Wednesday, September 28, 2011

Got brochure for IFG Home Price Protection Plan Insurance financed by Seller! Wonder will many take it up? Comments?



I put this house on Daft to rent in Clonmel yesterday evening and today have 11 viewings! There is huge demand in Clonmel for rentals at the moment.

If you have a vacant house, please call us as we have lots of qualified tenants.



P F Quirke & Co Ltd

44 Gladstone St


Co Tipperary


Ph: +353-52-6121622

Blog: QuirkeProperty

Twitter: @clonmelproperty


FB: pfq


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Monday, September 19, 2011

Changes to solicitors’ practices should benefit public | The Post

Despite the reduction of stamp duty to 1 per cent since last December, the cost of buying a home can still be significant, especially in recessionary times. Small wonder that reduced solicitors’ fees seem attractive.

But is cheap conveyancing such a good idea? Too good to be true, perhaps? With the property market remaining slow and the quality of solicitors’ work during the boom years coming under scrutiny, bargain deals from solicitors are being increasingly questioned.

The Minister for Justice, Alan Shatter, launching a report on the legal profession, said not all legal services were under-priced and not all low-cost conveyancing was of poor quality. But, particularly in cut-price conveyancing, corners were being cut too often by solicitors under pressure from clients and financial institutions.

The pressure to reduce fees may partly be due to the slowdown in the property market, but it may also be because of the huge numbers of new solicitors in recent years. More than 700 new solicitors a year have graduated from the Law Society’s law school in the past three years alone, most of them hoping to join an already overcrowded profession. The society itself acknowledges that there are at least 1,000 unemployed solicitors, a statistic probably unique in the history of the profession.

Meanwhile, there has reportedly been a dramatic increase in negligence claims against solicitors, both by their clients and by banks. Many of these arise from property transactions in which solicitors under pressure arguably gave insufficient time to clients’ files or delegated work to assistants.

Conveyancing above all requires attention to detail, but ill-considered, binding undertakings as to good title were freely given to banks.

There are now clear indications that the public has not been particularly well served by the cosy relationship between solicitors and banks.

With banks demanding that title undertakings be fulfilled, increasing numbers of solicitors are realising that the relationship is not so cosy after all. In addition, many solicitors are tiring of doing much of the banks’ own legal work without payment from the banks.

The future relationship of solicitors with the lending institutions may now change significantly.

Banks doing their own legal checking before lending money may benefit customers in particular. Customers and banks are both then less likely to later discover errors by underpaid and overworked solicitors.

Banks giving loan cheques to solicitors simply on undertakings to provide good title are increasingly being recognised as the shortest route really being the longest way home. Many claims now being made alleging defective work by solicitors would not have arisen if the banks had checked the titles themselves in the first place. There would then be fewer customers with defective titles on their properties - but time was short and there was money to be made.

At present, banks still do not check titles before handing over loan cheques, and simply rely on the purchasers’ solicitors.

Often, the purchasers do not really understand the serious implications of these arrangements until a problem arises.

Until now, solicitors have had no choice because of arrangements with banks arranged by the Law Society. We may be on our way back to the boring, but safer, ‘‘three-way closings’’ between the solicitors of sellers, buyers and the lending institutions. When the property market comes back to life, the landscape may be quite different. Special offers from solicitors may seem less attractive, the relationship between banks and solicitors may be a less cosy - and the public may be the real winners.

Patrick Igoe is a solicitor and principal of Patrick Igoe & Co Solicitors

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Rents falling in Dublin docklands | The Post

Rents have fallen dramatically in Dublin’s docklands, boosting the occupancy rates of many of the new office developments in the area.

This is to the detriment of more traditional office locations, such as Georgian Dublin, according to Marie Hunt, head of research at CBRE.

At the peak of the market, rent for the docklands area was around €65 per square foot, but some of the best office buildings are now being let at €30 per square foot. Offices in the docklands that previously cost €50 per square foot are now €20 per square foot.

‘‘The presence of Google and Facebook in the docklands, as well as improved transport links, has greatly helped its desirability as an office location," said Hunt.

Even though the investment market is dead, the occupier side of the market is booming because tenants are taking the opportunity to move into newer buildings at reduced rents.

‘‘In the past, they would have signed a 20-year lease, which probably had upward-only rent reviews and they were paying top dollar in terms of rent," she said. ‘‘Now the tenants are calling the shots and they are saying, ‘I’ll pay you x amount of rent, I want a ten-year letting and I want a break option at year five’. Because there are deals to be done, people are taking advantage of that and the take-up figures for offices are not that far off where they were during the boom."

But the downside of this is that a lot of older buildings are being left vacant as companies take up better offers in newer buildings in areas such as the docklands.

‘‘The vacancy rate in the Dublin office market is over 22 per cent, and there are some buildings that have been on that list for years," she said.

‘‘No matter what rent you charge for them, you are not going to get a tenant into them because they are basically obsolete.

That is why you see a lot of boards around Merrion Square, St Stephen’s Green and Georgian Dublin, because those types of buildings are not what the occupiers in the market today are looking for."

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Ahern role in group invited to pitch for Chinese project - The Irish Times - Mon, Sep 19, 2011

COLM KEENA, Public Affairs Correspondent

FORMER TAOISEACH Bertie Ahern played a role in Seán Mulryan’s Ballymore Group being invited to pitch for a multimillion-euro project in China.

The property group was contacted by the regional authorities of the Anhui province in China and asked if the group would be interested in masterplanning the construction of a business district and city on the banks of the Yangtze.

The group, which has substantial loans that have been transferred to Nama, believes the opportunity could provide substantial fees when many of its experienced staff are not busy because of the slump in building activity.

A source with knowledge of the project said he understood that Mr Ahern had a role as an adviser to the China Investment Corporation, an enormous Chinese sovereign wealth fund that had in excess of $400 billion in assets at the end of 2010.

An email request for a comment to Mr Ahern’s office in St Luke’s, Drumcondra, on Friday met with no response.

Attempts to contact the office by phone were not successful.

Mr Ahern is understood to have mentioned Mr Mulryan to the authorities in Anhui during a visit there when a senior figure in the province said he was a admirer of Canary Wharf in London.

Mr Ahern then said that Mr Mulryan had played a substantial role in that development.

The group believes it could secure up to €10 million in fees if it was given the role of overseeing the development. However, it would not be involved as a building contractor and the project would not involve substantial risk for the group.

The group believes the idea could provide a line for a new stream of income at a time when it is not involved in any construction projects. Its involvement in the project has the blessing of Nama, according to the source.

Ballymore is unusual as a development group in that it handles so much design and oversight of its projects inhouse.

Mr Mulryan has been to Anhui to discuss the project and representatives of the group were in talks there last week.

The Anhui authorities want to build a new city on a greenfield site beside the Yangtze river, and have already built a bridge that would stretch from “Howth to Dún Laoghaire”.

Roads have already been built but the layout of the new city, in an area which is currently agricultural, has not yet been decided.

“The scale of what is being done is unbelievable,” said the source.

Funding is not an issue as much as the pace at which the local authorities want to proceed.

The site, at Jiangbei, is about three hours inland from Shanghai, and there are plans for another new city some miles upriver.

The project has the approval of the central government in Beijing.

Mr Ahern met the chairman and chief executive of the China Investment Corporation, Lou Jiwei, in May during a visit to Beijing.

Mr Lou is considered to be one of the most influential people in the world.

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Receivers to Kilternan sports hotel put value of €55m on the property - >>Had many a good night in this hotel as a student!

The receivers to the Kilternan sports hotel in south Dublin, once owned by Hugh O'Regan, are putting a value of €55.1m on the property, according to their latest report to creditors.

Mr O'Regan is believed to have spent €170m on the property, which is described as 85pc finished.

Most of the loans behind the property were supplied by Irish Nationwide and NAMA has now stepped in in relation to upkeep of the property, even though Irish Nationwide is officially listed as the man secured creditor.

The receiver, David Hughes of Ernst & Young, was unavailable to comment on the future plans for the site yesterday, but it is understood that NAMA is seeking to have some income generated from the site as soon as possible. There is a small amount of rental income coming in from the site at present.

However, the costs of upkeep are starting to grow rapidly. Payments made by the receivers in the latest period include to ESB, Bord Gais, security, consultants, legal fees and bank charges.

Property industry figures said the costs of upkeep of major sites like Kilternan was starting to become a major headache for NAMA. Consultants also have to be hired to advise on the best uses of the site.

Kilternan Golf & Country Club Hotel, its official name, in Co Dublin was acquired by leading publican and restaurant owner Mr O'Regan for "substantially higher" than the £8m asking price in 2001.

A major revamp of the hotel complex set on around 152 acres at the foothills of the Dublin Mountains on the outskirts of Kilternan Village was ordered following the change of ownership.

