Official Report: Minutes of Evidence

The Chairperson (Mr Butler): I welcome the following Propertymark representatives to give evidence to the Committee and answer questions: Mr Timothy Douglas, head of policy and campaigns; and Mr Stephen McCarron, board member. Thank you very much, gentlemen. When you are ready, please go ahead with your presentation.

Mr Timothy Douglas (Propertymark): Good morning and thank you very much for the invitation to give evidence today. It is always a great privilege to give evidence to an Assembly Committee. We want to be as helpful as possible to the Committee's work. Anything that we do not have details on or if any additional opinion is required, with the permission of the Chair, we will happily follow up in writing. I am Timothy Douglas, the head of policy and campaigns at Propertymark. I am joined by Stephen.

Mr Stephen McCarron (Propertymark): Thank you. I am Stephen McCarron, and I am a chartered surveyor and estate agent based in Derry/Londonderry.

Mr Douglas: As a quick introduction for those of you who do not know, Propertymark is the UK's leading professional body for estate and letting agents, property inventory service providers, commercial agents, auctioneers and valuers for both chattels and property. Some of our members will do land and new homes, and some are in the block management space. We have more than 19,000 members across the UK. Essentially, outside of Scotland, where you need a level-6 qualification to operate as a letting agent, and Wales, where you need a day's training course as a minimum to operate as a letting agent, there are no minimum qualifications or entry requirements to operate in the sector. We think that that is wrong and should be improved. All of our members are qualified and must submit annual continued professional development. We have a regulatory and compliance function, auditing activity and their accounts. Essentially, we are championing the good and trying to outlaw the bad in property agency.

For agents operating in Northern Ireland, there is no legal requirement to have client money protection or to belong to one of the two UK Government-approved redress schemes. If you are a member of Propertymark working in Northern Ireland, you have to belong to those schemes as a stipulation of our membership. We are very much trying to drive standards up for agents across the profession but also, vitally, for the consumer.

As the Chair said, we have provided written evidence on the Bill that, hopefully, offers some insight from the collective conversations that we have had with our members. In my opening statement, I will cover four key areas and summarise our broad views and reflections on the Bill. First, I will give an overall response. Secondly, I had noted "concerns", but maybe I will call them "challenges" that we see with the Bill. Then, I will discuss areas for potential improvement to strengthen the Bill, and finally, I will provide some wider contextual issues linked to the sector and the marketplace that have come up following our preparation and engagement with agents working in Northern Ireland.

Our overall response to the Bill is that it is welcome. It recognises that there is a lack of consistent interpretation by local authorities that can lead to reluctance to use existing powers to tackle unsafe or dilapidated buildings. The Bill also shines a spotlight on what occupants, landlords, agents and tenants need to do to take action. The Bill has the potential to ensure that properties in disrepair are dealt with quickly, which will prevent instances of unused or dangerous properties being left with no clear resolution. Ultimately, it will increase the scrutiny of the conditions, safety and appearance of buildings and lands in an area. That will not only improve quality but raise property values, reduce crime and ensure that community spaces are better utilised. That has certainly come up from our conversations with our members.

I turn to concerns about and challenges with the Bill. We have heard from member agents that, as a first principle, building owners have the right to decide the use of their property as long as they act within the law, planning restrictions, building regulations and covenants. That should not be lost in the scrutiny process. There was a concern among our members that policymakers need to have greater understanding of three areas. The first is the economic viability of developing both small and large sites and buildings and the associated challenges and costs of doing that. Then, there is the slow planning process, which has come up time and again from agents operating in Northern Ireland. One agent said that it can take six weeks to get an architect and two months to submit an application but a year to get approval, while another agent said that he could think of a property in Bangor, where he operates, that had been waiting in the planning system for three years. There are obvious frustrations with that. Finally, there is an infrastructure backlog linked to water and sewerage connectivity. You know the issue because it has come up. Even when planning has been approved, that can still create a blockage. Individually or together, those challenges can mean that sites are not attractive to investors and are left underdeveloped, which can lead to dilapidation.

