The Strand apartment complex in Limerick city
RTÉ journalist Brian O’Connell reported on Today with Sean O’Rourke that the tenants of up to 70 apartments in the Strand apartment complex in Limerick could be facing eviction.
The Strand apartment complex – which includes upwards of 200 apartments and the Limerick Strand Hotel – was built in Limerick in 2007 by Galway developer John Lally’s Lalco Holdings.
In 2014, the hotel was sold to US billionaire John Malone.
At some point, the debts related to the apartments went into Nama.
Nama, in turn, sold the debt on to US vulture fund Oaktree.
Oaktree has now directed Sova, a subsidiary of Lalco Holdings, to sell the properties to repay the debt.
Because of this, according local Anti-Austerity Alliance Councillor Cian Prendiville, the tenants of 30 apartments in the complex have already been effectively “forced out” while the tenants of up to 70 more apartments may face eviction.
Brian O’Connell spoke to several tenants for his report, including a woman who has been living there for nine years.
In addition, he explained:
“It turns out that the loans attached to the development, as I said, went into Nama. Now, at some stage, Nama sold these loans or this debt onto Oaktree. They’re a US-based capital fund vehicle or so-called vulture fund as we’ve come to know them.
“Sova which is a subsidiary of the original developers [Lalco Holdings], they gave me a comment and they told me that the debt secured against the properties was sold by Nama to Oaktree and it’s Oaktree that have now directed that Sova have to sell the properties to repay the debts.
“Sova, they say, maintains ongoing communication with the tenants. I went back with a follow-up question because what’s all that got to do with the tenants who are in place currently. Why do they have to leave? Just because there’s been a change in ownership.
“And they said, well, ‘unless there’s specific circumstances to the contrary, Oaktree, which is the vulture fund, their view is that the volume is maximised by sale with vacant possession’. So, in other words Sean, they realise that these apartments will make more on the open market if they’re vacant before being sold.
“I’ve heard stories in the last 24 hours, in the last batch of apartments were sold, tenants had to leave, they went back out for rent and they got €400-€500 more a month for them.
“Nama didn’t confirm to me when the loan had been sold or for how much, but a spokesperson pointed out that Nama doesn’t actually own properties and they say that Nama policy is that, where possible, debtors and receivers should avoid seeking vacant possession of residential property but, of course, if a new owner comes in, they have different policies.”
Further to this.
Mr O’Rourke later interviewed Minister for Housing Simon Coveney and asked him about the contents of Mr O’Connell’s report.
To introduce the matter, Mr O’Rourke compared the situation in Limerick to that of Tyrrelstown, Dublin 15.
Readers will recall how last year up to 200 families renting homes in the Cruise Park development in Tyrrelstown faced eviction.
Twinlite – a property company owned by developers Michael and Richard Larkin – had sent letters informing tenants in Tyrrelstown that they had to leave the properties in which they lived, after a Goldman Sachs vulture fund bought an €89million loan, secured on the homes by the Larkin brothers, from Ulster Bank.
Following publicity over what was happening in Tyrrelstown, the so-called Tyrrelstown amendment was added to the Planning and Development (Housing) and Residential Tenancies Bill 2016 before Christmas – to prevent people from being evicted in such situations.
It states that where a landlord proposes to sell 20 or more units in a development – within six months – the sales will be conditional on existing tenants being able to remain in the property unless there are exceptional circumstances.
During debates on this amendment, several politicians appealed for the number 20 to be reduced to five.
Mr O’Rourke asked Mr Coveney why this amendment is failing to protect the tenants of the Strand apartments in Limerick.
Mr Coveney said:
“First of all, we need to check whether it does or it doesn’t. But, I mean, for me, it is totally unacceptable that when one institutional investor sells to another institutional investor or one professional landlord is selling an apartment complex to another professional landlord, that people’s tenancies shouldn’t be protected through that sales process.
“That is the norm in many countries, it’s not the norm in the UK, but it’s the norm in many countries and it should be the norm here. And we have taken advice from the Attorney General to make that happen and that is why, in the rental legislation, which got a lot of controversy and coverage in the build-up to Christmas – we introduced a Tyrrelstown amendment, to make sure Tyrrelstown wouldn’t happen again.
“That legislation has now been passed and the commencement order, for the so-called Tyrrelstown amendment which ensures that, actually, when this type of sale happens that people are protected by law, to stay in their homes, as tenants who are paying their way – that amendment will be commenced next week actually. That’s my understanding.”
“… I listened to your report on the radio, before coming in, and I’ll need more details to be able to give an accurate answer on that because...the legislation doesn’t apply retrospectively because it can’t…”
Listen to the interview with Brian O’Connell in full here
Listen to the interview with Simon Coveney in full here