The property was sold by Kilternan Hotels, controlled by US-based businessman Chuck Feeney. The selling agents at the time were DTZ Sherry FitzGerald.

At that time Kilternan Golf & Country Club Hotel was a 48-bedroom, fully-licensed hotel and sports leisure facility.

- Emmet Oliver

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Offer of €175m for Blackrock Clinic | The Post

An international consortium has made an offer of €175 million to buy the Blackrock Clinic in Dublin.

The offer is said to be under serious consideration by some shareholders in the private hospital.

The offer was made by Emerald Health Care Capital, which was recently incorporated, and a consortium of co-investors including DJR Global Healthcare Capital LLC, Moor Park Capital Partners and Barclays Bank.

Shareholders in the Blackrock Clinic include orthopaedic surgeon Jimmy Sheehan and his brother Joe, who is based in the US. Nuclear medicine specialist Dr George Duffy, developer John Flynn and beef producer Larry Goodman are the other main shareholders.

In 2009, the hospital had a turnover of €84million and generated a pre-tax profit of €12.3 million, a decrease of €1.65 million compared to 2008. The company had net debt of €45.8 million at the end of 2009, and that debt is not being acquired by the purchaser.

The sale would give existing shareholders a sizeable windfall. British healthcare giant Bupa took a majority stake in the hospital in 2000.Bupa sold out of the clinic in 2006,in a deal that valued the hospital then at around €60 million.

The Blackrock Clinic was built in 1983 and is undergoing a €100 million expansion and refurbishment programme that will bring the number of beds to 160.The expansion has allowed the opening of a new emergency department, a new purposebuilt day surgery unit catering for up to 100 patients a day, and two new operating theatres, resulting in a 40 per cent increase in availability of theatre space. The clinic has nearly 500 staff.

Some shareholders in the hospital have invested in other private hospitals, including the Galway Clinic, the Hermitage in Lucan and Cork Medical Centre, which was liquidated earlier this year after it failed to secure an agreement to cover VHI customers.

Most patients are financed through the main private health insurers, with the state-owned VHI the hospital’s biggest ‘customer’.

The private healthcare sector is in a state of flux, with a number of new ventures - including the Whitfield Clinic and Cork Medical Centre running into financial trouble earlier this year.

DJR Global Healthcare Capital LLC is an equity real estate investment trust. It invests in the real estate markets of the United States, India and Europe.

The fund primarily invests in the healthcare sector.

Moor Park Capital Partners acts as an adviser to a number of real estate-backed investment vehicles and was recently involved in the completion of a sale and leaseback transaction with Spire Hospitals in Britain.

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Living off the land? Not exactly - The Irish Times - Mon, Sep 19, 2011>> Tell me about it!!

THE FARMING LIFE: In the second of our series, beef and sheep farmers tell KATHY SHERIDAN that there is money in the food business, but it’s the factories and processors that are making it – and the only way for families to survive in farming is to work off the farm

‘Oh yes, it’s true. My husband is a kept man,” laughs Teresa Turley, arriving home from work to find her husband Tom and The Irish Times drinking tea at the kitchen table of their comfortable, 400-year-old farmhouse in Clonfert, east Galway. It’s not entirely a joke.

Behind the excitable headlines about farm-income hikes, the reality is that three-quarters of all farmers still earned well below €20,000 from the farm business in 2010, according to a Teagasc study. That’s half the national average industrial wage and just over a third of the average public sector salary, in Tom Turley’s words.

In fact, just a quarter of Irish farms – some 26,000 – were deemed economically viable businesses in 2010. It’s hardly surprising then that more than half of all farms have an off-farm income. And that often emanates from the wife, that highly desirable creature once known in farming parlance as “the layin’ hen” – ideally a nurse or teacher. Or indeed, Teresa, who runs a vegetable shop in Nenagh.

“You couldn’t do this without an off-farm income,” says Michael Biggins, who was lucky enough to bag a teacher. He runs a 60- to 70-strong herd of suckler cows on 120 acres of exquisitely maintained Mayo land beside the Corrib river, part of which has been in the Biggins family since 1765.

Jewel-like fields, bounded by miles of ancient stone walls; a majestic beech tree reigning centre stage; cattle grazing contentedly and sheep moving lazily in neighbouring fields under a blue, balmy sky. It’s the kind of landscape that, for tourists, transforms the Irish fantasy into vibrant reality. Biggins eyes the beech tree as a parent eyes a much-loved, errant child. It’s the sort of “obstacle” that would be bulldozed in a more ruthless business. He loves it anyway.

In a way, it’s a metaphor for this style of farming. Tied to nature, irreplaceable, heartbreakingly lovely on a balmy, September day. But the beauty is skin-deep and high-maintenance. This is stony ground, reclaimed and drained and needing constant attention. “You couldn’t stick a plough into it,” he says.

Without Biggins’ care, it would rapidly descend, not into the charming, wildflower meadows of fond imaginings, but into an ugly, impenetrable tangle of briars, bushes and noxious weeds. His land is in four divisions, typifying the problem of farm fragmentation, probably the most pressing issue of an industry in desperate need of restructuring and efficiencies.

IRISH FARMS ARE TYPICALLY broken into separate land parcels, often three or four. In east Galway, Tom Turley farms eight separate parcels and is acutely aware of the need for consolidation. Capital gains tax is the problem.

Biggins’ land supports his suckler cows (each produces one calf a year, sold as a “weanling” at about eight to 12 months), a system that improves national beef quality. Even for an efficient producer, however, it doesn’t add up. Though Biggins got an increase of €160 per head for the 55 weanlings sold this year (an €8,500 increase in total), he is still worse off than he was two years ago. This is due to rocketing input costs and the abrupt withdrawal of the annual €7,500 Reps payment (for general environmental maintenance) in 2009. That’s left him with deductions of around €12,500.

“I barely retained the single farm payment (SFP) – less than €20,000 in my case,” he says, meaning he broke even and can put it into restocking and improvements. The SFP is the famous cheque in the post – a rule of thumb is that it averages about €100 an acre – and although it’s all he has left after a hard year’s slog, Biggins recognises the absurdity of the system. “If I never produced anything at all, I could have held on to that . . . I could empty the farm and still get it.”

A stark graphic in Teagasc’s National Farm Survey 2010 shows that in the cattle and beef sectors, market income failed to cover production costs.

It’s not about farmer efficiency apparently. William Kingston, a strong, confident, young dairy farmer in west Cork, tried farming for beef. “I have a lot of sympathy for the beef guys who are depending on the subsidies. They haven’t a hope. It’s just not possible to make money out of it. Really, it’s nothing more than a savings scheme. The meat factories are making the money.”

It is pointed out more than once that just three or four processors dominate the market.

Dr Cathal O’Donoghue, a calm scientist (via LSE and Cambridge) and head of research at the Teagasc Rural Economy and Development programme, notes that the agri-food industry “generates very substantial net earnings for Ireland Inc. It exports 80-90 per cent of its beef, dairy and sheep, the vast majority of it is processed beef. So there is money being made – and farmers aren’t making it.”

Consumers have also done extremely well out of low farm-gate prices and the much derided subsidies, says Turley. “In the 1970s, consumers were spending 30 per cent of disposable income on food – now it’s 11 per cent, even though I don’t know of any multiples who work off less than a 40 per cent margin.”

Ask a strong Co Wicklow grain farmer like Tom Shortt about the SFP and he is utterly unapologetic. “It’s not keeping me in a lifestyle, it’s to keep me producing food at a price that Joe Public can afford. If you could halve the supermarket take, you could halve the single farm payment. Supermarkets are getting too big a share.”

Turley, who runs a 225-acre suckler and sheep farm, says he took in less than €16,000 last year after allowing for farm mortgage and interest payments. The mainstay of the household income is the greengrocers shop run by his wife Teresa, a product of his earlier life as a vegetable grower and hers working in retail. “If we hadn’t the shop, I’d have had to go working, possibly into the building,” says Turley.

“Farmers really are living on €14,000 to €15,000 a year,” says Biggins, as his wife Bridie, the primary teacher, is off washing school desks a few days before term.

Between them, they’ve produced a family of five highly educated achievers. “This is the first September in 15 years that we haven’t been going to Dublin or Limerick looking for a house [for student offspring]. I feel very strongly about farmers being accused of hogging all the third-level grants. We got not one red cent towards third level. It’s sacrifices; we scrimped and saved. We went on the odd holiday; caravanning holidays. The reason is that we value education highly, even though most of us would be lucky to have second level.”

In the end, it’s not just the low-income threshold that most non-farmers would find hard to sustain. It’s the head-swivelling volatility of it.

In the year from 2009 to 2010, average part-time incomes (as defined by Teagasc) zoomed from €12,000 to €18,000, while full-time farmers went from €24,000 to €43,000 – and that still only brings them back to a little above 2006 levels.