Local authorities must utilise the measures in the Bill alongside local development plans (LDPs) in their area, be able to identify property and land ownership and have adequate enforcement mechanisms. Councils, professionals and the wider public should have clear definitions. We believe that a rating system or categorisation is needed to determine the status of a building and any notice that it may receive.

The Bill could be strengthened in five key areas. As we outlined in the written briefing, a definition of "local detriment", with categories and scales to create consistent enforcement across Northern Ireland, should be included, perhaps in a new schedule 3, under "Definitions". Secondly, fines and the number of fixed penalty notices should be increased, and a daily charge for non-payment should be introduced to act as a greater deterrent and ensure that the measures in the notice to remedy the condition of a building and land are adhered to. Thirdly, there should be more focus on improvement. As we stated in the written evidence, there is an environmental cost and a landfill cost to demolition, so we want that to happen as a last resort. There is no community use clause linked to the assessment of buildings, so is there a reuse measure in the legislation? Fourthly, a focus on dangerous structures will need to include adjacent properties, as that was not clear from our interpretation of the legislation. An emergency action will need to be linked to neglect rather than a response to, perhaps, an incident, extreme weather or arson. That needs further clarity. Lastly, there should be a sunset clause to review guidance regularly. It would be valuable to have guidance produced for local authorities and professionals working in the sector as well. Scotland, in its building regulations in the early 2000s, had a procedural handbook, which is quite detailed. That could be a recommendation to take forward.

Finally, as we gather from our conversations with agents, the wider issues and context are to support successful implementation and ultimately, improve the condition, safety and appearance of properties across Northern Ireland. There are probably three wider things that are not directly specified in the Bill but could perhaps be included for further work. The first is a review of the status of listed buildings. The current laws allow them to receive business rates relief if vacant. I spoke to an agent in Downpatrick who said that they are marketing a residential building, and the building next door is almost identical but has been split into office space. It was obviously bought by a cash buyer or at auction. If it is vacant, there is a 100% business rates relief on it, so what is the incentive to get that building occupied? Secondly and more broadly is a review of business rates. There is a concern from our members that rates are too high and there are not enough incentives to support businesses to maintain the property once occupied, so, if the legislation is the stick, could there be a carrot ahead of that to improve things as well? Finally, introducing a business rates system with improvement relief could also be utilised ahead of the application of maintenance notices as an incentive to ensure that properties are improved, instead of using only or in partnership with those enforcement mechanisms. Thank you.

The Chairperson (Mr Butler): Brilliant. Thank you very much. You have given us a detailed response, and the paper is really good. It certainly matches the detail that you have given now. Thank you very much. There will be some questions from the members.

One of the responses that you got is in regard to clause 19, which I have highlighted and underlined. It jumped out because the language that you have used is quite strong. It says:

That hints at people taking the fine and then remaining anonymous and so on. Is there a suggestion that buildings potentially covered by the proposed legislation may already be being used for criminal activity? I ask because I note that your website indicates that there could be around £10 billion a year laundered through the UK property service; and the evidence presented today hints that Northern Ireland either could become affected by that or may already be, which is possibly the case. Have you any thoughts on that?

Mr Douglas: Broadly, the first point is that, when we looked at the fixed penalty notice, the amount seemed quite low. We are in the territory of it being almost not detrimental if it is low compared with the cost of improving the property or making it safe. Potentially, yes, people will look at that fine and then move on. That was a concern.

The wider issue is knowing property ownership. That will be really important to the application for local authorities. To some extent, although the legislation is welcome, it is almost a framework for local authorities to operate within. In England, through the Levelling-up and Regeneration Act 2023, the UK Government introduced high street rental auctions. Essentially, in England, local authorities will need to create a vacancy register and staff resource to run those auctions. Even with those enforcement powers, there will still be an onus on local authorities to have a desire to understand the properties in their areas and create a vacant property register, and they will need to understand the ownership structures. That will vary across the country.

The Chairperson (Mr Butler): There are two points to make on the back of that. We can extend it a little. This week, we had an evidence session with our Youth Assembly. Those young people were really good. One of the issues that they picked out was proof of ownership. We are indicating with this clause that the level of fine that is being levied is perhaps not high enough because, first, people might be prepared to take the fine on the chin and, secondly, it does not help to identify the owners. The young people were asking, "How do you actually identify the owners?". I suspect that one of the biggest challenges with a derelict or vacant property will be establishing outright ownership. That is really key to this. Those who do not want to be named or those who are, perhaps, involved in using the property for some other reason will take every avenue to avoid that, and a small fine like that certainly does not help the cause.

