A Fine Gael TD has called for developers to include a protective clause in all contracts to ensure buyers of new homes can’t lose their deposit.
Dublin North West TD Noel Rock has sent legislation to the Oireachtas which will be presented to Dáil Éireann in the New Year aiming to protect all first time buyers.
Deputy Rock said:
“As it stands, should a buyer’s loan approval fail, they risk losing their deposit which could be up to €20,000. Buyers could stand to lose their deposit if they do not have this clause included, which in the last year more developers have become reluctant to include. It is scandalous that we are allowing developers to add a needless extra level of stress on a purchaser as they see fit.
We need to do what is right by the purchaser in such cases and we need to act now to help them. We are allowing developers to get away with, as some might see it, daylight robbery. It’s quite clear that the market is moving in an upward direction, so holding onto a prospective buyer’s deposit and cashing in on a likely higher house price in the future strikes me as an advantageous situation for developers.
The reality is, they should either be accepting deposits in good faith, or not accepting deposits at all without loan approval- one or the other. They should not be pitting people, who are mostly first time buyers, against each other by enticing them to make offers without approval, while simultaneously not offering them the ability to redeem their deposit should it not work out.
Many new builds going on the market may not be ready for some time, in some cases up to two years. However, loan approval may only last for a period of 3 to 4 months. It makes absolute sense that we legislate to protect the purchaser and ensure that we make process as smooth and remove stress where possible.
When the Dáil reconvenes, I will present a Bill to the chamber and start working towards a fairer housing market for the purchaser and for all first time buyers. I appreciate this is far from the most pressing matter in the housing crisis but the Government must ensure that it protects the buyer, prioritises fairness and doesn’t let hard working people – mostly first time buyers – face the prospect of losing a deposit for which they have worked so hard to save.”