Near Newtownmountkennedy, Co Wicklow, grain farmer Tom Shortt is running nearly 1,000 acres between owning and leasing. If the farm gets any bigger, he says, he may turn it into a company to manage the “tax surges” created by market volatility that, in a few years, has seen grain sink to €85 a ton then soar to €195 a ton. This year, he’s getting €195 and happily netting €40 of that.

But in 2007, 2008 and 2009, he says, “we were on our knees, getting €115 for grain that was costing us €160 to produce. If we didn’t have the SFP, we’d have been out the door seven years ago.” Meanwhile, they used the SFP to scale up: three tractors at €100,000 each, a combine harvester at €200,000, grain stores costing about €150,000.

An outsider looking at his beautiful old home up a long, surfaced avenue, would assume that here is a farmer doing very, very well. “It’s all relative. We have the scale but also have the costs associated with that. Farmers should know when they have it good and should stop whingeing. The thing is that as soon as we have it good, there are so many in the industry to keep us down. Everybody is looking over the hedge now at farming.”

Of course he was tempted by cheque-waving developers in the boom, amid talk of five-star nursing homes and golf clubs. “I know what we were doing made us look laughable by comparison. But you only sell it once.”

In truth, he is “very, very concerned” about the massive optimism around agriculture. “It’s over the top. A lot of people are already in terrible trouble with the milk super-levy. The industry is going from 0-60. Look what happened to construction.”

Sons of the soil come home to roost
THE SONS of the soil are coming home. The evidence is there in rocketing agricultural college enrolments, although it’s fair to say that not all of the students are full of enthusiasm. Even for 20-year-old David Douglas, who likes farming, it wasn’t quite in his lifeplan.

“I think a lot nearly have to go to ag college because they haven’t a choice, but they haven’t much interest either. I certainly wasn’t fully committed to farming,” he says, in his parents’ home at Monalin Farm, near Newtownmountkennedy, Co Wicklow.

“After school, I wanted to do an apprenticeship in mechanics or fitter/welder and combine that with part-time farming. Then the apprenticeships disappeared.” So he went to ag college.

His mother, Caitríona – who runs the family’s free-range egg business with 2,200 hens on their hilly, 85-acre sheep farm – understands why David is undecided. Egg sales have increased but prices are the same, inputs have risen and profits were “way down” by about €200 a week, or 15 per cent. “But it would be impossible to manage without them,” she says.

“Some would look at this farm and say there’s not enough land for three adult units,” says David. He can pick up a few weeks’ work in the local factory or work a few days a week for a dairy farmer, but he aspires to a “full week’s wages” – around €400 to €500, he says.

“I’d like to come home full-time,” he says reflectively, to his mother’s surprise. “I’d like a kind of partnership”.

Caitríona nods agreement and starts the bidding : “I’d be thinking €300 to €400 a week, as we’re building up an enterprise,” she says mildly.

“We’d have to get more hens, another 1,000 maybe,” he says.

He and his father, Syl, have already been expanding sheep numbers. “We need 300 between us and in a few years time, I’ll probably own half of them.”

He has been an assiduous saver since he was a schoolboy, putting away half his €350 take-home pay from a factory job.

“I don’t know how people make money in beef. Or sheep,” he says frankly.

“Everyone thinks farmers are rich. But we sold lamb at €4.60 a kilo, which the supermarket is charging €10 to € 12 a kilo for. If you could get €5 a kilo, that’d be the right price. You’d make a living”.

And thus, do great partnerships begin.

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Nama offers lands used as helipad by developer for sale - The Irish Times - Mon, Sep 19, 2011

LANDS OVERLOOKING Dublin Bay, which were used by developer Bernard McNamara as a helicopter landing pad, are being offered for sale by receivers acting on behalf of the National Asset Management Agency (Nama).

The four-acre site, adjacent to Booterstown marsh, a nature reserve which has EU Special Protection Area conservation status, is being sold through Farrell, Grant and Sparks. It was formerly owned by the McNamara group.

However, national heritage organisation An Taisce and local politicians are appealing to Nama to stop the sale and keep the land in public ownership.

In a letter to Nama chairman Frank Daly, An Taisce said the marsh land was of little commercial value, but was an important public and environmental asset.

If retained as an open space and absorbed within the zone of the Special Protection Area, it would have “considerable benefits to the local community, to views and vistas along Dublin Bay, as a wildlife haven and become an important study/observation area”.

It could also act as a “buffer zone” to the Special Protection Area, which would help protect vulnerable and sensitive species, particularly over-wintering birds such as the light-bellied Brent geese, the scarce Spotted Redshank and Little Stint, “which find a haven in the nature reserve”.

The buffer zone would also provide an additional layer of protection to the existing area of biodiversity importance and make a fundamental contribution to the conservation of the nature reserve and the wider bay region, it said.

“We suggest that Nama release this land to the Department of the Environment to be held under the portfolio of lands cared for by the parks and wildlife service.”

Dublin city councillor Paddy McCartan (FG) said it was within the powers of Nama to keep some lands in trust for the public.

“There is no need to rush headlong into the sale of these lands. It’s not a ghost estate or some other property they need to get rid of.

“This should be retained as open space for the benefit of the adjoining area.”

Labour councillor Dermot Lacey has tabled a motion for next month’s council meeting seeking support for the land to be added to the nature reserve.

In 2003, An Bord Pleanála refused Mr McNamara’s Ashcastle developments planning permission for 53 luxury apartments and a public park on the land.

Mr McNamara subsequently located a helipad on the site, but its use was stopped by An Bord Pleanála, which determined in 2005 that the helipad would require planning permission.

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Tuesday, September 13, 2011

Nama to seek tenants for 8,000 apartments - The Irish Times

SIMON CARSWELL, Finance Correspondent

THE NATIONAL Asset Management Agency plans to seek tenants for some of its 8,000 apartments with a view to selling them as blocks to investors to help shift properties stuck on its books.

Brendan McDonagh, chief executive of Nama, said that most of the apartments were in Dublin. The apartment rental scheme is aimed at investment companies that manage rented apartment blocks, particularly in the UK.

Nama had already rented out properties in Sandyford, Dublin, Mr McDonagh told reporters after appearing before the Oireachtas Joint Committee on Finance, Public Expenditure and Reform.

Mr McDonagh said the Nama board had signed off on “a highly developed product” to allow buyers defer payment on up to 20 per cent of the property’s value to sell some of the Nama’s 2,000 houses and revive the market.

Nama was in “latter stage” discussions with Bank of Ireland, AIB and Permanent TSB to participate in the payment deferral scheme, and had invited the non-Nama banks into the scheme as well.

The product, to be launched later in the year, will apply to family homes and houses.

Nama chairman Frank Daly told the committee that developers are being paid average salaries of between €75,000 and €100,000 a year under business plans approved by Nama.

In exceptional cases, they were being paid up to €200,000 a year.

Developers are also being incentivised to recover loans with payments of 10 per cent of the loan value above a certain level, he said.

Fianna Fáil finance spokesman Michael McGrath said developers were being paid a “cash bonus for repaying their loans”.

“It is unpalatable,” said Mr Daly, but necessary if the State agency was to recover more cash.

Nama has approved the sale of €4.6 billion worth of property assets – close to its target of €5 billion for this year. It must repay €7.5 billion of the €30 billion debt used to buy €72.3 billion of loans from the banks by the end of 2013.

Mr McDonagh expects Nama to make a profit of at least €500 million this year before loan impairments.

Up to 15 per cent of the agency’s 850 debtors were “self-indulgent” and had not accepted the reality of their situation, he said, while a further 20 per cent were not viable.

The agency has recovered between €70 million and €80 million worth of assets, mostly property and “a bit of cash”, transferred by developers to relatives.

Nama is “very close” to taking legal action against unco-operative debtors to recover assets transferred to family members, said Mr McDonagh.

Nama had assessed business plans covering €22 billion of the €30 billion value of the loans, but Mr McDonagh warned there was “no huge pot of gold there” in terms of hidden assets.

Mr Daly expects Nama to break even at least but he was still confident that it would make a profit.

Debts would only be forgiven when a developer had no more assets left to repay loans, he said. “It is only something that would be considered way down the line.”

John Corrigan, head of the National Treasury Management Agency, said the State will have to tap the euro-zone’s permanent bailout fund, the European Stability Mechanism, if it had not raised “substantial cash buffers” of €5 billion by the end of the EU-IMF bailout in 2013.

The NTMA hoped to extend its short-term borrowing in the second half of 2012 and start borrowing in the long-term debt markets again as soon as possible.

“The earlier the better . . . Obviously, the later in 2013 the capital market will ratchet the price up against you,” he said.

“We have to get back into the market as early as possible in 2013,” he said. The Government couldn’t leave it until the end of 2013 to raise funding to repay a bond of €11.8 billion in January 2014. There was no specific plan to borrow long-term at a particular date or interest rate, he said.

