Property Council to sue State, banks over collapse

AN ORGANISATION representing property investors and developers is to take a class action in the High Court against the Government, the Financial Regulator and the banks over their roles in the collapse of the property market.

The Irish Property Council (IPC) is to outline its plans today for the court proceedings which will set out to apportion responsibility for the collapse.

It says the ruination of the property market has been caused “by the reckless lending of our banks, lack of regulation by our Government and the disregard of prudent advice on fiscal policy by the Government in power”.

The council is to invite developers, house purchasers or investors who are now “total casualties of the collapse” to put forward their names for the court action and a claim for compensation.

The IPC was set up last year to provide support for small builders, developers and investors who have run into financial difficulties following the bursting of the property bubble.

“Property owners are being ruthlessly scapegoated by Government and the banks through the court without any responsibility in this catastrophe.

“The IPC requires a willing plaintiff that can be supported in a court action. We are not looking to get the borrower off.

“We are simply seeking fairness in how that responsibility is shared and a recognition that responsibility exists within the Irish State.”

The IPC’s legal adviser, Paddy Fitzgerald of Ferry solicitors, said the reality was that the IPC would have to succeed.

“We can’t continue in this vein because “everyone involved in commercial property and experiencing negative equity will have a judgment and there will be nobody left to continue the business.”

About 10 per cent of the country’s 790,000 mortgage holders are either more than 90 days in arrears or have negotiated revised payment terms with their banks.

Many of the additional 100,000 residential investors have also fallen behind with their repayments and are facing an increase in mortgage interest charges in the near future.

Others are also threatened with the ending of interest-only repayments arrangements with their banks.