Cost of addressing fire safety defects in apartments put at €17,000 per unit

The average bill for dealing with fire safety remediation in apartments is likely to come to €17,000 for each unit, according to internal estimates it is understood are being used by the Government’s working group on the issue.

However, when all costs outside of fire safety remediation are brought together - such as for structural issues or water leaking into homes, which are often present alongside fire safety issues - the costs could be up to €35,000 per unit, according to figures given to the working group.

Smaller issues such as water ingress alone can cost a few thousand to fix, according to submissions made to the group.

The group has been tasked with establishing the scale and prevalence of historic building defects. It’s understood that a range of costs has been given to the group to help estimate how much resolving long-standing defects could cost.

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Submissions have been made by groups representing social housing organisations, chartered surveyors and owners of defective homes. After examining these, the working group has decided to make a working assumption that the fire safety costs alone will work out at roughly €17,000 per unit.

Estimates for the total cost of remediating defective homes have been put at up to €1 billion, with the Construction Defects Alliance, which represents affected homeowners, judging that between 18,000-20,000 apartments have been affected.

However, more accurately gauging the final cost of remediation is one of the main tasks Minister for Housing Darragh O'Brien has set the working group, which is examining defects in purpose built apartments and duplexes built between 1991 and 2013.

Information has been gathered via an online questionnaire which ran until March 14th, and is now being examined by the members of the working group - which is due to hold its first face-to-face meeting on Friday, April 8th.

Meanwhile the Construction Defects Alliance and the Apartment Owners’ Network have called on the working group to impose a levy on the construction industry to help pay for the cost of remediation.

One per cent levy

They estimate that a 1 per cent levy on the output of the construction sector in 2022 would recoup €320 million and say there is precedent for this, such as the Bank Levy which was imposed on the financial sector in the wake of the crash.

The advocacy groups point to the UK where the government has explicitly asked the construction industry to contribute to the costs of remediating fire safety defects.

They also note that Minister for Housing Darragh O Brien himself suggested such a levy in a statement he made in November last year while announcing details of the Defective Block Scheme. At the time he said “the potential for an industry levy to financially contribute to the Scheme will be investigated”.

In a joint submission made to the group on March 29th, the representatives also said owners who have already paid for remediation work should be covered in any recommendations made to Government. They suggest tax credits as a way of delivering this.

They also say that owners of defective homes should be treated in an equitable manner “whether they are landlords, owner-occupiers or social landlords; whether they own a home affected by fire/water ingress defects or mica and pyrite”.

Both the pyrite and mica schemes provide for 100 per cent remediation grants (up to a maximum of €420,000 per home for Mica) as well as covering accommodation and advisory costs. The submission states that these features should be largely replicated in any remediation scheme for defects.