“There isn’t a box that has a secret plan with a rate and date.”

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Nama to seek tenants for 8,000 apartments - The Irish Times

SIMON CARSWELL, Finance Correspondent

THE NATIONAL Asset Management Agency plans to seek tenants for some of its 8,000 apartments with a view to selling them as blocks to investors to help shift properties stuck on its books.

Brendan McDonagh, chief executive of Nama, said that most of the apartments were in Dublin. The apartment rental scheme is aimed at investment companies that manage rented apartment blocks, particularly in the UK.

Nama had already rented out properties in Sandyford, Dublin, Mr McDonagh told reporters after appearing before the Oireachtas Joint Committee on Finance, Public Expenditure and Reform.

Mr McDonagh said the Nama board had signed off on “a highly developed product” to allow buyers defer payment on up to 20 per cent of the property’s value to sell some of the Nama’s 2,000 houses and revive the market.

Nama was in “latter stage” discussions with Bank of Ireland, AIB and Permanent TSB to participate in the payment deferral scheme, and had invited the non-Nama banks into the scheme as well.

The product, to be launched later in the year, will apply to family homes and houses.

Nama chairman Frank Daly told the committee that developers are being paid average salaries of between €75,000 and €100,000 a year under business plans approved by Nama.

In exceptional cases, they were being paid up to €200,000 a year.

Developers are also being incentivised to recover loans with payments of 10 per cent of the loan value above a certain level, he said.

Fianna Fáil finance spokesman Michael McGrath said developers were being paid a “cash bonus for repaying their loans”.

“It is unpalatable,” said Mr Daly, but necessary if the State agency was to recover more cash.

Nama has approved the sale of €4.6 billion worth of property assets – close to its target of €5 billion for this year. It must repay €7.5 billion of the €30 billion debt used to buy €72.3 billion of loans from the banks by the end of 2013.

Mr McDonagh expects Nama to make a profit of at least €500 million this year before loan impairments.

Up to 15 per cent of the agency’s 850 debtors were “self-indulgent” and had not accepted the reality of their situation, he said, while a further 20 per cent were not viable.

The agency has recovered between €70 million and €80 million worth of assets, mostly property and “a bit of cash”, transferred by developers to relatives.

Nama is “very close” to taking legal action against unco-operative debtors to recover assets transferred to family members, said Mr McDonagh.

Nama had assessed business plans covering €22 billion of the €30 billion value of the loans, but Mr McDonagh warned there was “no huge pot of gold there” in terms of hidden assets.

Mr Daly expects Nama to break even at least but he was still confident that it would make a profit.

Debts would only be forgiven when a developer had no more assets left to repay loans, he said. “It is only something that would be considered way down the line.”

John Corrigan, head of the National Treasury Management Agency, said the State will have to tap the euro-zone’s permanent bailout fund, the European Stability Mechanism, if it had not raised “substantial cash buffers” of €5 billion by the end of the EU-IMF bailout in 2013.

The NTMA hoped to extend its short-term borrowing in the second half of 2012 and start borrowing in the long-term debt markets again as soon as possible.

“The earlier the better . . . Obviously, the later in 2013 the capital market will ratchet the price up against you,” he said.

“We have to get back into the market as early as possible in 2013,” he said. The Government couldn’t leave it until the end of 2013 to raise funding to repay a bond of €11.8 billion in January 2014. There was no specific plan to borrow long-term at a particular date or interest rate, he said.

“There isn’t a box that has a secret plan with a rate and date.”

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Nama is one big, fat Orwellian nightmare -

Sunday September 11 2011

It's not easy, with so many crises on the go, to keep track of them all and give them all due attention and respect.

Things that would obsess us every day in the normal course of events often get forgotten about these days for weeks on end because we have even bigger fish to fry. Did you notice how we managed to put Nama to the back of our minds there for a while? Because Europe, or the world, was on the brink of disaster most days over the summer, Nama became just a little local difficulty and slipped down the hierarchy of disasters we should be paying attention to.

So well done to Prime Time the other night for reminding us again that Nama, the biggest secret society in the country, is still grinding on, the biggest quango ever, a state within a state. In fact, that notion of a state within a state was interesting because Nama, if anything, is more powerful than the Irish State; more powerful, in ways, than the Government. The Government, God bless it, can't do much off its own bat these days; it is just a bunch of local administrators who put into effect the whims of the troika and purr contentedly when they get a pat in the head from Olli Rehn or someone for being the poster boys for austerity.

But Nama essentially does what it wants, is effectively answerable to no one and has enormous power over everything from the property market to the future of the country. And, indeed, when Nama is asked to be accountable about all those billions of our money, it gets quite cranky. Frank Daly essentially told the Government on Friday that Nama could either be transparent or else could work as a commercial organisation to get back our money, but that it could not do both. In other words: back off and leave us alone to do whatever we want to do. Don't ask questions. We know what we're at. Do you want your money back or not?

Of course, the truth is that Nama offers neither commercial success nor accountability.

In the course of Friday's sitting of the Oireachtas Committee on Finance, Public Expenditure and Reform, Nama also informed us it would be making a profit, before loan impairments, of €500m in 2011. That's an interesting one. To the casual observer it could sound like Nama was doing well. As if it was making us all a few quid. But you need to put that kind of talk in context.

First, let us never forget that Nama lost us €40bn before it even started. Nama "bought" €72bn of loans from the banks for €32bn. This was kind of portrayed at the time as a win for Nama, as if we had got the loans cheap. Which we had, I suppose. But we'd got the loans cheap off ourselves. What you have to remember is that the selling of the loans to Nama caused €40bn in damage to the banks' balance sheets, money we had to put into the banks. So when Nama talks about making a profit, it is a very selective reading of the word "profit".

We have already accepted a loss of €40bn on Nama. The most we hope for now is that we get back most of the €32bn that's left. That's all Nama is looking for too. In reality, Nama, though it denied it on Friday, has effectively written off more than half all the developers' debts.

Also you should note that Nama's €500m profit for 2011 does not include impairments. In other words, the fall in the value of Nama's portfolio of property/loans this year needs to be taken off that €500m "profit". So if you include impairments, the profit figure is very different -- and, let's face it, given that Nama is essentially a giant property company whose business is property and property loans, then it is ludicrous to leave out annual losses on property from its profit figure. And one would have to suspect that the annual losses on a property portfolio of €30bn are going to be substantial. Even if you take into account that a lot of the Nama loans do not relate to Irish property, even London, property's last great hope, isn't booming like it was anymore. So if we, and Nama, are to be honest about it, there's going to be a hell of a lot of further impairment of those loans this year.

But, surprisingly, Nama's biggest problem is not that it is losing fortunes of money. You could say that Nama, by definition, is bound to lose money, it being essentially a property company. Indeed, you could say that we had accepted that that would be the case. The main problem with Nama is that it is not doing what it was supposed to do in return for us losing all this money. In fairness, if we just wanted to lose money on property and property loans, we could have just left them all in the banks and allowed the banks to lose the money on our behalf. But we moved the loans into Nama because it was supposed to give us a functioning banking system.

That, of course, has not happened. Now, Nama and its supporters will say that that is because the problems in the banks were far worse than anyone realised. Which is a fair enough answer. But it still doesn't change the fact that Nama has not served its primary purpose. So what is the point of it?

On the Prime Time show the other night Peter Bacon, the man who invented the notion of Nama, was just one of the people who pointed out that Nama has now become essentially a debt collecting agency. This is not what he envisaged. The clue, you see, was in the name -- National Asset Management Agency.

Again, you have to wonder, if Nama is just about collecting debts, then why didn't we just leave all those property loans in the bank and leave them to collect the debts. It would have saved us all the palaver of Nama, which is going to cost €2.5bn in professional fees alone over the course of its lifetime, and God knows, the banks might have been better at collecting money than Nama, if they found their survival was at stake.

And of course not only is Nama a big secretive quango which tells the Government where to go if anyone tries to find out what it's at, and not only has it failed to achieve its purpose, rendering it pointless, it is also threatening to slaughter the property market not only here, but, according to some reports, in London. You can be guaranteed that not a screed of property has moved here since Nama announced that it would be coming into the residential market this autumn with a built-in guarantee against 20 per cent more of a drop in property. You'd be mad to be buying from anyone else.

Indeed, in general now, it seems that the other side of Nama's business, apart from debt collection, is flogging property, and flogging it cheap. So instead of managing property Nama is conducting fire sales to get cash in.

Again, you have to wonder if this isn't something the banks

couldn't have done themselves if that was what we wanted. But then, we were told that fire sales were explicitly what we didn't want.

There are other issues too. On one hand there is the alleged virtual terrorism of some developers and their families, and the destruction of developers who think they could have paid back their loans if left alone.