Mr Douglas: The anti-money-laundering legislation related to property agents is UK-wide, and, ultimately, agents need to take two forms of ID, on a basic level, and understand the property ownership. Over here, as I understand it, they will still do those checks, but there is a level through the conveyancing. So, if they have checked with a solicitor and have received confirmation from them about ownership, that will suffice. Obviously, if they cannot find the ownership or there are beneficial ownerships, sometimes it can be easier to find if it is a company structure because it can be recorded in Companies House. If it is individuals, it cannot. There are money-laundering rules in place, and we certainly do a lot of work in educating agents across the UK that, if they need a risk assessment for their business because there are red flags, they need to highlight that issue to the National Crime Agency (NCA) and, through a suspicious activity report, to HMRC.

Ultimately, there may need to be some investment from the Department in the current registers, because, over here, as I understand it, there was a move towards digitalisation but, from talking to agents, there are perhaps still some holes in that, so there needs to be some investment. From working in England and Wales, we know that the Land Registry there has a backlog when it comes to getting titles and even new builds on that registry. From an ownership point of view, a lot of agents will start with the title of the property, so, if our commercial and residential registers are not up to date, there will be gaps in the system, yes.

The Chairperson (Mr Butler): This is my final question. I had not thought of this angle, but you brought it up, which was excellent. I genuinely had not thought of this. I am thinking about our carbon commitments. When it comes to the environmental aspect, whether it involves dilapidation, demolition or rebuild, do you think that this legislation considers that and looks at how we meet our carbon commitments that are in legislation now? Is there a juxtaposition? Is there a rub here? When it comes to water and air quality and amenity too, do you think that the Bill stacks up in that space, or does that need to be assessed?

Mr Douglas: I will come in, but I am conscious that I have talked a lot, so Stephen can come in on anything. Ultimately, there are two points there. As an organisation, we recognise that, across the UK, up to roughly 20% of emissions come from buildings. Whether it is minimum energy efficiency standards in the private rented sector, which is a devolved issue that different Governments are looking at, we recognise that, when it comes to use and management, there is a responsibility on building owners to understand that and contribute to it as long as targets are realistic and achievable. Certainly, I cannot see any environmental impact assessment in the Bill. In England, lots of councils have declared climate change emergencies. Therefore, you would expect them to have a climate clause in most of their policies. I do not know whether that is the case in Northern Ireland. You are right: there probably is not an environmental —.

The Chairperson (Mr Butler): There certainly is in planning.

Mr Douglas: Yes.

The Chairperson (Mr Butler): It is circular because part of it is about the environment; part of it is about restructuring; part of it is about making buildings safe; and part of it is about revitalisation. The Bill identifies dilapidation and requires action to change that. That kicks in significantly with historic and listed buildings. I suspect that that is where the big rub will come.

Mr McCarron: If you look not just at historic buildings but at the building stock throughout Northern Ireland, you see that we have a fairly high proportion of older, traditionally built properties. We talk about incentivising landlords or owners to improve their properties in order to make the space, the amenity and the overall quality of our high streets better for everybody. The cost of that, in itself, is prohibitive.

One property that I can think of in the Maiden City is about 6,000 square feet and is a B1 listed building. Just to bring that property back to life, you are looking at £750,000. I know the owner of that property, and there is absolutely no chance that he would ever have the money to carry out the work. That is just one example of a wider spread of properties throughout Northern Ireland. If you look at where we are now on the ecosystem or otherwise, you will add plus, plus, plus on top of that to try to bring a building up to a standard that reflects where we are on climate change and everything else.

There are so many issues that we will face, especially in Northern Ireland, that are based on the quality of the buildings that we have, to achieve that level. Even to bring buildings up to a certain standard so that they are in a lettable or saleable condition will be a problem.

