“Risky housing sale outrageous but legal” | Longboat Quay

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22 September 2015

In the Examiner article “Risky housing sale outrageous but legal” 21 September 2015, Michael Clifford outlines how one apartment in the Longboat Quay development in Dublin could be sold just last week, completely within the law, to an unsuspecting purchaser seemingly unaware of the serious fire safety issues currently surrounding the development. The author examines the sales documentation attached to a recent Allsop auction of a unit in the complex that did not reveal the extent of problems in the McNamara built development. For a more detailed history of Longboat Quay see a previous post here.

The most outrageous aspect to the following story is that an identical situation can result under BC(A)R SI.9, Building Control Regulations introduced in 2014. Under SI.9 there is nothing to preclude a developer engaging a registered professional as an employee to act as a certifier (same as Longboat Quay), no guarantee that the required paperwork and ancillary certificates will be in order or kept on record by the Certifier, and nothing to stop a developer winding up the job-specific development company to eliminate any future liability for possible future building defects. Owners will be left in a similar position to the owners of Longboat Quay: looking to pursue the “last man standing” for redress with no guarantee of success through the courts.

Extract off article:

“…The property was 305 Longboat Quay, a unit in a development that has for over a year been the subject of major controversy over fire safety and poor construction work, as first reported in the Irish Examiner. Just last month, Dublin Fire Brigade wrote to representatives for the development threatening that if remedial work was not started immediately, it would apply to have the 600 residents evacuated.

The new owner…had no idea of the quagmire into which he had just walked.

“I bought this on behalf of my father,” he said. “I didn’t get a chance to view it, but I saw it on the paper and went through all the legal documents (he has legal training himself) and thought it was fine.”…

As of now, his first aim is to reverse the purchase. “It’s outrageous that they can allow this to go up for sale,” he says. Outrageous, possibly. But entirely legal…

Anybody interested in buying 305 would not have been aware of the extent of these problems without looking hard through the documents. Among the thick file of legal and sale documents made available through Allsops, there were a number of certificates of questionable integrity in light of all that has emerged in the last year.

For instance, the file contains fire safety certificates issued when Longboat Quay was built. Typical of the assertions in the certificates is the following: “We confirm that the fire safety precautions incorporated in the building complex were assessed and inspected by the undersigned in the period August 2003 to January 2007.” This was signed by a fire consultant retained by the developer. Elsewhere, there is a letter dated October 12, 2006, from a mechanical and electrical contractor confirming that “the smoke alarm and detection system has been designed and installed in accordance with IS3218”. Both the fire safety certificate and the installation of the original fire alarm systems have been exposed as containing serious flaws. Yet anybody perusing the certificates would be left with the impression that everything was in order and safe. The documentation also contains a cert for the new fire alarm system completed in February this year.

Then there is the architect’s opinion, which passed for regulation when Longboat Quay was being built. The architect, Eugen Van Jaarsveld, was employed by the developer, Bernard McNamara, through one of McNamara’s vehicles, Gendsong. Mr Van Jaarsveld left this country in 2011. He is currently employed in Ghana.

In his certificate of compliance, Mr Van Jaarsveld asserts that his opinion is “issued solely for providing evidence for title purposes for the compliance of relevant buildings or works.” He goes on: “It should be noted that a site inspection service was not provided.” Yet, despite that he gave the whole thing the nod based on a “visual inspection of the buildings and works”. This was – and still is – entirely legal. A visual inspection, however, is sometimes hardly worth the effort…There are references to the recent discoveries in the documentation if you look hard enough, but the prominence and extent of these references would hardly flash a warning.

On Page 13 of the Conditions of Sale document states: “The purchaser purchases the subject property with knowledge of the recent concerns raised by a fire consultant in relation to the apartment complex of which the subject property forms part.” It goes on to say that a new alarm system has been installed as phase 1 of the work which is now completed while “phase 2 is ongoing”.

And that’s the extent of the briefing on the problems. Also included is a statement suggesting there isn’t much else to know. “The vendor has not received any further notice or information in relation to these issues, apart from the information that has been furnished. No rejection, requisition, rejoinder or enquiry shall be raised in this regard.”

The above references hardly provide a full picture. The “fire consultant” discovered issues 16 months ago, and since then there has been further explorations by both the fire brigade and a consultant retained by the management company which have exposed further major flaws.

While Phase 1 (the new alarm system) is complete, as stated, a reader may conclude that Phase 2, the major works, are underway. In reality, the funding for this work has not been secured. The management company has acknowledged that apartment owners are likely to be liable for some of the cost at least.

The only reference to any future liability is contained in another of the sale documents, titled Replies to Multi Development Act Enquries.

Listed among t enquiries is a relevant question. Is the vendor or the OMC (operating management company) aware of any possible claims against the funds of the OMC? The reply is: “Yes, defects report identifies significant areas of concern.”

All of the professionals involved in the sale, from receivers, to solicitors, to auctioneers, fulfilled their legal duty. All can reasonably claim to have been ignorant of the extent of the problems, even though the issue was covered in the media. The vendor could claim likewise, particularly as the unit was unoccupied and it consisted of assets that were handed over to a receiver.

But what about the citizens looking to buy a home? Are their rights what they should be? The fallout from the years of frantic building are going to continue to be felt. Citizens should be entitled to a lot more protection.”

