Risk to €31m Cork social housing scheme because of volume clause
Posted on 15th February 2023 at 22:07
Court heard dispute has raised a possibility that the council will pull out of the whole project
A Cork resident who sold development land next to his home in 2006 has claimed he is now entitled to additional money because of the number of houses planned for the site. The Commercial Court heard the property is earmarked for a €31 million scheme of 80 social homes, while Niall O’Donovan of Glyntown House, Glyntown, Glanmire has asserted that the 2006 sale deal included a condition that if more than 12 houses were built on the land, he would be entitled to more money.
Niall O’Donovan, of Glyntown House, Glyntown, Glanmire, Cork, has asserted that the condition in relation to 12 houses remains in force over the land, next to his home, which he sold to a developer in 2006. Ownership has passed through a number of other hands since the 2006 sale.
However, an investment company that later acquired the land argues that the 2006 sale conditions were personal to Mr O’Donovan and the developer to whom he sold the land, Kieran Murphy.
Berrings Property Investments Ltd, the current owner of the land, says that when it was sold by Mr O’Donovan, the obligations imposed by special conditions in that 2006 contract were not registered as burdens in the Land Registry.
Berrings’s director, Ted O’Connor, said in an affidavit that Mr O’Donovan had been told in correspondence that the obligations in the 2006 contract were personal to him and the then purchaser.
The land was later taken over by Name from Mr Murphy, who borrowed to buy the land, and eventually, in 2017, it was sold to Berrings.
In 2022, Cork City Council advertised its plan for 80 social housing units on the land under the Part 8 procedure which allows local authorities to build without recourse by members of the public to an appeal to An Bord Pleanála.
However, the public is entitled to make submissions in the Part 8 process and Mr O’Donovan did so. In his submissions, he warned that the special conditions under which he sold the land in 2006 would be strictly enforced.
Mr O’Donovan said those conditions included an “overage” clause. Such a clause means that if more than an agreed number of houses (12 in this case) were built on the land, the seller would receive additional money if the value of the land had increased.
The council, which has received approval from the Department of Housing, Local Government and Heritage for €31 million to buy and construct the houses, expressed concern about Mr O’Donovan’s submissions, which also made assertions in relation to rights of way.
Berrings then wrote to Mr O’Donovan asking him to acknowledge the lands were unaffected by the obligations imposed in the 2006 conditions.
He did not reply and, Berrings said, as a consequence, it was left with no option to bring proceedings.
On Wednesday, Paul Gallagher SC, for Berrings, asked Mr Justice Denis McDonald to admit the case to the Commercial Court list as it was an urgent matter.
He said Mr O’Donovan has not appeared in court but has been served with papers. Counsel said the dispute has raised the possibility that the council will pull out of the whole project.
The judge was satisfied it was a case of significant commercial importance that should be determined as early as possible.
He granted leave to Berrings to bring an application for judgment against Mr O’Donovan in default of him appearing later this month.
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