What is the Affordable Dwelling Contribution?
The Council will provide a contribution known as an “Affordable Dwelling Contribution” that facilitates the purchase of homes by an eligible applicant. The Affordable Dwelling Contribution is the difference between the combined total of the purchaser’s deposit and maximum mortgage capacity (and savings where relevant) and the market value of the home on the date of purchase:
[Market Value] minus [Deposit + Mortgage Capacity + Relevant Savings] = Affordable Dwelling Contribution.
What is the Affordable Dwelling Equity?
This “Affordable Dwelling Contribution” will be expressed as a percentage to calculate the “Affordable Dwelling Equity”, or equity share, that the Council will retain in the home. For this scheme, the “Affordable Dwelling Contribution” is between 15% and 24% approx. of the market value of the homes depending on the successful applicant’s income.
When can the “Affordable Dwelling Equity” be repaid?
It is a condition of this scheme that the Council will register an inhibition on the property equal to the “Affordable Dwelling Equity”, or equity share, representing the percentage discount below market value that the home is purchased for. The “Affordable Dwelling Equity” will in general become repayable upon the subsequent sale of the property or after forty years. The total amount repayable in respect of the “Affordable Dwelling Equity” to remove the Council’s shared equity interest from the property will depend on the future market value of the home and the timing of the repayment(s).
The Council’s equity share in the property must be repaid in full, but the timing of repayment(s) is flexible. Purchasers can decide when to make redemption repayments on the equity share, subject to a minimum repayment amount of €10,000, other than in a case where a payment of less than €10,000 is required to redeem the housing authority’s equity in full, or the equity share can be repaid when the purchaser subsequently decides to sell the property. The Council will keep a record of all redemption payments made by the purchaser, revising the affordable dwelling equity percentage accordingly. When the full equity share is repaid, the Council will discharge it’s in the Registry of Deeds/Land Registry.
Can the Council demand repayment of the “Affordable Dwelling Equity”? (Other Equity Realisation Events)
The Council can demand the repayment of the affordable dwelling equity by serving a Realisation Notice on the homeowner on the occurrence of certain realisation events including:
- a) The expiry period of 40 years without redemption in full of the equity share by the purchaser(s) (which will be the period during which the Council may not realise its equity share other than for breach of other conditions of the agreement).
- b) Where the purchaser(s) commit an act of bankruptcy or are adjudicated a bankrupt.
- c) A mortgagee, incumbrancer or receiver gains possession of the property.
- d) The property is damaged by fire or demolished so as to materially affect its market value.
- e) The property is abandoned or is no longer the principal primary residence of the purchaser(s).
- f) The property is sold by the original purchaser(s).
- g) The purchaser(s) is found to have deliberately misled the Council in respect of any material fact regarding eligibility in making their application.
A Realisation Notice will specify a period (not shorter than three months commencing on the service of the notice) after which the Council will be entitled to realise the affordable dwelling equity. The procedure for this arrangement will be clearly set out in the Affordable Dwelling Purchase Arrangement.
What is an Affordable Dwelling Purchase Arrangement?
The Affordable Dwelling Purchase Arrangement is the legal agreement or contract between the Council and the purchaser setting out the terms and conditions under which the Council provides the Affordable Dwelling Contribution.
Each successful applicant will enter an Affordable Dwelling Purchase Arrangement with South Dublin County Council. This will be done prior to closing of the purchase of their affordable home. The agreement covers the obligations of the purchaser and the Council and makes provision for the registration of the agreement with the Registry of Deeds/Land Registry. The agreement will also set out how and when the homeowner can make redemption payment(s) to reduce the Council’s affordable dwelling equity share as well as the conditions under which the Council may seek redemption of the affordable dwelling equity.
Successful applicants will be required to enter a Contract for Sale with the developer in order to complete the purchase of the affordable home. This Contract of Sale will include all standard conveyancing terms and conditions and the developer with also require confirmation of the purchasers’ Affordable Dwelling Purchase Agreement with the Council.