HOUSE BUILDERS have expressed serious reservations about the draft Nama legislation and have warned that it could have serious implications for the future of the property sector.
The Irish Home Builders’ Association, which is the representative body for house builders, is currently preparing a submission to the Government on the issue.
Its director Hubert Fitzpatrick said builders were concerned about a number of issues in the draft legislation, particularly in relation to the powers of Nama.
The Government proposes that Nama will remove up to €90 billion of performing and underperforming loans from the balance sheets of Irish banks, to encourage them to resume lending again.
Mr Fitzpatrick said it was understandable that the new legislation should wish to guard against those who might try to impede the effective operation of Nama. “However, the draft Bill envisages that Nama will have powers so extensive, over-reaching and beyond challenge that individual rights may be seriously impeded,” he said.
He also said there was a need for a package of interim measures to make credit available across the economy, until Nama was up and running.
“Since the announcement of Nama in April, the banks have been effectively closed for business to all sectors,” Mr Fitzpatrick said.
“Many bank loans will not be transferred to Nama for up to six to nine months. This lapse of time will bring much uncertainty and lack of clarity in relation to funding requirements for these businesses, jeopardising employment and local economic activity.”
Mr Fitzpatrick said a solution was urgently needed to facilitate the working capital requirements of many builders and contractors.
“It is imperative that the Bill should also include provision for interim measures to be put in place to make credit available according to normal criteria pending the transfer of loans to Nama.”
Mr Fitzpatrick said the popular description of Nama as a “bad bank” was not accurate as it would also be taking over fully performing loans and profitable assets in prime locations.
The Irish Home Builders’ Association is now consulting with its members before it finalises a submission to the Government in response to the draft legislation.
When he announced the draft legislation in July, Minister for Finance Brian Lenihan said he was open to any constructive amendments to the draft Bill put forward by the Opposition when the Bill would be debated in the Dáil on September 16th.
On that day, the Minister will tell the Dáil how much Nama will pay when it buys the loans at a discount from banks. He has already said the agency would acquire development loans from the banks at a significant discount.
