Friday, 20 November 2009

When new homes go bad

THE PEOPLE living in a handful of newly-built houses in a small estate in Dublin were distinctly unimpressed when sewage started backing up into their homes earlier this year. It became clear that the problem wasn’t isolated to a single house or two so the residents employed an engineer to investigate the problem.

He found that the pipes laid by the builder and connected to Dublin City Council’s main sewer network were of poor quality and not fit for the purpose. In the normal course of events, the council would have taken responsibility for rectifying the problem but this is not a normal situation as the developer had never had his work approved by the authorities. As it effectively had no planning permission, the council washed its hands of the situation.

The cost of re-laying the pipes will run to around €100,000, or €8,000 per house, and while the residents can take an action against the builder, a solicitor familiar with the case told The Irish Times that such action may be futile. It will take two years to get to court, the pipes have to be fixed immediately and in all likelihood the developer, whose financial situation is already perilous, may have gone out of business long before their case is heard.

The problem faced by Linda McGrath isn’t as severe but is still annoying. She bought a newly built apartment in August 2006 and, after a couple of months, the wall mounted lights stopped working.

She contacted the developer who passed the problem onto the electrical contractors who wired the house. They carried out some minor repairs and replaced some fittings but the lights still didn’t work so they advised the couple to contact the ESB. The ESB determined the wiring was faulty, information which McGrath relayed to the electricians who were supposed to come back to do a full electrical analysis within a few weeks. “We never heard from them again,” she says.

The couple now has no hall lights, no bedroom lights and the children’s room “has one light which only lights when you play with the switch nicely”. She wants to know what happens in situations “where there is an evident problem and I have handed over a substantial amount of cash for this apartment. Where do I turn to get this problem solved?” Is it the developers, the ESB, the electricians or the Register of Electrical Contractors of Ireland? “If you have a receipt you can go to the shop and get your goods replaced or fixed or refunded but, when it’s a property, who do you call?”

One avenue which is of little use to McGrath is the HomeBond new-build insurance scheme which covers housebuyers against serious structural damage up to €200,000 for 10 years after the house is built. HomeBond may, however, come to the aid of Sean Murphy (not his real name) but he has been waiting nearly a year for a major problem to be addressed by the organisation.

He bought a newly-built apartment in Clonee four years ago and, almost as soon as he moved in, cracks appeared on the walls. He contacted the developer who assured him they were minor “settling in cracks” and to give it six months. A year later he contacted the developer who insisted the problem was cosmetic. He re-filled them but they reappeared.

Murphy decided to sell up two years ago and quickly found a buyer. The survey carried out on behalf of the buyer revealed that the cracks were structural so the sale fell through. A second sale has also fallen through at the last minute after a different surveyor uncovered the structural damage.

The developer who built the apartment has gone out of business and Murphy has been dealing with HomeBond since early this year. He says contacting the insurer and getting it to expedite the repair process is difficult as it insists on sending repeated letters to the builder – although they have shut down – and the letters are being delivered to an empty office.

HomeBond was changed last year and operates on two tiers – one covers houses built after October 2008 and another houses built before then. Once a complaint is made about a house or apartment which falls into the former category, a technical inspector is sent to examine the problem. If they conclude that work needs to be done and that it falls within the parameters of the policy, a payment is issued.

Making claims on properties registered with HomeBond prior to October 2008 is not as easy and those doing so have first to deal wi\th the builder who must investigate the complaint and reply within a reasonable time (there is no clear guidance as to what’s considered reasonable).

If they don’t take action consumers can contact HomeBond with a claim – but if Murphy’s experience is anything to go by the process can be slow.

These consumers struggling with poorly constructed properties thrown up at speed during the boom years are stories of our time.

While many of the houses and apartments built during the good times are good quality, others are falling to bits and the builders who built them are reluctant to address the issues as they are struggling financially and cannot afford the outlay on properties they assumed were off their books.

Last year the National Consumer Agency (NCA) published an extensive report on the Irish home construction industry. It examined costs to consumers and the protections available when buying or upgrading a property and reported that 21 per cent of people surveyed said they had experienced problems. The main problems reported were poor workmanship (57 per cent) and failure to complete to a schedule. Some 17 per cent of people complained about work being started but not completed while 13 per cent referred to quality of materials issues.

The average cost of putting problems right in recently built houses and apartments was €1,911. Worryingly, the report found that consumers who had recently bought houses would, as yet, be unaware of many of the problems, including those relating to wall insulation and foundations.

It found that consumers were “poorly protected” in legislation and made 25 recommendations, including a statutory system of certificates of compliance for contractors and subcontractors, a simple contract for small domestic works and better dispute-resolution procedures.

The chief executive of the NCA Ann Fitzgerald told The Irish Times earlier this week that consumers often have more legal protections when they “buy a kettle compared with buying a house”. She said there had been “significant progress” since the publication of its report last November but accepted that more work needed to be done to improve consumer protections.

The NCA had a nominated representative on the Building Regulations Advisory Board and there had been “major improvements in the level of information available to consumers via the new Royal Institute of Architects of Ireland website and the new HomeBond package”.

She also said the RIAI had confirmed to the NCA that it was writing a professional indemnity clause into its new standard contract and said a number of professional bodies were working on the development of a standard contract which the NCA would review in due course.

Fitzgerald said the NCA was working on an alternative dispute resolution process, covering the wider area of consumer redress. She said this would include elements which would help people resolving problems with properties without having to take an expensive route through the courts.

Irish Times

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