Helping Home Owners

Helping Home Owners

Support for Mortgage Holders in Difficulties

The tradition of home ownership is very strong in Ireland. Successive governments facilitated home ownership in a variety of ways including in via mortgage interest tax relief. I The OECD has concluded that Ireland has one of the most ‘tax-friendly’ housing environments in the world. Banks and Building Societies which are registered with the Financial Regulator must under the Code of Conduct on Mortgage Arrears make every reasonable effort to agree an alternative repayment schedule with borrowers who find themselves in difficulties.

Registered lenders are required under the terms of the Code to give consideration to alternatives such as deferral of payments, extended terms of mortgage, changing the type of mortgage or capitalising arrears and interest.

On the 5th February the Financial regulator wrote to all mortgage lenders informing them that from 17th February the Statutory Code of Conduct on Mortgage Arrears has been amended where arrears have arisen on a borrower’s primary residence. The Regulator’s initiative followed a request from the Minister for Finance that the ‘waiting period’ be doubled as a means of taking pressure off mortgage holders who were experiencing difficulties.

Registered lenders are now required to allow at least 12 months from the time arrears first arise before applying to the Courts to commence legal actions.

In addition to the Code of Conduct, the Irish Banking Federation has announced that its members will hold off on legal action against those in difficulty as long as the borrowers who are in difficulties stick to mutually acceptable arrangements that are put in place to deal with the debt. These arrangements are subject to six monthly reviews.

Advice for mortgage holders with problems is available through the Money Advice Budgeting Services (MABS).

The Money Advice Budgeting Services (MABS) provides a free, confidential and independent service for people who find themselves in difficulties particularly with mortgage arrears.

The Government has recently increased the advisory services provided through the Money Advice Budgeting Services (MABS).

The Irish Banking Federation and MABS have agreed an operational protocol which will enable MABS and the Irish Banking Federation to work closer with each other, to help people who find themselves in difficulties.

In addition to the advice and guidance through MABS the Government, in the most recent budget, refocused mortgage interest relief on those who bought their homes at the peak of the market.

The Government is also providing financial support to over 15,000 families, through the Mortgage Interest Subsidy Scheme.

With an eye to the longer term the Government has established a Review group on Mortgage Arrears. Headed up by the Department of Finance the Group is examining problems arising from both mortgage and non-mortgage debt, considering measures to assist people with mortgage arrears to keep possession of their family home and examining measures adopted in other countries to deal with this problem. The Group will report on a rolling basis on the most sensible and effective way to deal with these problems.

PRSI Scheme to Create Jobs

PRSI Scheme to Create Jobs



Under the Government’s latest job creation initiative €36 million will be made available to businesses that create jobs.
Under a new Government initiative, an employer who creates new jobs for people who have been out of work for 6 months or more will be fully exempt from PRSI liability for the first year of that employment.
The scheme will save an employer in the region of €3,000 from the annual cost of employing an additional worker.
The Employer Job (PRSI) Incentive Scheme will help to create jobs and help to get people who have lost their jobs back to work.
The scheme, which will be open to applications in relation to any job created in 2010, is being specifically targeted at people who have been out of work for 6 months or more because evidence suggests that that after 6 months on the Live Register there is a danger that people will drift into long-term unemployment.
An employer will not have to pay PRSI for 12 months from the time an application is approved.
There are a number of safeguards built into the scheme to ensure that it has maximum impact and prevents any abuse:
 The job must be full-time and must be new and be additional: employers will not be allowed to substitute existing employees to avail of the scheme.
 The job must last for six months or more. If it does not the PRSI exempt amounts will have to be repaid by the employer.
 The employer will be required to furnish an up-to-date Tax Clearance Certificate.
 Employers will be limited to a maximum participation rate of 5% of their existing workforce or, for smaller companies, a maximum of 5 new jobs.

New Law to Govern Property Management Companies

New Law to Govern Property Management Companies

The Government has introduced legislation in Dail Eireann which will be of particular interest to apartment owners and to people with homes in ‘mixed developments.’ The new legislation, the Multi-Unit Development Bill 2009, will regulate new and existing management companies.

The legislation, implements recommendations made by the Law Reform Commission on the regulation and management of apartment blocks and other multi-unit developments in June 2008

The legislation provides a legal framework that will govern the establishment and operation of management companies. It also provides for the transfer of ownership of common areas within apartment block or other multi-unit developments.

The Bill introduces statutory regulation in this area for the first time. It addresses issues relating to the obligations of developers, the operation of management companies and protects the owners of new and existing units in apartment blocks and other forms of multi-unit developments.

Critically the Bill provides for the transfer of common areas to owner management companies prior to the sale of any units in an apartment block. This will overcome the difficulty faced by many buyers of apartments where developers continued to effectively hold control of common areas, a feature that some developers sought to exploit through the operation of management companies which they continued to control.

The Bill also makes provision for voting rights and sets out regulations for the establishment and maintenance of schemes for service charges. It makes mandatory the provision of sinking funds necessary for the long term care and maintenance of apartment blocks. The legislation also sets out mediation and a court based resolution system for resolving disputes.

The legislation together with the recently published Property Services (Regulation) Bill 2009, will, when in operation bring a very important new form of regulation into Irish property management. It will transform the regulatory environment for management companies, impose new obligations on developers and give new powers to apartment owners.

The National Consumer Agency has welcomed the publication of the bill as representing a “good day for consumers”. The agency has specifically welcomed the obligations to transfer common areas to owner management companies and the extinguishment of the beneficial interests of the developer on completion of a development. It welcomed the transparency in relation to service charges and the statutory requirements to create a sinking fund.

The Apartment Owners Network which supports campaigns for Irish apartment owners has also welcomed the publication of the bill.