OPINION:Housing consumers are poorly protected by the State, writes PADRAIC KENNA
THE SHOCKING scenes of 300 residents being effectively evacuated from their newly built homes in Priory Hall clearly highlight the poor protection for housing consumers in Ireland.
The reckless disregard of many developers (and their corporate funders), the inadequacy and non-enforcement of the Building Regulations and the laxity of many housing-related professionals demonstrates how vested interests can safely trample over citizens’ housing and consumer rights. Housing consumers are poorly protected by the Irish State, as purchasers, as social housing tenants, as borrowers of housing finance, or as consumers of housing-related services.
House purchasers risk incurring enormous legal costs in litigation to enforce the few rights they have. Indeed, there are no provisions in the Building Regulations that enable consumers, purchasers or renters to report and effectively obtain a remedy for breaches of these regulations.
Some recent legislation, such as consumer protection for those with “housing loans” within mortgage law, significantly higher legal standards in rented housing, and EU law on unfair contract terms, have advanced the rights of housing consumers. Yet, the overall position remains one of legally weak and financially vulnerable housing consumers. Seeking redress through the courts, which is often the only possibility for a claim/hearing of any kind, can involve major issues of costs, delay and uncertainty.
Indeed, the risk of enormous costs being borne by individual litigants renders any legal rights which might exist almost largely symbolic. In this scenario, and notwithstanding the sympathy of many lawyers and judges, the content and operation of the law is widely viewed as protecting the rich and powerful.
The powerless position of citizens purchasing homes has been highlighted by the Law Reform Commission since 1977. A report prepared for the National Consumer Agency in 2008, by Mason, Hayes Curran, Grant Thornton, and Fitzpatrick Associates, highlighted the substantial need to educate and empower consumers in respect of their dealings with the home construction industry in Ireland.
This historically significant report set out some 25 major recommendations in relation to such matters as weaknesses in structural guarantee agreements, building control enforcement, fire safety certificates, professional indemnity insurance and regulation of building trades. No significant action has been taken on any of these, with the exception of the Multi-Units Developments Act 2011.
The agency’s annual reports show less than 4 per cent of its queries related to home improvements in 2009 and 2010. Yet the agency undertakes very few test cases to enhance consumer protection in this area. Indeed, it states in its recent annual report that it expects “businesses to comply fully with consumer law and to treat consumers fairly, as they would wish to be treated in their personal lives as consumers”.
Such moral exhortations clearly do not lead to effective consumer protection. The report to the Joint Oireachtas Committee on Environment, Transport, Culture and Gaeltacht on October 11th last by the Pyrite Action Group pointed out that as many as 50,000-60,000 homes could be experiencing defects due to pyrite used in construction. The denial by HomeBond of any responsibility for structural damage under its 10 Year Structural Guarantee in these cases raises major questions concerning the nature and enforcement of State regulation over recent years.
While there are some minimum requirements in terms of standards and rent books for those who rely on social housing through local authority or housing association-owned or -leased properties, there is no specific agency dealing with consumer protection in this area of housing. Private rented sector tenants, however, have benefited from greatly enhanced regulations on housing and other standards in recent years, and have the independent Private Residential Tenancies Board to obtain redress as housing consumers.
The Government Sales Law Review Group Report on legislation governing the sale of goods and supply of services, published last week, does not mention housing at all, despite these sales/purchases being the largest ever undertaken in the lives of citizens.
Protection of housing consumers against reckless lending ought to occupy the urgent attention of law reformers.
While the Government has pledged to bring consumer law into the 21st century, the legacy of “participation” and social partnership often means State review groups have been dominated by producer/supplier corporate interests rather than consumers. This has exacerbated the failure of political leadership and responsibility at local and national level, to date, to protect Irish consumers.
Of course, there will always be an inherently unbalanced relationship between individual consumers and suppliers in relation to housing. Traditional consumer law regards these as free contracts between individual buyers and sellers.
The reality, in relation to most basic needs such as housing, food and clothes, is the large-scale sale and purchase of standardised commodities. These are produced by a small number of corporations, many of them national and international operators. States have long acted to overlay these consumer contracts with implied terms as to fitness for purpose and safety, for instance, and this is often described as regulation – a task which appears to continuously defeat the Irish State.
In light of the obstacles to consumer protection, one might ask whether there is something within the Irish State itself which continues to protect housing suppliers/providers from proper regulation, and which denies housing consumers effective consumer rights.
Dr Padraic Kenna is a lecturer at the School of Law, NUI Galway, and author of Housing Law, Rights and Policy (Clarus Press, 2011)