Croí Cónaithe (Cities) Scheme
The Housing and Sustainable Communities Agency (the Agency) has launched the Croí Cónaithe (Cities) Scheme (the Scheme) whereby the Agency is paying a subsidy to developers of apartments to bridge the viability gap between the cost of building apartments and the market sale price.
The proposed purchasers of these apartments are owner occupiers. As part of the Scheme purchasers will be obliged to enter into a Clawback Agreement which will provide that if the purchaser sells the property within the first 10 years, a clawback will be repayable to the Agency in respect of the subsidy paid towards the construction of the apartment. In order to secure its right to this potential clawback the Agency proposes to register a caution over the purchaser’s interest in the apartment.
The Conveyancing Committee has had a positive engagement with the Agency, with a shared focus on minimising the obligations and responsibilities which fall on the purchaser’s solicitor when acting in the purchase of an apartment in the Scheme. The Agency requests that purchaser’s solicitors advise the Agency’s solicitors of the dealing number when the dealing to register the purchaser’s ownership is lodged in the Land Registry, to facilitate lodgement of the caution. The Conveyancing Committee considers this a reasonable request.
Purchasers’ solicitors will need to familiarise themselves with the Scheme, and the Agency have prepared a Guidance Note. The contract received from the developer’s solicitor will include special conditions relating to the operation of the Scheme, and will include the Clawback Agreement, and a form of statutory declaration to be completed by the purchaser(s).
The Conveyancing Committee is of the view that it is not necessary for solicitors acting for purchasers of apartments within the Scheme to qualify their certificates of title, as the lender will still hold a first legal charge over the property, and the existence of the Clawback Agreement and registration of the caution does not render the purchaser’s title less than a good marketable title.