On the other hand there is the fact that some developers, while being effectively forgiven hundreds of millions in debt, are being paid fat salaries by Nama to work out their loans. In a country where the little guy loses his house if he can't pay his little loans, and where we can't afford debt forgiveness for the little guy, this is a bit hard to swallow.

There is also the fact that developers are increasingly going off to the UK and bankrupting themselves, not exactly the ends of the earth to where we were promised Nama would follow them, but apparently far enough to get off their debts scot free.

And that's all before we even get into the dodgy paperwork on huge chunks of the stuff Nama took in in haste.

In short, Nama is a giant, big, fat ever growing Orwellian nightmare.

And if Nama is now pointless, why is it still there?

Peter Matthews said on Prime Time the other night that it could be unravelled very easily. But don't you know it won't be? Instead it will trundle on, providing plenty of highly paid jobs for quango merchants in the plush offices that Nama showed Prime Time around the other night in a kind of a bizarre Hello!-style, 'at home with Nama' feature. It will trundle on, pointless but potentially very dangerous, the biggest quango ever, a state within a state, answerable to no one.

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Landlords have lessons to learn about renting to students | The Post

Over the next few days, landlords and third-level students will shake hands in their thousands and swap large deposits for front-door keys, before the nation’s colleges and universities re-open later this month.

More than 250,000 students will begin or resume their studies at 40 colleges nationwide and more than 80,000 college-goers will spend the coming academic term living in private rented accommodation. But are landlords getting the best value for money and protecting their valuable investment in a sector where they are often painted as villains fleecing hapless and innocent students?

For John Leahy, a Dublin-based landlord and founder of the website, last week’s protests by the Union of Students in Ireland (USI) about ‘rogue landlords’ unfairly withholding deposits was both predictable and disappointing.

‘‘In fact, if you look at the hard facts, according to PRTB [Private Residential Tenancies Board] data, in 60 per cent of cases where a dispute has arisen, the PRTB has decided that the landlord was correct to retain some or all of the deposit," he said.

Leahy is busier at this time of year, due to what he called the ‘‘seasonal and proportionate’’ number of issues which arose as landlords and students prepared to sign leases.

Excluding the summer months, the student rental market represents roughly a third of the total private rented housing market, and problems arise mostly at the beginning and end of this nine-month period.

‘‘There is a core of key concerns [among landlords]," said Leahy. His website offering advice and a forum for discussion among landlords gets 40,000 visits per month.

‘‘Firstly, for landlords who are thinking of renting to first-year students who have never previously lived outside the family home, it’s important to properly assess the risks associated with renting to this group," he said. While some first year students will cause no hassle for their landlords, others may cause their landlords considerable headaches.

‘‘Some first-year students will make new friends and decide midway through the college year that they would like to share with someone else; or they will drop out of the course or they will simply fall out with their fellow tenants and want to move elsewhere," he said.

‘‘What is important for a landlord to explain from the very start is that under the terms of a contract, each tenant is both jointly and separately liable for the rent. It is not okay to say to a landlord, ‘Well, Mary has left so now we’re only going to pay three-quarters of the rent’," he said.

Maura O’Neill, accommodation and student activities officer at UCC, said that first-year students may be better off living in ‘‘structured accommodation’’.

‘‘For first-year college students, I advise parents and students that it may be best to live in digs with a family or to live in a student complex, for the first year at least," she said. Leahy said that many landlords would perceive first years to be ‘‘higher risk’’.

‘‘Generally speaking, those who are further into their time at college tend to have settled down a bit; the novelty of being away from home and the freedom that that entails has worn off," he said. He advised landlords to always insist upon a parental first year student to remove the greater risk of them moving out and being left without a tenant and an income.

Another problem which arises is the signing of 12month leases.

‘‘If a student signs a 12-month lease (as opposed to one limited to the college period agreed with the landlord) it is important that they know they remain liable to pay this when the college closes," Leahy said.

‘‘It is equally important that students are aware of their obligations under the Residential Tenancy Act 2004, as are landlords," said Leahy.

For any first-time landlords considering entering the fray as colleges re-open, Thurles-based solicitor Neil JButler advised prospective landlords that they should examine the tax implications of renting a property before deciding to enter the sector ‘‘both from an income tax perspective and also as to whether, by renting the property, you run the potential of losing any capital gains tax exemption that may apply to it’’.

‘‘In all situations of letting property, it is important that your insurance company or broker be advised as to the fact of the letting. This again will minimise the potential for the insurer to decline cover in the event of any claim," Butler said. O’Neill agreed that it was vital for both tenant and landlord to know what they were getting themselves into when agreeing to a lease.

O’Neill’s office has a service level agreement (SLA) with all of the landlords who agree to provide accommodation to the 4,500 students on their books.

Other colleges have established comparable structures or are moving in that direction.

In UCC’s case, they have SLAs covering landlords and rental agencies renting 1,600 houses; 100 ‘‘digs ladies’’; and several dozen student accommodation complexes run either by the college itself or by private providers.

‘‘In addition to requesting that all statutory requirements are met, our service level agreements set maximum rent levels; they also stipulate that all complexes operate to the same set of house rules; and that students who go into digs have clear guidance on what to expect in terms of meals and so forth," O’Neill said.

The college also provides quarterly newsletters to landlords with whom they have an SLA, in which they outline any developments in the sector. They also give out free training and a downloadable list of good management practices.

‘‘Last year there was a big issue with the recall of some products due to the risk of carbon monoxide poisoning, so that is an important update for landlords to have," O’Neill said.

On the thorny issue of disputes between landlords and tenants, O’Neill said that the college had gone to the PRTB to speak up on behalf of both landlords and tenants. ‘‘Most landlords are very good and most students never cause any problems, but unfortunately there’s a very small number of landlords who have bad management practices, and there’s a similarly small number of students who cause no small amount of trouble. We devote a lot of time to these small amounts of people," O’Neill said.

The biggest sticking point between landlords and tenants tends to be the non-return of deposits, where the landlord believes that the student has damaged property or caused more than a fair amount of wear and tear.

‘‘There’s a wonderful tool for landlords now, called the digital camera," said O’Neill. She cited the example of a landlady who had a difficulty with a student after the youngster ‘‘threw a party at which he tore a radiator off the wall of an upstairs room and then just left it there’’. In the end the student paid a considerable sum for both the repair and associated damage caused.

Although it was a major nuisance for the landlady, she had photographic evidence to show that when she rented out the house the radiator was unambiguously affixed to the wall.

Despite photographs being taken, students and landlords will dispute what constitutes ‘fair wear and tear’. Leahy said he had heard of one case where a student punched a hole in a wall during a party and claimed that it constituted ‘‘fair wear and tear’’.

O’Neill also advised landlords to take a utility deposit. ‘‘Arguments over paying for utilities, gas and electricity are often at the heart of many rows, not just between landlords and tenants, but between the tenants themselves," she said.

In the past many landlords transferred the utility accounts into the names of the students and expected them to pay the bill. Worse case scenario, landlords can be stung if the student refuses to pay a bill.

This problem is reduced if the landlord insists on a ‘utility deposit’ being paid upfront and then proceeds to invoice the students for the utility costs as they arise. If they refuse to pay a bill incurred during their stay, then they could forgo some or all of the deposit, she said.

O’Neill’s office used to deal with as many as eight or nine new disputes every week between landlords and tenants over the issue of unpaid utility bills. Last year she had just two disputes for the whole academic period as more landlords insisted on a utility bill being paid upfront.

The other advice which O’Neill gives to landlords renting to students was to ‘‘set up a direct debit for payments. Never deal in cash’’. She said cash was difficult to trace and could be difficult for a landlord to prove the transaction had occurred.

Disputes are not limited to landlords and tenants. Neighbours living beside student rented accommodation could easily find things to get upset about, and often it was something which could be sorted out with common sense, O’Neill said.

Noise-related issues and the appearance of a rented property are two of the big issues which neighbours complain about. ‘‘Keeping the front of a property clean and orderly is very important for your neighbours," O’Neill said, who also advised landlords to carry out an intensive round of inspections at the start of any lease. She advised landlords to give their phone number to neighbours and assure them that if there was trouble, they would respond to them. ‘‘I say to landlords; it’s about managing relationships. If neighbours feel they are being listened to and heeded, that’s worth a lot."

Despite the quality of properties improving ‘‘dramatically’’ in the past ten years, O’Neill said she still encountered poor-quality rentals. As recently as last week, she inspected a property which had not been cleaned since its last occupants had vacated some months before. ‘‘The bathroom still had items belonging to the previous tenants and rooms weren’t cleaned," she said.

The economy is causing further difficulties for the market. The student rental market was ‘‘highly fluid and ever-changing’’, according to O’Neill, who said she had noticed that a significantly higher number of first-year students were not entering rented accommodation this year - opting instead to commute from home. She said commuting times were growing as students sought the cheapest accommodation they could find, a voiding the premium which might attach to a property located close to college.

