closing position of some millions. This had been achieved in a context where the authority had been faced with a "challenging economic and legal environment".