Officials flagged concerns about €2.5bn defective apartments remediation scheme

Officials flagged serious concerns about a proposal under the Government’s €2.5 billion defective apartment scheme to repay people who had already covered the costs of remediating their properties.

The Irish Times has established that the Department of Public Expenditure and Reform and the Department of Finance made clear their opposition to this element of the plan, which also covers works in progress.

However, senior sources said Coalition leaders and Minister for Housing Darragh O’Brien insisted that the issue – known as retrospection – should be included in the scheme, which will be drawn up following a Government decision Wednesday.

[ Defective apartments: State to fund repairs for as many as 100,000 Celtic Tiger-era homes under Cabinet plans ]

The focus will now shift to drafting the legislation, with multiple sources saying that the devil will be in the detail. The Government decision was enthusiastically welcomed by groups representing the owners of defective apartments.

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“We’re taking nothing for granted here at all,” said Construction Defects Alliance spokesman Pat Montague, citing resistance that he believes has been present within the Civil Service to the scheme and its retrospective nature.

Civil servants were concerned that there was no reason to support owners who had already paid to repair fire safety and structural problems in their Celtic Tiger-era properties, and warned politicians that retrospection had never been included in similar schemes. They feared setting a precedent – with some flatly of the belief that the retrospective payments should not go ahead, given it could create a significant liability for the State due to the expense of the scheme.

“The milk has been spilt and mopped up. Why would you pay for it again? But the political view of the world is different,” one source said.

Mr O’Brien and the Taoiseach said after yesterday’s Cabinet meeting that the issue has been agreed. The leaders of the three Coalition parties believed it would be politically toxic not to include these apartment owners in the scheme, sources said.

Senior Coalition sources emphasised that there would be conditionality attached to the retrospective works which would protect the taxpayer – with an emphasis on problems which are rooted in a building defect that occurred due to shoddy workmanship when an apartment was built, rather than poor maintenance.

Mr Montague told The Irish Times it was significant that the “political side” of Government had decided there would be a retrospective element in the scheme “in the face of considerable opposition at official level”.