‘‘Price has become a major issue. People do not have the money like they had before, and they’re opting to travel farther to get the best value or to stay at home and get the bus or drive to college," she said. This has led to a decline in demand for digs and for student complexes.

Top ten tips for third-level landlords

1. Get and check written references – if renting to first-time students with no previous renting history, request a written parental guarantee to cover payment of rent and breach of lease terms.

2. Use a good lease agreement that complies with the Residential Tenancies Act 2004.

3. Prepare an inventory of contents that lists, in detail, the contents of the property and the condition they are in at the time of rental. The written inventory should be supported by dated digital photographs.

4. Inspect the property every three months at least. Carry out an intensive period of inspections at the start of the tenancy to iron out initial problems.

5. Provide neighbours living beside your rented property with your contact phone number or email and keep them informed of how you have handled any complaints they have.

6. Keep the exterior of your rental property in good condition and require your tenants to do likewise.

7. Register the tenancy with the Private Residential Tenancies Board. This is a legal requirement. It costs €90 to complete the registration, which must be done within a month of the commencement of the tenancy.

8. Ask your tenants for a utility deposit, some or all of which you can retain if the tenants leave you with outstanding gas or electricity bills; or alternatively install pre-payment meters which means they pay for energy as they use it.

9. Contact colleges close to where your property is located; they may have service level agreements which provide added protection and clarity for you and your tenant if they are a student attending that institution.

10. Avoid dealing in cash; set up monthly or weekly direct debit transactions instead. It is another form of evidence to demonstrate whether an agreed payment has been made or not.

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OECD calls for greater regional investment -

By John Mulligan

Monday September 12 2011

New policies need to be introduced to ensure economic growth in Ireland is unlocked across all its regions, senior officials from the Organisation for Economic Co-operation and Development (OECD) will argue in Maynooth today.

Members of the global think-tank that represents the world's richest nations will insist at a conference in the town's university that the Government's 'smart-economy' drive must deliver development opportunities to regions across Ireland.

The OECD's head of regional development, Joaquim Oliveira Martins, will claim that such a strategy will be vital if a major shift in the focus for the country's economic fabric is to be successful.

"Rural areas are experiencing a decline in traditional manufacturing employment while the smart economy, or knowledge-based jobs, are becoming increasingly concentrated in a select number of urban centres," warned Chris Van Egeraat, of the Irish branch of the OECD's regional studies association.

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Negative equity insurance is not the answer | Business |

Negative equity mortgages are slowly creeping into the Irish property market to try and help families unable to sell up to move house.

But the deals are private and the banks certainly don't like admit they are doing them.

Now along comes an insurance company with a "negative equity insurance" product to try and help sellers shift property at a time when prices are still falling.

Financial services company IFG reckons its product will enable home-buyers insure against a drop in property prices.

Under the scheme the seller would forego some of the cash proceeds of the sale and lodge them in a trust which would be paid out to the buyer in the event of a property price fall.

So, if for for instance, a customer bought a house for €200,000 (£173,000), 10% of the amount paid would be held in trust for between one and four years. If the value of the home drops by 10% by the end of that period the money would be taken from the trust and paid out to the buyer.

Clever people over at ING. The risk is shouldered entirely by the seller - if, for example the property falls by €20,000, the vendor will forego that money.

"The vendor has to fund this out of their own cashflow," says Karl Deeter of Irish Mortgage Brokers.

So it will only suit those that have a very small mortgage - mainly older people and those that bought long before the peak - because those are the only ones who will make a profit on their property sale.

Deeter is sceptical the insurance is the way to kick-start the moribund Irish market.

"It's part of the general medical box but it's not the cure," he says.

Deeter is of the view that the government needs to bring in a personal insolvency laws urgently, like Chapter 13 in the US AKA, "wage earners bankruptcy".

Both the UK and the US have long treated personal insolvency in a non-judicial way unlike Ireland's whose ancient bankruptcy laws which don't release people from their debts for 12 years (in the UK, it's one year),

So why, after three years, of a recession, isn't there so little political will to follow suit?

The bankruptcy laws will be changed within the next six months to enable bankrupts to be discharged of their debts in five years instead of the current draconian 12. But that is not a solution for those whose outgoings are outstripping their income on a monthly basis because of pay cuts or mortgage interest rate hikes.

Chapter 13 is an option for consumers who cannot repay their debts as scheduled, enabling them to repay all or part of their debt at a rate they can afford with a new repayment plan.

It helps people avoid repossession; extend other secured debts over a period of three to five years; and gives them protection against other creditors. During the repayment period, creditors are barred from pursuing collection or contacting the customer directly.

Instead all payments go through an appointed trustee who then distributes the money to creditors on a pro rata basis.

Under the terms of the IMF/EU bailout, the Irish government is obliged to overhaul Ireland's personal insolvency laws by March 2012. And there's the rub. The government's reforms are a result of external pressures and not a recognition that personal insolvency is an everyday part of capitalist economies, recession or no recession.

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Life in Nama limbo | The Post

Life in Nama limbo

Three big-name property developers who were once flying high but now find their fates inextricably linked to the Nama juggernaut tell Ian Kehoe what they think of the agency’s approach.

The figures are familiar at this stage: 850 borrowers who got 11,000 loans totalling more than e70 billion. Those loans have been transferred to the National Asset Management Agency( Nama) for just over e30 billion, a recognition that the properties behind them are worth an average of just over 40 per cent of what the banks originally thought.

But behind the staggering numbers of Nama are the developers who borrowed big and built big during the boom, and have now either been forced to adapt to Nama or get left out in the cold in the bust. Since its establishment, Nama has been dealing with these developers, with varying levels of success. Its immediate focus has been on the top 180 developers who, Between them, borrowed more than e62 billion. The remaining 670 ‘‘smaller’’ borrowers are being handled by the banks, but they remain debtors of Nama.

All the developers have been told to submit business plans to Nama, outlining what assets they intend to sell and how they propose to payback their debts. If a developer’s plan is accepted, he could be paid a salary- most are being paid between e75,000 and e100,000 a year - and a cut of future profits.

If not, a receiver will be appointed over the assets behind the loans, giving Nama the right to sell the properties and recoup some of what is it owed. But what is life like in Nama for developers? And what if it decides to put them out of business?

Ray Grehan

‘It’s like a death in the family’

From his beginnings as a tiler, Ray Grehan went on to become a well-known figure in the Irish property scene, building a string of residential and commercial projects across Ireland and Britain.

In 2005, he broke Irish property records when he bought the former UCD Veterinary College site in Dublin 4 for e171 million. The two-acre site remains undeveloped to this day, and Grehan’s company, Glenkerrin Homes, has had debts of e650 million transferred to Nama.

Last March, negotiations between the agency and receivers To Grehan’s property empire. It has since taken a court case against Grehan and his brother Danny, demanding repayment of e270million-worth of loans over which they had given personal guarantees.

Despite the public falling-out with Nama, Grehan said he still did not know what went wrong.

‘‘We are still baffled to know what happened. We still have not been told why the receiver was appointed,’’ he said. ‘‘The explanation we got was that we did not sign new loan documentation that they issued us in Britain. Our advisers said it would take six weeks to go through it. Within a few days, they had appointed a receiver.’’

Nama will now sell Grehan’s assets in a bid to recoup the e650 million owed. If there is a shortfall, Grehan will be personally liable, but he believes Nama would have fared better by keeping him involved.

‘‘We have worked hard to maintain the value of our portfolio over the last few years,’’ he said.

‘‘The week they appointed the receiver, I had just done a deal for our Crowne Plaza hotel in London for e83 million. I am told now that they may not get that amount for it, and that the deal has fallen through.

‘‘We had another deal in Canary Wharf. We were to achieve e45million for apartments. I am told now that they are on the market for between e34 and e38 million. I am not sure of the rationale where Nama is coming from.’’

Grehan said his property portfolio had decreased in value by between e10 million and e150 million as a result of the receiver being appointed by Nama.

‘‘To spend 30 years in the property business and build up a portfolio, and work seven days a week and long hours, and suddenly it is taken away from you - it’s like a death in the family. It is worrying and of course we are concerned.

‘‘Thankfully, we will pick up the pieces. We are young enough to pick up the pieces, and we have the skill set, and we will go forward. Not in Ireland - we will probably have to go abroad to get the contracts and use the skills we have to the best of our ability.’’ Grehan added that Nama had taken away his incentive to return to Ireland and pay his debts.

‘‘The opportunity for us to pay back our debts has been taken away from us [when Nama appointed the receiver], at the loss of the taxpayer. Had we been left there, we would have paid off the bulk of our debts over the time period of the MOU [memorandum of understanding with Nama],’’ he said.