On the Bill, we talked about the £500 fine or whatever the case may be. A lot of people will just look at that and say, "That is a cost that I'm prepared to pay". Strategically, lots of companies — we talk about individuals; we talk about companies — buy properties and just leave them sitting there. They are prepared to leave them sitting empty for 10, 15 or 20 years. To bring the thing together, it will require a lot more. A fine is the stick, but where is the carrot? I understand that there is a limited pot of money in Northern Ireland, as is the case throughout the United Kingdom. How do you address that problem? A fine in isolation is not enough to prompt many people to improve their buildings and to spend significant sums of money. This is not the case across the board, but lots of people who end up owning buildings accidentally simply do not have the resources to bring them back to life.

The Chairperson (Mr Butler): It is really difficult. There is a carbon calculation for a building that is in a state of disrepair and dilapidation; then there is a carbon calculation for demolition or improvements; and then there are the cost implications. It is complex — it really is.

Mr McAleer: Thank you very much for your briefing, which has been really helpful to our scrutiny of and deliberations on the Bill. I fully see the issue that you flagged about the fact that, for some building owners, the fine would be much less than the prohibitive cost of repairing a building.

I want to tease out a couple of issues. You mentioned the absence of a community use clause in the legislation. What would that involve? What are your thoughts on it?

Mr Douglas: We were thinking about that argument for restoring or reusing a building, with demolition being the last port of call. We are probably looking at a staged process from local authorities. That could, perhaps, be done through guidance that asks whether they have considered all those things and whether an environmental impact assessment has been done. There could be a community use clause. Could it be refurbished or repurposed and used by the community? If there were community groups that need a space, could it be converted? There is a more positive element to it.

There are examples in England of groups saying, "We haven't had a community centre for years. That space has been empty. Can we convert it and use it?". It is about trying to sit alongside reuse and repurpose rather than demolish, if that makes sense.

Mr McAleer: Thank you for that. Very interesting. If someone owns a listed or traditional building that it is way beyond their means to bring up to a safe standard and they just cannot afford to do that, how can that be resolved when that is virtually impossible? Somebody maybe cannot afford to bring a building up to standard or their business is struggling in a building that is not up to speed. You spoke about carrot and stick: what would be the carrot?

Mr McCarron: Let us take a listed building as an example that, from an economic perspective, it is absolutely pointless spending money on because it makes no financial sense. At the end of the day, if you are the owner of a property, the thing has to make good financial sense for you to be able to do something that will have a positive output.

My friends in heritage will probably lynch me for saying this, but there are listed buildings that, frankly, will never be brought back to life. There are a variety of reasons why it is not practical or financially viable to do so. In those situations — I will be careful how I say this — it may be that the properties need to be delisted and rebuilt in a more modern and much more cost-effective way. I am not saying that anybody should take that as a blanket approach and am not suggesting that as a blanket approach, but there are instances of buildings in such a condition that it is just not practical to bring them back to a usable life in their current guise. That is not across the board, but there are instances where I can see that being a possibility.

Mr McAleer: Thank you.

Mr Blair: Thank you for your evidence and for your detailed submission to the Committee. I want to start with a couple of points of principle. The first is my own, which is that there is a do-nothing option, and we are currently near that, frankly, because of the inconsistency involved. The other is responsibility. We have heard about people who may have inherited something through, for example, an accident of birth. That happens, but they are the smaller number of examples that we could use. The greater number are people who are involved in speculative business dealings and therefore could — I am not disputing the principle behind all of that because it is how commercial interests operate — be in line to make significant sums of money when their site is developed or redeveloped. Therefore, I am uncomfortable about talk of carrots in general. We need to be specific here.

I am also uncomfortable because, as MLAs, we will have dealt with many people, over the past few years in particular, who have not been in a position to carry out much-required repairs to their own domestic properties. When you look at the issue proportionately, you see many examples of people on medium or low incomes who cannot afford to fix the roof, replace their windows or, when they suffer storm damage, put it right. Individual ownership brings with it those responsibilities. Therefore, do you, in principle, agree that there should not be a general assumption that public money should be used to protect private interests in relation to dilapidation, especially where there is a speculative business concern that could ultimately make an individual or company significant sums of money?

