Council flat purchase scheme to start in 2012

A LONG-PROMISED scheme to allow tenants of local authorities to buy their council flats is expected to be put in place within weeks.

Dublin City Council, the largest housing authority in the State, said it expects the Minister for the Environment to imminently sign a commencement order to allow the scheme to begin.

Tenants of council houses have been buying their homes from some local authorities since the 1930s, with a national scheme for the sale of council houses in place since 1973. However, tenants living in flat complexes have not been eligible to buy.

A tenant-purchase scheme for flats was introduced by Dublin Corporation, now Dublin City Council, in 1988, but was withdrawn after it was found to be unworkable.

The scheme collapsed because of a lack of legislation to deal with issues such as the ownership and maintenance of common areas including stairwells and gardens, and the protection of residents who chose not to buy.

The 2009 Housing Act contained a provision to allow for the sale of flats in estates deemed suitable by local authorities. Only estates in which 65 per cent of tenants agreed to flats being offered for sale and where at least 30 per cent followed through to purchase would be included.

Where the requisite number of purchasers do not sign up within three years, the scheme would lapse for that particular flat complex and all residents would remain local authority tenants.

A commencement order allowing local authorities to begin offering the scheme was due to be signed in 2010. When this date was missed, it was expected to be in place early this year, but it remained unsigned by the time the last government left office.

It is understood that delays in establishing the scheme were associated with the complexities of looking after the common areas. For the scheme to be successful, the residents must establish a management company to run the complex and collect service charges, with some residents assuming tasks as its members/directors.

The method of establishing a purchase price is also understood to have been problematic. As with council houses, buyers are likely to get a percentage discount for each year of their tenancy. However, many proponents have argued that an additional discount should be offered to compensate tenants who have been excluded from buying for so many years.

Dublin City Council which, in addition to having the largest social housing stock in the State, has the greatest proportion of flats of any local authority began assessing its 12,000 flats for sale two years ago.

Assistant city manager Dick Brady said that while a commencement order could be issued within days, the council will have to wait for follow-up documentation from the Department of the Environment, clarifying issues such as the purchase price methodology, before it can decide which estates will be offered the scheme.

Mr Brady said he hoped to establish a pilot scheme: “We would hope to try something towards the middle or the end of 2012. We will start in a limited way, one or maybe two to see what interest there is.”

Take-up is likely to be low in its early years. The number of council house tenants seeking to buy their homes has sharply declined in recent years, in line with the collapse in the property market.

In the Dublin City Council area alone, just 10 tenants bought their homes in 2009, down from 220 in 2006. The council has also raised concerns that while the sale might result in an initial injection of money, ultimately it would be losing its most reliable tenants paying the highest rents.