If you are an unfortunate homeowner living in one of the estimated 621 unfinished housing estates around the country, what can you do to get the services and facilities on the estate completed?

If your estate developer is now part of Nama and is may be earmarked some day to be pulled down, what are your rights? What sort of compensation can you expect, if any?

The problem of unfinished estates, where either the developer has gone bust and is no longer around to complete the houses, drains, footpaths and lighting, never mind removing rubble, is a huge one.

A 2007-2009 study by the National Institute for Regional and Spatial Analysis created a map of these estates with the largest numbers clustered in the north west and border counties, the north east and around Cork, but nearly every county was represented.

The householders who find themselves living in such estates are in a sort of property limbo.

The local authority is only obliged to take over the services once the developer has sold the last unit and the common areas are transferred to the owners.

Where the estate is not finished and properties are unsold because the developer has run out of money, the council is restricted to waiting until the five year planning permission deadline has passed before they can move against him.

According to the National Consumer Agency, much depends on what is in “your contract to purchase and the management company’s Memorandum and Articles of Association”.

It also states: “If you buy and live in your unit before the completion of a development, you may have little or no say in how the development is being managed until completion…If you have concerns about services that are or are not being provided by the developer, you should examine what legal options are open to you under your contract with the developer.”

Most contracts, say solicitors, unfortunately allowed developers huge legal discretion in the way they made changes to or even finished an estate. “I always insisted those clauses be removed or my client not to purchase,” one solicitor said.

If the developer is still in business he can seek extensions to the five year planning rule, with the local authority having seven years in which to pursue the developer in court (assuming he hasn’t gone bust.)

Local authorities believe there is little point in trying to draw down insurance bonds, especially if the builder is in receivership or liquidation and has court protection.

Meanwhile, if he goes bust, other creditors – the Revenue and banks – will have a claim on any funds long before the Council or homeowners.

Housing experts such as Maynooth Professor Rob Kitchin (co-author of the ghost estate report) believe that those viable estates taken over as part of the Nama loan purchase process should be completed. Existing residents and future purchasers would both benefit while bulldozing should be a “last resort”.

But how long should anyone in an unfinished, badly lit and increasingly bedraggled or unsecure estate have to wait?

Such a person’s options would appear to be very limited:

* You can keep paying your mortgage and maintain your property in the full knowledge that is worth less than you paid for it, and unsaleable until the estate is finished or taken over by a Nama like agency.

* You can stop paying your mortgage in the knowledge that you will not be pursued by the bank’s legal department for at least a year, but at a serious cost to your credit record, which will affect any attempt at other credit facilities. This could lead to foreclosure.

* You can hand over the keys to the bank and move to an affordable rental premises, acknowledging that the bank can pursue you for any shortfall if it is sold at a loss. Your credit will be seriously impaired.

“If Nama takes over ghost estates which they do not finish and decide to bulldoze, they may have to use a compulsory purchase order-type vehicle to buy out any owners or owner/occupiers,” a solicitor told me.

“Usually, a CPO is priced at the cost to purchase an equivalent size/value property elsewhere. But the huge fall in property prices means the owner would end up being offered the market value and they would still have to pay the shortfall on their original loan to their lender/Nama.”

A financial advisor described walking away as “the nuclear option”. He doubted that they would write off the balance of the loan. Always consult a lawyer before taking such a drastic step.

The advisor also provided a glint of hope should Nama decide to bulldoze the worst of the ghost estates.

“The banks are much happier with you in the property, even an alternative one, even if the mortgage remains in arrears, because it is still as an asset on their books,” he said.

“Taking back the keys means it’s now a bank liability. Chances are, by agreeing a market price deal you will still carry the total original mortgage debt, but at least you have a roof over your head, in a better place than the ghost estate.”

Next week: How much longer before the government’s Expert Group produces its recommendations for the circa 30,000 homeowners in mortgage arrears?

Email: jill@jillkerby.ie