IN THE years of the property boom housebuyers often queued for hours – sometimes days – to put down a deposit on the purchase of an apartment or house. But for some, that dream of home ownership has become a nightmare, one from which they are trying, unsuccessfully, to escape. Among the ranks of the disillusioned are 95 homebuyers who paid deposits to buy apartments in Dublin over two years ago. The apartments, however, were either not built or not completed. And the buyers have found now that they have lost their deposits, after Laragan Developments, a property company, was placed in examinership.
At a creditors meeting last week, the homebuyers – whose deposits ranged from €10,000 to €15,000 each – were told they could expect to recoup a mere €150 to €200, or 1 per cent of their initial outlay. But as their deposits were paid more than two years ago, they were not covered by the Homebond insurance scheme. This guarantees customer deposits for two years. Certainly, to lose an apartment is disappointing, and to lose a deposit is deeply dismaying. However, for the depositors to be told by the Examiner, Paul McCann, that they would receive a “substantial benefit” was particularly galling in the circumstances. The “benefit” released depositors from their contract to buy apartments, apartments the builder had failed either to build, or finish. Mr McCann suggested, given the depressed state of the property market, depositors could now acquire alternative properties at a “substantial discount”. Of course, these buyers have €20,000 less to spend and, as some are now unemployed and have seen their savings depleted, they may be in no position to raise a new deposit and re-enter the property market.
The homebuyers have every reason to feel cheated, and betrayed having lost so much, both in money, time and worry. It has been suggested the property company may try to make completed apartments in its various developments – priced at current market value – available to those who have lost their deposits. That is the least that should be done.
Nevertheless, to ensure what has happened cannot be repeated the terms of the Homebond scheme must be changed. The Construction Industry Federation should now accept the need to guarantee all deposits made by housebuyers, and without a time limit. A failure to reassure homebuyers that their deposits are safe, and recoverable, can only further depress a depressed property market.