Mr McCarron: I do not disagree with anything that you have said, but there has to be a fine balance in it. As an agent, I have seen rows of buildings purchased that have sat for the past 15 or 20 years. Pigeons have invaded them and created problems.

Mr Blair: I know this.

Mr McCarron: It is almost as though it is done deliberately to achieve another goal that we might not understand at the time. I believe absolutely that a level playing field is needed. I agree that larger commercial interests do not need to be rewarded for bringing buildings up to standard. If they have bought the building, they obviously have a plan for it, and, if they want to use it as a commercial venture, they should invest their own moneys in such an arrangement. It is about balancing that situation with instances — I cannot talk about Northern Ireland as a whole; I can talk only about the area that I come from, but, because I am in the business, I know from personal experience of quite a few cases — in which properties lie vacant simply because the owners do not have the funds to repair them. The other side of the coin is this: if there is no appetite to lease or sell a commercial or residential building, the commercial interests will not want to put any more money into it, because, without any uptake, that would effectively mean losing money.

In my humblest opinion, there is no perfect answer. We absolutely need to put a process in place that encourages people to improve the stock that is out there and make it more energy-efficient; however, it is impossible to understand where every person is on that at any moment in time. Sadly, as under any such arrangement, some will suffer, and others will profit. I am not suggesting that the carrot should be given to everybody — I do not know what processes are in place — but there are certainly people out there who would act if some form of rates relief or grant aid were available to them. That would improve our high streets; it would improve our building stock; and it would make Northern Ireland a better place to inhabit.

Mr Blair: OK. I will tease that out a bit more. We will stick to principles. That one could be applied to every property across the jurisdiction, commercial or domestic, whether occupied or vacant. I will make a point about the people who are, perhaps, most affected by this. There may be only one building owner, whether that is a corporate owner or an individual, but the people who live around many such buildings take a hit to the value of their property and to their visual and residential amenity, and real, practical risks arise from, for example, walking past a building with a roof that might fall off. Financially and otherwise, there is an everyday loss to people who inhabit the area around such places. If you start a conversation about public support, you will get into another argument about public purchase and taking something off someone. It is a different conversation altogether if you are going to use government money to put something right that has gone wrong in a situation out of which a speculative business arrangement could ultimately make many millions of pounds. I suspect that taxpayers would not be comfortable with that, and, just by looking at the basics of it, I know that I would not be comfortable with it. We need to bear all that in mind.

I will ask another question, if I may, because I would like more information on other aspects of this. I do not want to put you on the spot, because it is something that could be developed, but, as our conversation and your presentation show, the matters that we are talking about involve many different interdepartmental responsibilities: the Historic Environment Record sits with Communities; rates sits with Finance; and planning sits with a mixture of Infrastructure and local government. Have you previously made representations on dilapidation to the bodies that have a role to play, with listed buildings being a good example of where their responsibility lies? If you have not already — I understand that this may have been triggered by the Dilapidation Bill — is there a possibility that you and other representative bodies will start speaking to those people in an interdepartmental way so that it helps all of the pieces to come together?

Mr Douglas: Yes. I will come to that point.

On your first question, I agree with everything that Stephen said. We represent property agents, so, when we talk about incentives, we are talking about incentives for use. We want the buildings to be filled, whether it be community use or a business or start-up. When we talk about incentives, we are talking about use. Perhaps this is naive, but we are saying that, in an ideal world, every owner and landlord wants to do that. I understand the other side of the coin: that they may not and, that, if you do not have safeguards or incentives, things get exploited. However, our basic premise is use. We want vibrant communities. We know that, as you said, if there is kerb appeal, there is greater property value. We want communities that are not derelict. There are even studies in the US that prove that there are links between graffiti and crime. That is why, before you even get to the Bill, local authorities will need support. It goes back to what the Chair said: unless they have a dedicated resource that looks at property ownership in the area — a register of vacant properties and who owns them — or unless they know where to go to find more information, they will not really have a starting point, and it will be scattergun.

