AKC News // Developers agree to end stage payments from June 2007

DEVELOPERS have agreed to axe the controversial stage-payment method of house-buying from June.

By Eoin English
Source: Irish Examiner

The Government confirmed last night that it has reached an agreement with the Irish Home Builders' Association (IHBA) for its members to adhere to a voluntary code and end the practice from June 30, 2007.

It means first-time home buyers in areas of the country where the practice still exists will no longer be forced to come up with large installments at various intervals when a house is being built.

Contracts or agreements signed on new homes in large developments will not include stage or interim payments.

The announcement came following months of talks between Housing Minister Noel Ahern and the IHBA, which is part of the Construction Industry Federation (CIF).

An agreement in principal was reached last July, but talks had continued on the finer detail until recently. Stage payments for new homes exist in certain areas of the country only.

The method ceased to exist in and around Dublin in the early 1980s, when a city solicitor was successfully sued by a client in relation to the matter.

As a consequence of the court action, Dublin solicitors declined to handle conveyancing transactions that involved stage payments. But the method still exists in Cork, parts of Kerry and Limerick, Sligo, Galway and Mayo.

Billy Kelleher, Fianna Fail TD in Cork North Central, said he has had numerous representations from constituents on the issue.

He welcomed the new agreement and said it would ease the pressure on first-time buyers.

"The move, which applies to large-scale developments, will make life much easier for home buyers, especially young couples, to get their feet on the property ladder," he said.

"They will no longer have to pay when the floor is put down, when the roof is in place and at other stages during the building process.

"Instead, they will only part with their money when the house is completed."

The agreement will also help fast-track the snagging process because builders will not have been paid in stages, he said.

Joe O'Brien, chairman of the Cork branch of CIF, said that, while his 200 members had been reluctant to accept the agreement, he expects all to abide by the voluntary code.

Mr Kelleher called on the IHBA to ensure its members adhered to the spirit of the deal.

Date : 23-02-2007