Leaky homes victims pay most in new deal

Building and Construction Minister Maurice Williamson. Photo / Dean Purcell

The Government has refused to get involved in large-scale payouts for the multi-billion-dollar disaster of rotting homes. Leaky homes victims will pay more than two-thirds the cost of repairing their properties, with the Government chipping in just 10 per cent.

The Government is expected to reveal the new deal for thousands of owners of leaky homes today.

It is understood an accord between Building and Construction Minister Maurice Williamson and metro city mayors will see the Crown bear only a tiny portion of the blame.

Homeowners will pay 64 per cent of the cost of repairs, councils 26 per cent and the Government 10 per cent.

John Gray, president of the Homeowners and Buyers Association, said he was bitterly disappointed with the new deal, which treated victims as the country's "dirty little secret".

The Government has refused to get involved in large-scale payouts for the multibillion-dollar disaster of rotting homes.

But big-city mayors, including John Banks of Auckland and Bob Harvey of Waitakere, have been in discussions for many months to try to end the impasse with the government.

They want some contribution for homeowners so councils are not left shouldering the bulk of the bills.

Mr Gray said this new deal would not solve anything.

Homeowners, offered just 10 per cent from the Crown, would continue to fight for their rights, he said.

They would do this by going to the Weathertight Homes Tribunal, run by the Ministry of Justice, and to the High Court.

The tribunal is continually posting decisions on rulings and has recently ordered North Shore City to pay a migrant couple about $250,000.

Councils are complaining that rates will have to rise if they are to continue to face such major litigation.

The Crown's main role in the disaster has been to fund the tribunal and the Weathertight Homes Resolution Service which, offers assessments and mediation for people whose leaky homes are less than 10 years old.

Mayors are pleading with the Government to decide on the contributions before Auckland's Super City is formed.

Councils are understood to have expressed "anguish" about the new deal, with some mayors saying the Government's contribution is too small.

The Crown's 10 per cent share is understood to be partly in the form of a loan to homeowners rather than a straight handout. Suspensory loans may be made available to victims aged over 65 years.

A universal loan guarantee system combined with assessments and support to claimants is the main form of Government contribution planned.

Councils' contribution will come in the form of payment for repairs and to help homeowners fund borrowing to get places fixed.