Other posts of interest:

Building Failures – Is the consumer protected?

How developers are “adapting” to the new Building Control Regulations

Irish Examiner | “Local Authorities should be setting the standard”- Minister Paudie Coffey

Michael Clifford: “when will we address cracks in construction?” Irish Examiner

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

Reintroduce State Inspection of Buildings | Mick Wallace T.D.

5 thoughts on ““Risky housing sale outrageous but legal” | Longboat Quay

  1. constructmanage

    Michael Clifford is a brilliant journalist. He has written about some great topics over the years. The article written about the legality of someone purchasing something that is faulty, maybe in this example, should be reconsidered by Michael. Is it legal for anyone to purchase anything that it is legal to sell? Caveat emptor (let the buyer beware) is a contract law principle that controls the sale of goods and property. If, in this case, or in any other sale of property, the seller actively concealed latent defects or otherwise made material misrepresentations amounting to fraud then the purchaser has a case for litigation. The purchaser should be able to claim the costs of putting the faults right if they can produce evidence of fraud. The building in Michael’s article is outside the area of the newly imposed regulations (SI.9 and SI.365) but that does not mean that a claim cannot be made. If the new regulations were in force, and the signed certifier had ‘left the country’ or was no longer alive or certified or whatever, then the local authority may be drawn into liability for their acceptance of the signed certification. This is one of the reasons these regulations are pointless. If the regulations are to be properly enforced, and if the government (through the tax paying people of Ireland) are going to have to take on the unnecessary future costs of fraud litigation and of the correction costs of building faults, then the government (through the local authorities) must take direct responsibility for examining new construction works. This would help to reduce the costs of building by eliminating the substantially increased building self regulation certifying costs. Because the planning authorities are already legally responsible for accepting the signed certificates, the existing planning permission fees are sufficient to cover these costs. Proper building regulations are absolutely necessary to ensure that appropriate standards are in place. Wrongly imposed over-regulations are not the answer to building problems.

    Reply
  2. Andrew Alexander MRIAI

    As per the comment above by constructmanage;

    “If the new regulations were in force, and the signed certifier had ‘left the country’ or was no longer alive or certified or whatever, then the local authority may be drawn into liability for their acceptance of the signed certification.”

    My reading of the Building Control Act 1990 and the Code of Practice for Inspecting and Certifying Works 2014 leads me to conclude that Local Authorities would not be drawn into such liability.

    Section 3.6.2 of the Code of Practice states that there “is no requirement or obligation for the Building Control Authority to carry out a technical assessment of the plans or other documents submitted, see Section 6(4) of the Building Control Act 1990.”

    Section 6(4) of the Building Control Act 1990 states that “the building control authority shall not be under a duty to any person” to ensure that buildings under construction or completed “comply with the requirements of the building regulations or be free from any defect”.

    In relation to subject of Certificates, the Act of 1990 states that local authorities are under no obligation to ensure that any Certificate submitted to them complies with the requirements of the Act nor to they have a duty to “verify that the facts stated in the Certificate are true and accurate.”

    Reply
    1. constructmanage

      Andrew clearly has studied some of the details included in the Building Control Authority Act 1990 and, I’m sure, the points made are accurate. But are they relevant in the circumstances?
      The local authorities may claim to be under no obligation to ensure any certificate complies with the requirements of the Act and may also claim to have no duty to verify any certified facts.

      The law is a very wild animal. Law is generally classified in two categories – Public Law and Private Law. Public Law governs relations between the State and the individual. Private Law governs the law of contract and the law of property.

      In the Private Law where the Building Industry is concerned, a contract is an agreement between one party (the client) and another party (the builder).

      Then came the new building regulations which intervened in the private contracts by imposing a new contract – an agreement between a design certifier, the builder, and the local authority. The client pays the additional costs for the contract but doesn’t receive any benefit.

      At some time in the future this will have to be put before the courts. Who will be held responsible when the first two parties in the ‘regulations contract’ are no longer around?

      Reply
  3. constructmanage

    No Keith

    The original idea behind the regulations, which was agreed in Hogan’s Law, was to get additional payments for the assigned certifier’s who would only be registered by the Government.

    Those who put the proposals to the minister’s team neglected to clarify to them that the Local Authorities would eventually be legally responsible for repairs to buildings that were found to be faulty. Yes minister. There is no time limit on the certification and the only ones who are likely to be around when faults are discovered in the buildings, which was carried out under private building contracts, and were signed-off to the Local Authorities through the regulation legislation will be the Local Authorities.

    If the Government is to take proper responsibility for building works through building regulations by placing the the Local Authorities in the end of the firing line, then a stop must be put to the in-betweeners – (that is the accepted builder and designer self certifier’s) from getting substantial extra payments from the clients who don’t get any benefits for those substantial extra payments.

    The main point is that the taxpayers will, indirectly, again be ones who have to pay-up for any works carried out at the time the contract was being carried out when the first two ‘accepted signed certifier’s’ no are longer available to take responsibility for wrong building work.

    Building and property laws are very complicated. Even more complicated when government’s are manipulated into stepping into private contracts. As said earlier – Building contracts are between the client and the contractor. If there are problems the client can hold the contractor responsible,normally within a certain time limit. If the client want’s a guarantee they can get the contractor to insure the works for that time.

    Reply

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