Some 40% of defective blocks homeowners face rebuild costs over €420,000 cap

The housing minister has been warned that 40% of defective blocks homeowners in Donegal face construction costs to rebuild their homes that will come in above the proposed cap of €420,000 in the enhanced redress scheme.

Defective blocks campaigners have also told Darragh O’Brien that “very significant inflation” in construction costs in the last year means more homeowners are facing a rebuild spend over the cap, amounting to tens of thousands of euro in some cases.

The minister held a virtual update on the regulations for the enhanced scheme on Wednesday with homeowner representatives from Donegal, Mayo, Clare and Limerick.

Mr O’Brien told the meeting that the Government hopes to have the regulations signed off by the end of this month with the new scheme, which was approved by the Cabinet in November 2021, to be implemented by the beginning of June.

He was told by campaigners that escalating costs means the scheme will be inaccessible to homeowners who don’t have additional funding and that many accessing the €2.2bn scheme will face taking on additional debt.

Homeowner representatives told the meeting that the cap on rebuild costs means the scheme “is not and never can be 100% redress”.

Focus group urges banks to help Mica homeowners to avoid mortgage defaults

The group is concerned about an anomaly which means that the demolition of a property - even those demolished under the State’s redress scheme - could be deemed as a default and see the homeowner liable for a full repayment of the mortgage.

The meetings also heard that homeowners are spending between €7,000 and €12,000 just to access the scheme.
Officials told the meeting that more than 350 submissions have been made to the draft regulations and 13 amendments have been proposed.

A briefing on Wednesday’s update from the Mica Action Group said homeowner representatives were also told that a meeting will be set up in the coming days to provide information on construction rates for the scheme.

The homeowner representatives raised a range of concerns including the responsiveness of the scheme to payments of invoices, the difficulty of homeowners securing home insurance and the lack of support for homeowners, especially those who are vulnerable or may need assistance.

Campaigners from the four affected counties have requested an urgent review of the scheme, which under legislation is to take place within three years.

They were also told there will be a public information campaign on the implementation of the revised scheme.