‘‘I am starting from scratch. I am prepared to do that. Hopefully, we will be successful wherever I end up. It will be sad if we can’t bring money back into the economy and invest here.’’

Grehan said there were major doubts among property developers about Nama’s performance and ability.‘‘ We have a civil service bank running the property portfolio in Ireland,’’ he said. ‘‘Equally, the banks have been run by the state. There is a concern that will stagnate the markets for the next two decades, until someone comes forward and tries to untangle this web.’’

Niall Mellon

‘There is nothing to be gained from being vindictive’

A household name for his charity, which builds houses for the homeless in South Africa, Niall Mellon is also a major developer, with most of his projects in Britain.

He has had loans of around e300 million transferred to Nama, and is still in negotiations with the agency about his business plan. Mellon has sold off assets and moved his family to a smaller home, but believes that Nama and the banks must write off debts on a large scale for developers and struggling home owners.

‘‘The single biggest problem in Ireland at the moment is not allowing debt forgiveness on a large scale,’’ Mellon said. ‘‘Ireland is not going to begin to heal until we draw a line in the sand.

‘‘We have had a systemic collapse, and now we need a systemic response. We can’t go around and negotiate individually every person’s loans. We need large-scale solutions and one that will incentivise people to pay back loans.’’

Mellon said it was ‘‘too one-dimensional’’ to say that developers borrowed too much money, adding that the developers had generated economic activity during the boom. ‘‘We need these companies to help rebuild out of the ashes,’’ he said.

According to Mellon, there was an early misconception that Nama was going to solve the entire property and banking crisis.

‘‘Now there is a much more mature viewpoint that the Central Bank was not doing its job. Then, in turn, the banks were not managing their own liquidity,’’ he said. ‘‘Those two things caused the collapse of the Irish property market.

‘‘People might not look at it this way, but the property development companies are as much victims as are the thousands of people who are now in negative equity.’’

Mellon said that Nama was ‘‘working damn hard’’, but needed to move more quickly on deals. Instead of negotiating with each company individually, he said, Nama should offer a ‘‘menu’’ of choices to developers to choose from.

‘‘We are dealing with private-sector development companies whose reason for being in existence was to make profit. While that has become a dirty word, you have to remember that the reason for being in business is profit,’’ he said.

‘‘And these companies really have to have some incentive to get up early in the morning, travel all over the globe and try and influence these famous private equity companies to buy distressed Irish assets.’’

Mellon also wants Nama and developers to work together, rather than against each other. ‘‘It is very hard to work in a process which starts off in a process of mistrust and private investigators and a determination to follow developers to the ends of the earth,’’ he said. ‘‘I believe, at this point, Nama realises that property developerswere decent people who were generating billions in economic activity in Ireland, employing hundreds of thousands of people.

‘‘Almost everyone in Ireland benefited in someway from the boom times. There is nothing to be gained from being vindictive. We need to sit down and figure out the best way of getting these loans paid back.’’

Michael O’Flynn

‘We’re finding a way to go forward’

Cork-based O’Flynn Construction is one of Nama’s biggest clients, with debts reported to be more than e1 billion.

It was one of the top ten borrowers to have loans transferred to Nama, and founder MichaelO’Flynn is finalising a deal to work with the agency. He said that working with Nama would involve major changes to his business, although he was confident that he would repay all his debts.

‘‘We spent a long time preparing a business plan that dealt with all aspects of our business, and in relation to every area that we operate,’’ said O’Flynn, who has agreed to sell various investment properties.

He said that dealing with Nama was extremely different from dealing with his former bankers. ‘‘Life is difficult in Nama for anybody in there - I think it’s probably meant to be difficult,’’ he said. ‘‘For those of us who are working with Nama, we’re finding a way to go forward. It’s not like being in a bank, but it’s not meant to be.’’

However, he expressed concern about Nama’s ‘‘overzealous approach’’ to paperwork, which he said often resulted in delays and undue expense.

‘‘I think Nama’s attitude is ‘Let’s redo everything in such a way that we can go forward with absolute certainty’. I think that’s a very expensive way of doing it, but Nama’s attitude is that it’s cheaper than trying to investigate every bit of everybody’s [property] title or security situation,’’ he said.

O’Flynn also called on Nama to provide increased funding to the property industry. With no banks lending for property, he said, it fell to Nama to advance finance to complete projects and start new developments.

‘‘I think Nama needs to look more at resolving a functioning property market, because if you’re not going to get a return to a functioning property market, you’re not going to get a successful Nama A successful Nama is one that allows the industry to recover, that allows capital to get into this country. The funding model in Ireland is broken.’’

O’Flynn said the funding crisis would become more marked in the next two to three years, when the economy started to recover. He said the lack of finance would dampen growth and hinder Ireland’s ability to attract investment.

‘‘You can’t just say tomorrow that we don’t need anymore developers. You always will need development, you always will need developers, we just need to do our business a little bit different,’’ he said.

In relation to his debts, O’Flynn said: ‘‘We’ve always been used to owing money. To people in my industry who’ve worked hard and grown companies, owing money is not the issue. What has become a burden for us in recent years is that there’s no market.

‘‘It’s very difficult if you owe money on the one hand, but there’s no market on the other hand - it’s like a shop where there’s nobody coming in the door.’’

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Commercial debt judgments down 90pc as activity tails off -

By Dearbhail McDonald, Legal Editor

Monday September 12 2011

The value of commercial debt judgments registered in the courts in Ireland has collapsed by more than 90pc in just one year.

New figures obtained by the Irish Independent revealed that there had also been a steep fall in both the volume and value of unregistered judgments.

Registering judgments in court is usually the last port of call for creditors who are pursuing unpaid debts.

The falls reflected the enormity of the decline in commercial activity, especially in the property sector, according to industry analysts.

In the first eight months of this year, the value of commercial judgments registered through the courts was just €30.3m, compared to €137.6m in the corresponding period last year.

The value of debts collected by state-owned banks was down by some 40pc, as registered consumer and commercial debts fell by some 46pc, from €6.67m in the first half of 2010, to €3.08m in the first half of 2011.

Banks have been the most active by volume, with the figure up by more than a third.

Credit unions have also intensified the pursuit of hundreds of borrowers who failed to adhere to repayment schedules.

The value of the unpaid credit union debt has increased by two-thirds, from €5.1m to €8.6m, according to latest data compiled by BusinessPro, the debt reporting and credit bureau company.

Greg Connell, managing director of the Irish Fraud Bureau and a non-executive director of BusinessPro, which publishes 'Stubbs Gazette', said that the falls in the value of commercial debts was evidence that, in general, "most of the bad news" has already been witnessed through writedowns and high-profile court actions.


"We may be at the tail-end of that initial financial rush to judgment," said Mr Connell, who added he had mixed views about the results.

"We have not seen NAMA pick up where the banks have left off," he pointed out.

"Until we see what NAMA has done with the poor-quality debts that have been transferred to it, it is hard to draw firm conclusions."

Commercial lawyers, who enjoyed a surge in work in recent years as banks and other creditors tried to recover their debts in the courts, said the lack of business disputes unrelated to debt and lodged in the courts was actually a worrying sign as it indicated an underlying lack of commercial activity.

"The Commercial Court was introduced to facilitate economic activity, but there appears to be very little of it," said one senior corporate lawyer.

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Slide continues as building projects come to a near halt -

By John Mulligan

Monday September 12 2011

The embattled construction sector continued to shrink in August, with near-stalled house building and severely contracted civil engineering activities weighing on businesses.

The Ulster Bank Construction Purchasing Managers' Index (PMI) for last month actually rose slightly to 43.5 from 42.1 in July, but the figure still reflects a stark rate of contraction within the sector. Any reading below 50 signals a contraction.

The civil engineering sector recorded the steepest fall in activity, with the rate of decline remaining substantial despite easing since July. Activity on housing projects decreased in August at a faster pace than in July, but the fall was also the weakest of the three sectors.

The index recorded a reading of just 39.3 for the civil engineering sector in August, compared to 36 in July.

John Fahey, an economist with Ulster Bank, said the latest data clearly showed an industry still in a state of contraction.

"However, the PMI did rise slightly in August, for a second straight month, indicating an easing in the pace of contraction in construction activity. In fact, the latest headline activity index represents its slowest pace of contraction on four months."

Mr Fahey added that at a sectoral level, both commercial and civil engineering activity contracted at a slower pace in August compared to July, and with housing, the rate of contraction accelerated last month.

The live register edged higher in August, with 449,600 people out of work. Business sentiment in the construction sector fell to its lowest level since February.

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It's mid-September and it's raining. Intermittent showers, but none the less wet!
Our job means showing property at a time suitable to the client, irrespective of the weather.
I just wish the sun would shine more:)

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Monday, September 5, 2011

Full text of yesterday's 'Financial Times' editorial on Ireland's recovery -

Saturday September 03 2011

Ireland's epic economic binge was so intoxicating that the ensuing hangover was certain to be a long, painful and humbling experience.

