The draft guidance document 'Managing and Resolving Unfinished Housing Developments', published by the DoEHLG , will lead to "due diligence" assignments on behalf of financial institutions, receivers, local authorities, NAMA, etc., once the final guidance document is published during this summer of this year.
The CFAT Team have completed several diligence exercises, and, for some, are progressing with finishing out the schemes. Based on our experience we advise to proceed cautiously when preparing budgets especially for work beneath the ground, and in areas where access is difficult.
During the 'boom', in some cases, corners were cut, and this is particularly true for works beneath the ground. It is now clear that when defects are uncovered, liability is difficult to determine. (Note - the legal quagmire associated with residential units and the current 'pyrite' controversy).
In some cases the cost of remedying defects when the professional have made their recommendations will be far higher than the cost of undertaking such work correctly in the first place.
During the 'boom' period, the scrutiny applied by potential purchasers (and their financial and legal representatives) was not perhaps what it should have been. In future, purchasers and their advisers will be adopting a much more stringent approach to ensuring that all works are fully certified and completed in accordance with Local Authorities requirements.
