Dunne case an example of difficulties in unravelling some boom-time deals
NAMA has secured approval from a US court to seize control over bankrupt property developer Sean Dunne’s interest in land worth up to €17m.
The move could pave the way for the development of around 280 housing units in the foothills of the Dublin mountains.
The case is an example of difficulties the agency has occasionally encountered in gaining control of assets due to the manner in which some land deals were conducted during the boom.
Mr Dunne sold the land, comprising 132 acres on two adjoining parcels in Woodstown, Rathfarnham, to Newlyn Woodstown Ltd, a company in the Newlyn Developments group, in 2006.
However, while Newlyn now had beneficial ownership of the lands, Mr Dunne never relinquished the title to the property.
The manoeuvre, known as resting in contract, was not uncommon prior to the economic crash and meant various tax liabilities were not triggered.
The law was subsequently changed in 2013 to partially close off the loophole. But Mr Dunne filed for bankruptcy in the US the same year and the title of the land was never transferred to Newlyn.
Most of the land is elevated and zoned for agriculture as South Dublin County Council is reluctant to allow development on lands over 120 metres above sea level. But a lower-lying section of it is zoned for housing. Plans by Newlyn, as part of a housing development partnership, to build a 394-unit residential development there never got off the ground due to the crash. The partnership was unable to get an extension of planning permission in 2013.
However, according to the Department of Housing’s 2014 land availability survey, the site would still be suitable for around 280 homes.
A number of Newlyn’s loans were transferred into Namaandthe Irish Independent understands the agency is supporting the company and wants it to develop homes at the Woodstown site. Newlyn did not respond to a number of requests for comment.
Nama is now planning to appoint a receiver over Mr Dunne’s interest in the property so the ownership issue can be tidied up.
The agency required approval from a US court to do so because an automatic stay was placed on litigation by creditors after Mr Dunne filed for bankruptcy in Connecticut in 2013.
A successful application was made to a court there by Nama subsidiary National Asset Loan Management earlier this month.
According to an affidavit, the estimated value of the land has increased considerably over the past two years, up from €10m-€11m in December 2015 to between €16m and €17m last May.
It would be a prime location for housing in south Dublin and would border on a number of developments built in recent years.
The affidavit said that in 2006 Bank of Ireland accepted Mr Dunne’s interest in the property as security for various loans which later passed into Nama. As of July 31, the amount owed on those loans was €70.7m.
The developer has debts of around €700m, with Nama and Ulster Bank his main creditors.
The parcels of land at Woodstown are close to Woodtown Manor, a listed property once owned by Mr Dunne.
He had planning permission to develop a 120-bedroom hotel there, but the project never started and the permission lapsed.
The land would be a prime location for housing in south Dublin