The NAMA Act was signed into law on 22 November 2009. Since then, the Minister for Finance has appointed NAMA’s Board and has issued two Statutory Instruments (Regulations) to deal with:- 

 

1. more detailed parameters for the determination of the "long term economic value" of land and other assets (SI 546/2009); and  

 

2. the formal designation of "eligible Bank assets" which NAMA may review with a view to taking over from Banks (SI 548/2009).  

 

• SI 546 – these Regulations set out the factors to be considered by NAMA in terms of the "long term economic value" of land (and other assets) both inside and outside the State. Amongst these factors are the current prices or yields of land (using both specified and other relevant bulletins and indices); projections of land prices and other variables to be published in January 2010 by the CSO, the ESRI and the Central Bank/Financial Services Authority of Ireland; and analyses to be provided by the Department of the Environmental, Heritage and Local Government (on the extent to which existing land zoning and planning permissions granted and in force meet or exceed projected growth requirements); by the Minister for Transport or the DTO (on existing and future transport planning and the associated supply and demand projections for land use); and by the Department for Communications, Energy and Natural Resources (on the potential rise in energy and other costs due to the long term decline in non-renewable resources). 

 

• SI 548 – these brief forms of Regulations provide (in wording very similar to that set out in the Act) essentially that credit facilities directly or indirectly relating to development land, or other assets relating to such facilities, are "eligible Bank assets". This designation requires the relevant financial institution to deal with such assets with the same degree of professional skill, care and diligence as would a prudent lender acting reasonably; act in good faith and manner; and must not, without the approval of NAMA, vary, amend or compromise its contractual claims, nor indeed deal with any of those assets in a way prejudicing NAMA’s prospective interest in the assets.  

The "long term economic value" determined by NAMA for a particular parcel of land is not to be more than 25% in excess of its (current) market value, and the "long term economic value" of a particular Bank’s acquired portfolio, is not to be more than 20% in excess of the aggregate of the (current) market values of that portfolio.

RDJ will continue to monitor the emerging rules and policies of the NAMA project.

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