My second point is that — dare I say it — the type of lease needs to be looked at. You tend to get a full repairing and insuring lease versus an internal repairing lease. If you are a landlord and you have issued a full repairing lease, the onus is predominantly on the tenant to be in charge of the inside and outside of the structure. They tend to be for longer leases — you are looking at up to 20 years — rather than short-term ones, but that could come into play. We do not want to talk ourselves out of the legislation, but that is a consideration that has come up with agents; that lease structure will be an important starting point for local authorities. It is also about place-making. What is the local authority's vision for its area? If it knows that the ownership and has a vision for the use of properties, it can have a strategy to target and use the mechanisms, but those things have to be in place.

That feeds into your second question. We engage with the Department for Communities. We have worked a lot on the Private Tenancies Act (Northern Ireland) 2022 reforms that have come through, and we respond to planning consultations and some of the energy-efficiency consultations. It all comes down to having a strategy. What is the overall strategy for linking that through government and the Assembly? We are happy to continue to work with other organisations formally and informally to pull that together. We have probably done more work on empty homes. Some policy tourism, as it were, could be done to look at how empty residential homes in the commercial space are dealt with elsewhere. There is a successful empty homes partnership in Scotland that means that 25 of the 32 authorities in Scotland have an empty homes officer. There is a cost for that, but the Scottish Government provided £2 million of investment in the most recent Budget, and over 2,000 empty homes have been brought back into use. We have probably looked more at the empty homes side, but we think that there should be a strategy, and we would be happy to feed into it.

Mr Blair: OK, thank you.

Mr T Buchanan: You mentioned listed buildings, about which I am passionate. It is all part of our built heritage. I would like to see everything possible being done to ensure that our listed buildings are preserved and brought up to standard again.

You talked about the challenges. What impact will the delays in planning applications here and the inability of the Northern Ireland Environment Agency (NIEA) to respond to consultation processes in a timely manner have on the outworkings of the Bill?

Mr McCarron: I think that we can all agree that the planning processes in Northern Ireland are difficult. People make applications that can sit in the system for three or four years. I can speak only from my experiences in the north-west, but my personal opinion is that there seems to be no will to change or improve that. If you have a listed building that you want to bring back to life, the hoops that you have to jump through are unquantifiable at times. There is a game of ping-pong between statutory bodies as you try to get answers. Questions are raised, they go back and more questions are raised. We have to find a solution whereby we streamline the system and make it much more efficient, and I know that a lot of authorities across the UK want that.

It is difficult. Pre-COVID, the cost of construction was a lot less than it is today. People start off with a plan and work off a matrix of costs, but, if a planning application is held up for two or three years, by the time they get planning permission, those costs have risen exponentially. What was a viable option on day 1 is no longer a viable option in year 3. There is no doubt in my mind that the planning processes in Northern Ireland need to be addressed and improved so that they are much more streamlined.

Mr T Buchanan: Part of the reason why we have so many disused buildings in our towns, villages and rural areas is delays in the planning system. Some people who have been looking for planning permission walk away because, as you said, after that application has been in the system for a couple of years or more, the costs have escalated so much.

Mr Douglas: We know that councils are under pressure. It is easy to point the finger at local authorities, and that is not what we want to do. However, I spoke to an agent working out of Belfast, and they are frustrated that councils miss deadlines on planning with no consequence — it just rumbles on. That is frustrating.

Going back to the Bill, we struggle to see the time frames for issuing notices. What is the time frame from first assessment by a local authority? For how long does a property have to have been vacant or damaged? There is a hierarchy of notices, but there is no staged process for the timeline of assessment. The local authority might visit a property in week 1, but will it wait six weeks, six months or 12 months before it issues the notice? The timescales for planning and the notices need to be addressed to get things moving.

Mr T Buchanan: If councils are going to be responsible for issuing the notices, they also need to be responsible for freeing up the planning process to allow things to move forward. Councils have a bit of work to do.

Mr Douglas: Yes, we have heard that from member agents in Northern Ireland.

Mr T Buchanan: All right. Thank you.

Mr McCrossan: To follow on from the carrot-and-stick comments, the carrot really should be the access to services to enable redevelopment. There is just too much stick when it comes to getting things through the planning process, particularly through local government and councils. It becomes a point of great frustration to the extent that people have started to give up doing it.