Yet there are encouraging signs that the worst is over. Other countries caught in the eurozone's sovereign debt and financial sector turmoil could learn from the way that Ireland is nursing itself back to health.

To be sure, challenges remain. Unemployment is at its highest level since records began in 1967. Financial distress among home-owners is so acute that more than one in 10 mortgages are either in arrears or have been restructured.

Domestic demand is too weak to propel economic growth, and Ireland's prospects for an export-led recovery will be damped by a darkening global outlook. Lastly, Ireland's banks still rely on large cash infusions from the European Central Bank.

Nevertheless, Michael Noonan, finance minister, was justified in telling parliament on Thursday that Ireland had made "considerable progress" in extracting itself from the emergency that forced it last year to negotiate an €85bn international support package.

Wage cuts and price deflation have restored Irish competitiveness. In contrast to Greece and Portugal, its fellow occupants of the eurozone's intensive care unit, Ireland's current account deficit is moving into a surplus.

The rebound is explained partly by the multinational companies, chiefly US-owned, that use Ireland as a European base. But Irish policymakers have played their part, too.

By honouring its promise to the European Union and International Monetary Fund to cut its budget deficit, Ireland is regaining the confidence of global investors.

The Fine Gael-led coalition government earned credibility after it took power in March by swiftly cleaning up and consolidating Ireland's banking sector. Outside assistance has helped: eurozone leaders acted wisely in July when they eased the terms of Ireland's rescue loans.

All this explains why, despite severe debt market turbulence in July and August, Irish 10-year government bond yields have fallen to less than 9 per cent from over 14 per cent.

The patient is not yet fully on his feet. But Ireland is showing that, under the right conditions, recovery is possible. (Courtesy of The Financial Times)

Irish Independent

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Selling takes off in the Fall | The Post

Though it’s still a difficult market, some houses are selling. But how do you sell your home this autumn in the middle of the downturn?

Sale Agreed and Sold signs. We didn’t think anything of them in the boom years, but they’ve been a rare sight across the country in recent times. Home owners today are greatly relieved when, after months, or even years, a neighbour’s weather-beaten For Sale sign is adorned with the word ‘Sold’ in bold capitals.

It means properties on their road are in demand after all. A drive through Dublin’s suburbs suggests a number of properties have indeed changed hands over the summer.

Is this a sign of some much needed movement in the housing market? Perhaps the success of the Allsop/Space auctions of distressed properties earlier this year has stimulated the market. More than €30 million worth of property was sold under the hammer in the first two auctions.

Sellers have their fingers crossed that there is a rise in sales and that buyers are becoming more willing to sign on the dotted line, but all the indicators show property prices are still falling. A decline of about 10 per cent is expected this year. This is likely to continue to deter many potential purchasers.

Estate agents canvassed last week however, said the summer months were surprisingly busy, given that traditionally, the strongest selling seasons are spring and autumn. They said buyers no longer care what month it is when they are genuinely interested in a property.

‘‘Properties are selling," said Robert Finnegan of Dublin-based Vincent Finnegan Auctioneers last week. ‘‘We’re finding plenty of buyers, mainly first-time buyers. It’s all about the price being right - a property has to be competitively priced to find a buyer," he said. ‘‘I can only tell you today that there’s healthy demand for second homes and all that can be is positive."

Many of the agents are hoping, however, that the old norms will apply and homeowners will decide to put their home on the market this autumn, when the children go back to school and the summer holidays are over, as is traditionally the case. They are searching desperately for some new stock to sell. Many of the agencies have been running ads and dropping speculative leaf let s in homeowners letterboxes in the last fortnight offering private consultations and a free valuations.

If want to sell your home this autumn, or unfortunately you have to sell in the next couple of months, how should you go about it? Firstly, you should get valuations from a number of estate agencies before you choose one. But prepare yourself for disappointment - the valuation may not be to your liking.

‘‘If you want to sell your home it’s a no-brainer. It’s all about price,’’ said Felicity Fox of the Dublin city centre agency that bears her name. ‘‘It’s about value for money for the buyers."

She said sales were happening at the lower end of the market and that those sales were happening across Dublin city and county.

‘‘There is no particular area, or areas that are selling better than others . But only those who are willing to sell their home at open market value should attempt to this autumn. They have to be willing to sell it at what it’s worth today,’’ Fox said. Sales at the higher end of the market remain difficult to complete.

When setting the asking price many homeowners want to inflate it to allow room for negotiation with would-be buyers But Robert Finnigan maintains that this is entirely the wrong way to go about it.

‘‘If a vendor puts a house up at €510,000 they think potential buyers will read between the lines and realise they’ll accept less, but that’s not how it works.

‘‘If potential buyers have an email alert set up with an upper limit of €500,000 then they won’t get notified that the property has come up for sale. They won’t see the listing for the property, never mind consider it. A lot of people rely on technology now. It’s hugely important to selling your home."

Finnegan maintains using technology to your advantage is of the utmost importance in a downturn. Using professional photographs is vital to securing a sale.

Poorly taken photographs uploaded online really irritate househunters.

Not including photographs of the interiors also raises suspicions among savvy potential buyers. They immediately jump to the conclusion that the property is in need of complete refurbishment. ‘‘It’s all about price and presentation. If a property isn’t smartly presented it’s not going to sell as quickly as one that is. People make a decision usually on first impressions. They are creatures of habit," Finnegan said.

If a property doesn’t look smart in the photos they’re not going to view it’’, he said. ‘‘People buy on emotion a lot of the time, so vendors need to do their utmost to ensure their home is neat and tidy."

Darren Chambers, Lisney’s branch manager in Drumcondra, north Dublin, said the average 20 per cent drop in asking prices in the last 12 months has fuelled sales in recent months. ‘‘It’s a massive drop in a year and we’re finding there is an appetite to buy."

He warned vendors not to price the property too high. ‘‘You want a property to sell in the first six to eight weeks. For a successful sale it’s critical that you’ve got offers in the first few weeks. Price reductions tend not to be enough to sell properties. By the time vendors actually agree to reduce the asking price, too much time has passed and they should be reducing it again," he said.

The agents said there was no rhyme or reason as to why some properties were selling compared to others, except for the discrepancy in asking prices.

Gunne Residential’s managing director Declan Cassidy said if the price was right over the summer, properties were selling. ‘‘Some properties have sold within two to three weeks if they’re priced right," he said.

Cassidy, who runs the firm’s Fairview office, said they had sold a mix of properties in the areas of Fairview, Marino, Drumcondra, Killester and Clontarf.

In Marino and Fairview, he said first-time buyers were purchasing three-bedroom terraced houses within walking distance of East Point Business Park and the city centre for less than €200,000.

He said little had changed since the start of the year in the buyer demographic. ‘‘At least 50 per cent of all the properties sold or sale agreed on their books in recent months were first-time purchasers," he said. Trader-uppers are the second largest segment of the market.

The reported improvement in sales is not just a Dublin phenomenon. Catherine McAuliffe, director of Savills in Cork, said there was ‘‘huge activity’’ in the last couple of weeks. ‘‘We’ve had an awful lot of offers, there’s a definite appetite from purchasers who have been looking at the market," she said. ‘‘There’s a realisation that things are not going to change."

The only difference between Dublin and Cork, McAuliffe said was that the capital had begun getting offers earlier in the summer than Savills’ Cork office, and that a lot of their sales were agreed.

‘‘We’re slightly behind. We’re getting the bids now," she said, but added that it was a challenging market and that it was still difficult to get sales over the line. ‘‘There are so many obstacles now from the banks, engineers, surveyors, and solicitors; it takes much longer to finalise."

Depending on your circumstances, selling at auction rather than by private treaty may be a worthwhile option. A feature of the market now compared to the boom time is that cash is king. All of the agents agreed that the market is being driven largely by cash buyers.

Felicity Fox said more cash buyers had been viewing properties and making bids in the last fortnight to three week s than at any other time since the start of the year.

‘‘They’d rather have the bricks and mortar than leave it in the bank. There’s uncertainty there with the banks," said Felicity Fox.

The majority of the buyers at the Allsop/Space auctions were cash buyers and the same is expected at their next auction on September 23 when 74 lots, a mix of residential and commercial properties, will go under the hammer.

Auctions can also be a better option for those requiring a quick sale.

Executor sales and sales by investors can be finalised in much quicker period than by private treaty in most circumstances.

The day before the Allsop/ Space mass auction, Gunne will hold a small auction of two properties, one in Ballsbridge, and the other in Sutton.

Declan Cassidy said that in many cases properties are auctioned because the owners are ‘‘fed up and want them sold’’ or the properties were ‘‘sale agreed a couple of times and fell through’’.

Selling at auction is also an indication that the owners are serious about selling.

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