All Dublin council flats to be offered for sale to tenants

Dublin City Council plans to offer its stock of almost 16,500 council flats, valued at about €3 billion, for sale to its tenants.

The Dublin city manager, Mr John Fitzgerald, confirmed yesterday that a legal solution had been found to an anomaly which allows tenants of council houses to buy out their homes, while tenants of the flats complexes are not permitted to do so.

Proposals to sell council flats to tenants in the late 1980s and early 1990s were dropped because of legal difficulties with assigning control of public areas to private property companies, as is the case in most private flats complexes.

Now, however, the council has developed a solution to the difficulty, whereby it will remain as the management company.

This option allows the council to continue to fulfil its statutory duties to its tenants in maintaining public areas, while owner-occupiers would pay the council a management fee, as happens in the private sector.

The scheme provides for the flats to be sold to the tenants at a discount of up to 30 per cent on the market value or 3 per cent per year of occupation. These arrangements are similar to those applying to council houses.

The scheme also provides for a "clawback" in certain situations in the event of a subsequent sale. The "clawback" would arise in the event of a heavily discounted flat being sold within a period of about five years and would mean the council getting a share of the profits.

The council's share would be on a sliding scale based on the number of years the tenant kept the flat after the sale, and the discount applied.

The scheme has been submitted to the Minister for the Environment, Mr Cullen, whose approval is required.

The money accruing from the sale of the council flats will go to the central Exchequer and not to the city council itself.

A take-up of 33 per cent - or about 5,500 flats - would be expected to raise at least €1 billion for the Exchequer.

Regarding a timescale, Mr Fitzgerald said he hoped to be in a position "to begin to move on this in the autumn".

He told The Irish Times the motivation behind the sale of the flats was not financial, but one of social stability.

"A lot of Government money has been spent on the flats over the years and it hasn't really provided stability in the way that council houses which have become owner occupied have provided stability."

He added: "I have always considered it unfair that council flat tenants could not buy out their own homes while council house tenants could do so, and it is in the flats complexes where we need that stability."