It will be difficult to find a one-size-fits-all solution to the multifaceted problem, because such a combination and diverse range of circumstances are at play. You have the big fish: those who come along, own plenty and spend even less. They exist in all our towns, and I am conscious of a number of them. They come along with the long-term goal of selling land off to a public body for the regeneration of town centres. That is happening, unfortunately. As a result, landbanking is happening, which is holding up development and hindering the cosmetic view of the area. Equally, we have people who just cannot afford to do it. For example, there is the ordinary town trader in a three-storey building, where the roof is falling in on top of him, who is just about making ends meet. Those are the people who are doing the hard slog daily and genuinely cannot afford to do the regeneration work. In between, you have large organisations such as Royal Mail. Recently, I had a direct argument with Royal Mail about the state of a listed building in Strabane in which it has resided for generations. Luckily, it has now responded to the concerns raised, having, unfortunately, been embarrassed into doing so. Equally, there are public bodies that do not keep all of our public buildings up to standard. They do not set a positive example in many of our town centres.

It is complex. I have a concern that is at the heart of it. To be local about it, I am aware of streets in West Tyrone where there is dereliction. There are young, sparky developers who want to do something with those, but they get into the planning system and move nowhere. They are hit with big bills to provide consultations to NI Water for the waste water network, which, as we know, is a disgrace. There are all sorts of issues. If you two were 21 — you are not far off it — and buying a building in Strabane or Omagh, where you wanted to turn two old houses into four or five apartments, you would be knocked back at the first hurdle and told, "You're not going to get this, because there's no waste water infrastructure". If developers own the building and submit the application but are stopped because of a lack of investment in infrastructure that should be provided by government, should they be fined in the same way? That is why it is complex. People will fall victim to the system. It will disincentivise investment, and I am worried about that.

We have an issue with dereliction, but it is not the small businessman or businesswoman who is the cause of that; it is the big fish — the beasts with the money — who can afford for things to sit. We need a more forensic insight into who those individuals are. It is the guys who have a substantial portfolio of 10 companies that own half the country who need to be slapped hard with the fines.

Mr McCarron: OK. Let me give you an example of a scenario that I am aware of. I will use the phrase "land assembly". I think of a developer who is picking up properties in a particular area of a particular city. Those properties are sitting rotting around their ankles. There are all sorts of problems. That developer's strategy is to buy the next building and the next building, with no intention of doing anything to them, until they have acquired a critical mass. Then, the developer will probably put in an application to, frankly, demolish everything and build a superstructure of some description. I understand exactly what you allude to.

On the flip side, I also remember being that 21-year-old, although my brain is now fading. You are absolutely right: there are people who have a drive — a get-up-and-go — and are looking to do something positive to make their communities better. Do not get me wrong: they are also looking to make a commercial business out of it. They are being stymied. It is impossible to come up with a matrix whereby you can say, "This person here, this person here, and that person there".

I can recall a time when properties in Derry/Londonderry were sitting in states of disrepair, and the Housing Executive would give people grants to bring them back to life. The deal was simply this: you got your grant, you renovated your house, and you brought it back into liveable, habitable standards. If you sold it within three or five years, you paid that money back. The carrot was the grant, and the stick was that, if you sold the house, the Housing Executive wanted its money back. That model was plain and simple and easy to understand, and it had a positive effect on the communities that availed themselves of the service.

Now, I know that we are talking about residential and commercial. We could even be talking about sites that have Japanese knotweed. There is such an array of properties out there that it is impossible even now to figure out what is what. However, sometimes people need to be jolted into action. Larger companies can challenge things, and, for them, a £500 fine will not be an issue. As we discussed, it is about how you categorise things; what stages you put them in; and what fine or action will be commensurate with your understanding of the property ownership or whatever the case may be. A lot more work needs to be done to understand that and to put it into a matrix whereby we can apply common-sense approaches to each type.

Mr McCrossan: Given all the hurdles, is there a risk that investors will be disincentivised? Regardless of age or background, what about the ordinary businessman or businesswoman who is trying to make a difference, going out on their own and taking a risk? Is there a risk that setting those fines, when the system is so choked with problems, will disincentivise potential investors, and that, ultimately, as a consequence, the larger beasts will, by default, gobble up the opportunities because they can afford to do so? It would put me off.

Mr McCarron: OK, but, if you are in that commercial world, there is an element of risk in everything that you do.

