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Leaky home - Source: ONE News -
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The government says now that it has decided to foot 25% of each leaky home repair bill it must ensure people don't abuse the system.
Building and Construction Minister Maurice Williamson yesterday announced the government and local authorities would each contribute 25% of the agreed repair costs, with the homeowner picking up the remaining 50%.
Williamson says homeowners could try to benefit by claiming for
not just repairs but for improvements to their homes.
He also says in the past, houses have had to be repaired twice
because of shoddy first-time repairs and that builders are being
monitored closely to ensure this doesn't happen again.
The total cost to the nation of leaky homes has been estimated at
$11.3 billion.
But the Home Owners and Buyers Association says although the government has come to the party, the resolution process is still flawed.
The Association's John Gray says the flaws are around the aspect of agreed repairs, assessors' reports required, and the fact that the government guarantee may not in fact guarantee everyone gets a loan.
He says these flaws need to be explored further, although first impressions are that the deal is a good option for owners of leaky homes.
However, some homeowners believe the government's offer is not enough.
Robyn Horsfall, who owns a leaky townhouse complex in the Auckland suburb of Parnell, says she will need to bowl and rebuild 41 units, at a cost of $26 million.
"To come up with $10-15 million for our 50% of the complex would be nigh-on impossible," she says.
Compensation also means homeowners will lose their ability to sue, which leaky homes lawyer Paul Grimshaw says may be the better option for many.
"What the council's trying to do here, somewhat cynically I think, is cap their liability at 25%. We've taken cases through the High Court where we've gotten 100% from the council. So why would I be telling owners to settle the council claim for 25% when they can get 100%?" he says.
As many as 15,000 owners of homes built in the late 1990s fall outside the payout's 10 year limit.
Rates likely to increase
Meanwhile, rates could increase to pay local authorities' share of fixing the leaky homes problem, Wellington Mayor Kerry Prendergast says.
The government's contribution is estimated at $1 billion, and Auckland Mayor John Banks said the bill for the greater Auckland region - where 75% of leaky homes are located - was also expected to be about $1 billion.
Prendergast did not estimate what it would cost the Wellington region but said claims already settled through other means were costs "significantly less" than what the 25% contribution would total.
"But we believe we need to step up to the mark the same as the government has agreed to," she said.
"Potentially it is going to mean a greater burden (on ratepayers)."
Key mayors were briefed ahead of yesterday's announcement, and a May 31 deadline has been set for majority acceptance for it to proceed.
Banks and Prendergast were "confident of a buy-in".
Local authorities had proposed the same 25-25-50 split to the previous government, which had rejected it, Prendergast said.
"So it is something that we have been working to for some time and it's why we're so delighted that this government has listened and come up with a package pretty much where local government was coming from several years ago," she said.
Not all leaky home owners will be eligible for the package; a PricewaterhouseCoopers report last year estimated that 22,000 to 89,000 homes could be affected given the time period, with 42,000 likely to be leaky based on design and materials. Only about 3500 had been repaired.
Only homes flagged as leaky with the Department of Building and Housing within 10 years of being finished would be eligible. A home built in 1995 but notified to the department as being leaky in 2003 would be covered but one built in the same year and not notified would not. Notifying the department effectively "stopped the clock".
Based on some missing the 10-year qualifying period, officials estimated 23,500 would be eligible for today's package - leaving possibly tens of thousands to pursue other options.
Williamson said while it was hard for those not covered, there had to be a cut-off.
Banks, builders positive
The announcement received a positive response from the banks and the Building Industry Federation.
The New Zealand Bankers' Association, representing all the main retail banks, said that while no commitments had been made its members were keen to work with the government on the details of the scheme.
"Member banks have agreed to set up a joint industry and government working group to do so," said the association's chief executive Sarah Mehrtens.
The Building Industry Federation said the financial package was a base for moving forward.
"Our manufacturing and supply chain looks forward to working with the Department of Building and Housing and other sector interests to make this package work," said chief executive Bruce Kohn.
"The essential factor is to get some certainty in the process. This package contributes to that."
What do you make of the new plan? Share your thoughts on our messageboard below:
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Add a Comment:
Post new commentmattnz said on 2010-05-17 @ 20:44 NZDT: Report abusive post
We featured on Holmes show and My House My Castle back in 2001 when this all broke out. Is seems that 9 years later most things have not changed. What Mr Key has done today is an absolute piece of PR magic. He comes across as providing a nice solution tfor everyone, when whats hes really doing is shafting the home owners. All thats changes with the governement is Labour did not care they were seend to be shafting the masses. Why ... Read on