You can still buy a non-compliant home…and it’s all perfectly legal | SI.9 Loopholes

straw man

19th August 2015

In a previous post the “How developers are “adapting” to the new Building Control regulations“ the BRegs Blog outlined some of the ways that the industry, and in particular developers, were adapting SI.9 since its introduction in March 2014.

Earlier this year there was a Joint Oireachtas Committee hearing on the Conveyancing Survey Results undertaken by the Institute of Professional Auctioneers and Valuers (IPAV) see link HERE). Deputy Sean kenny asked about the conveyancing of apartments at Priory Hall and Mr. Keith Anderson (IPAV President) remarked that “there are a lot of lessons to be learned”. This Oireachtas Committee’s focus is on speeding up the transfer of property through e-conveyancing and there was talk of BER Certificates, Property Tax Receipts and other legal papers, but not Completion Certificates.

Why?

Because there is still no legal requirement for a developer to provide a Completion Certificate to a home-buyer.  The technical team at BRegs Blog have tested this loophole in the following three scenarios:

  • An apartment block is complete and Fiona and Bill have secured mortgage approval. There are delays completing a drainage connection. The developer is concerned that if he does not sell he may have to increase the price of the apartments to cover extra finance, utility and security costs. The market is rising and the buyers and their banks are under pressure. The lending institutions involved agree to advance funds on the basis of a letter from the Assigned Certifier. The solicitors for the purchasers accept this reassurance and the apartments are sold. 

  • The Byrnes are downsizing. They put a deposit on a new house in an estate for a cash-sale. The developer offers a discount for an early completion of the deal and, against the advice of their solicitor, the sale is closed before the estate is finished. 

  • QuickBuck Ltd., a speculative developer, sells a block of apartments to FastBuck (Offshore) Inc., a shell company registered abroad. The transfer is carried out less than 14 days before the homes are sold and the new owner is not recorded on the BCMS. Anne buys an apartment but when the drainage backs up she doesn’t know where to turn. The local company didn’t sell her the unit and she has no claim against them.

All of these scenarios are perfectly legal because the regulations require a Completion Certificate to occupy a building, not to sell it.  A BRegs Blog Reader has pointed out that the Building Control Management System (BCMS) Paper** fails to spot this elephant in the room for the next Priory Hall. He explains that when a developer breaks up a multi-unit development for individual sale that there is nothing to stop a home being sold without a Completion Certificate and there is nothing to stop a bank issuing a mortgage on it.  The buyer is no better off than before the introduction of SI.9. 

As he says, “Celtic Tiger Building Control failed catastrophically. Is Paper Tiger Building Control any better?”

** BCMS Completion Certification for Multi-Unit Developments- link: http://www.bregsforum.com/2014/12/18/help-the-bcms-christmas-appeal-certificate-of-completion-crisis/

Others of general interest:

Legal Advice for Multiple Unit Development Completions | Arthur Cox

Help the BCMS Christmas appeal | Certificate of Completion Crisis!

Stardust Remembered | Building Control is about protecting life, not property (Part 1)

Completion Certificates for Multi-unit Housing

5 Posts every builder must read- BC(A)R SI.9

Opinion: Are builders + developers off the hook with BCAR?

Press article: Government promotes developers over self-builders?

New Law Society Guidance Note on BC(A)R SI.9

Developer-Led Costs for a Typical Apartment

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