Mr McCrossan: I should say that I am a company director, Chair, but I do not buy and sell property.

The Chairperson (Mr Butler): Not yet.

Mr McCrossan: Not yet, no.

Mr McCarron: OK. There is a commercial risk to everything that people do. A young, enterprising person who comes along will make decisions based on how they see the commercial viability. I accept what you have said: they will be aware that the planning system is slow and that the water infrastructure system is creaking, if not completely broken.

Mr Douglas: It also comes down to the local authority's enforcement strategy and how it will use the powers. Will the local authority be open to a conversation with owners about use, or will it not be open and say, "We've got these powers. Here's your notice. You need to sort it"? Will the local authority be willing to work with an owner to find out whether they will do anything with the property? If the owner is not, there is an enforcement mechanism in place to deal with that. However, if the owner is willing, what is the process, and how can government support that?

Mr McCrossan: Most people would answer by saying, "Yes, I want to do something".

Mr Douglas: The local authority then needs to ask, "What is the business plan?".

Mr McCrossan: Then the owner will come back and say, "We can't get planning. We can't get access to waste water infrastructure".

Mr Douglas: Yes, I am just saying —

Mr McCrossan: It goes round in circles. You can see the problems. A lot of the solutions to the problems sit in this Building. Some of the hurdles could be unravelled. However, there is a challenge that would test the effectiveness of the Bill and would have a disproportionate impact on the small businessman or businesswoman who is trying to carry forward an investment.

Mr Douglas: Yes. We have some sympathy with that argument, and we toy with whether the business rates argument is a red herring. Ultimately, the more we speak to agents, the more we find that it is about use. There is no business rates relief for a new business for the first 12 months after it enters a premises. There is no business rates relief if you improve your premises. Those are the carrots that we talked about. We are talking about good businesses — the small businessman or businesswoman whom you mentioned — that enter a premises: what help is given to them in order to fill our high streets? That is the other side of the coin. Otherwise, ultimately, the Assembly has to decide whether it should be "use it or lose it". In England, there is a high street rental auction process. If a shop or other commercial premises has been empty for at least a year and a day — 366 days — in a 24-month period and if the local authority has an empty shop register and a boundary area, which is like a public space protection order, and has done a public consultation, it has the legal authority to auction the property. The landlord's consent is not needed. That is "use it or lose it". How strongly do you want to enforce ownership?

There is an enforcement mechanism through the Bill, but there is a step before that where local authorities need to understand their area and bring in owners to understand the leases, the economic viability and the planning issues. Then, you might not even need a maintenance notice, because owners will say, "There's a relief here. There's an incentive here. I can get into this property", and we will get the vibrant communities that we want. There are two sides to it.

Mr McCrossan: There are many steps — Chair, thanks for your indulgence — to be taken before there would be consideration of such a harsh penalty, I assume, although I can see the reasoning for it in some instances. If it is the public system that is preventing the investment, however, it is difficult to put in —.

Mr McCarron: That is part of it. The other thing to be wary of is that it should not become punitive. It has to have substance. As we have said, there have to be grades, and you have to understand the reasons why. That is where you get into the minutiae of everything. There are certainly people who hoard properties; there are genuine cases of people who own a property but simply cannot afford to bring it back into life and improve it; and there are people who are somewhere in the middle. We will not get to all the answers and solutions today.

Mr McCrossan: I was just outlining how complex it is.

Mr Douglas: We agree.

The Chairperson (Mr Butler): For the record, Daniel, you got to use William and Michelle's time. That was really good, though. You highlighted the fact that there is crossover with the Department for Communities and, in our case, with the Committee for Communities, because powers will reside with councils in the first instance but also with the revitalisation schemes.

I will close with this point: Daniel is right, except that neighbours of derelict properties lose amenity and value, so it is not as simple as saying that they should rest because they cannot afford. There is a decision to be made as to whether to use it or — not to lose it; I would not suggest that at all — have a system or mechanism by which to repurpose the property.

Thank you so much for your time, gentlemen. We really appreciate it and may well be in touch again, as it was a useful session.

Mr Douglas: Thank you.

Mr McCarron: Thank you.