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Criticism as buyers in new housing estate asked for extra €60k to finish homes

The buyers were asked for an extra €60,000 so that the developer could finish the homes.

BUYERS OF NEW homes in a housing development in Rathmolyon, Co Meath are set to meet this evening after the developer of the properties asked them for additional funds to finish the homes.

The Irish Independent first reported today that buyers in Rathmolyon, Co Meath were asked to pay an extra €60,000 by developers Meathamatic Ltd after the company said they were in financial difficulties.

The paper reported that a series of meetings had taken place between the solicitors of Meathamatic – Fitzgerald and Co in Dublin – and the buyers, where each of the 16 buyers were asked to pay the contribution.

One of the buyers told The Journal today that the development company have not given the group of buyers any indication of how the money would be used.

Financial reports, seen by The Journal, confirm that the company has been seriously financially impacted in recent years. 

It is understood that this project is the first time both the developers and construction company – MDS Construction, of which TV builder Peter Finn is the director – have embarked on constructing a housing estate.

The estate – Ring Fort – is made up of 16 homes, nine of which were meant to be completed in March of this year, the buyer we spoke to said. It’s understood two buyers have pulled out of the purchase agreement after the request for additional funding.

In a statement to The Journal Meathamatic Ltd said the company is “suffering significant financial difficulty” due to matters well beyond its control.

“There are many developments in similar circumstances across Ireland,” the company said in a statement sent through their solicitor. 

“Today’s increase in the rate of borrowing by the ECB will exacerbate the issues for yet more developments and indeed homebuyers,” they added.

Earlier today, the European Central Bank increase interest rates by 0.25%, for the tenth consecutive time since last summer.

The company concluded that its directors and office staff are “working proactively with all parties to find best possible outcomes for all”.

Twelve prospective buyers will meet tonight to discuss making the payments and whether the group should seek joint-legal representation.

They added that, up to now, they have not been made aware of any rights they may have regarding the outcome of a decision.

Sinn Féin TD and the party’s spokesperson on housing Eoin Ó’Broin told The Journal that he would urge buyers to talk to their solicitors to seek “strong legal advice” on the matter.

Ó’Broin said previous attempts have been made to tackle this area with legislation.

He added that he thinks the situation is “very serious” and called on the Minister for Housing Darragh O’Brien and Minister for Justice Helen McEntee to “make the right decision” and transfer legislative responsibility for this issue from Justice to the Department of Housing.

The statement released on behalf of Meathamatic Ltd said the project had been hampered by an increase in construction materials costs of up to 40%, new requirements being imposed on the company and significant delays in granting requisite permissions.

The company added that they had also had “dramatic (unprecedented) increases in the cost of funds from the primary (institutional) lender during construction”.

The Journal was told that the company that it would not comment on matters “relating to the company and its customers” for privacy reasons.

Ó’Broin said the situation highlights the “poor regulation” in the private housing market and the need for a statutory body and code of conduct for buying and selling homes.

Commenting on the issue, Social Democrats TD and housing spokesperson Cian O’Callaghan has said property developers should “stick to agreed prices”.

O’Callaghan said that the “onus should not be put onto purchases to meet any shortfalls that the developers encounter”.

“When developers profits soar there is never a reduction in prices agreed with people buying a home,” he added.

- With reporting by Jane Matthews