Anne Gibson

Anne Gibson is the Property editor of the NZ Herald

Leaky homes fiasco continues

Only 186 homeowner agreements had been finalised by the claimants and the ministry. Photo / Martin Sykes
Only 186 homeowner agreements had been finalised by the claimants and the ministry. Photo / Martin Sykes

Only 12 victims of the $11 billion leaky homes catastrophe have received final payments from a $1 billion Government and local council scheme, raising the ire of experts trying to help homeowners.

Tim Rainey of Rainey Law and Home Owners and Buyers Association president John Gray questioned the much-trumpeted leaky home rescue package, announced last year, saying victims were enduring long delays as they tried to qualify for the Financial Assistance Package (FAP) to repair their homes.

Mr Rainey asked the Ministry of Business, Innovation and Employment for details of FAP payouts, and was shocked to discover that although 1232 victims had lodged expressions of interest by the end of September:

Only 186 homeowner agreements had been finalised by the claimants and the ministry.

35 claims were proceeding, of which 31 had received one or more contribution payments.

Only 12 had received their final payments.

The FAP scheme, started last year, is a joint Government and local council plan to help people avoid having to sue and to enable them to get their houses fixed.

Under it, the Government and the councils each pay a quarter of the cost, and the homeowner pays the other half.

Assistance is limited - affected houses must be less than 10 years old, and owners must agree not to sue before they can qualify for it.

Between 22,000 and 89,000 houses are believed to have some form of weathertightness issue, and the cost of repairs has been put at anywhere between $11 billion and $22 billion.

Mr Gray said the FAP scheme had failed, but he was also concerned about the Government's longer-standing Weathertight Homes Resolution Service which he said also appeared to be handling far too few claims, given the scale of the disaster.

The service issued figures showing 3312 claims had been closed, 1598 claims were active and 1986 claims had been resolved.

Thousands of victims could not afford to pay for litigation, did not qualify for the FAP scheme or had not gone to the resolution service, leaving a huge stock of rotting homes with no prospect of being fixed, he said.

The ministry's deputy chief executive for service delivery, Maria Robertson, told Mr Rainey 12 claimants had received the financial contribution payment by September 30.

He said he obtained the information after he sensed a dismal failure and lodged an Official Information Act request.

Not a single apartment owner had received a full payout.

Mr Rainey and Mr Gray criticised excessive bureaucracy, long delays and difficulty getting jobs approved and money paid, saying that although the Government scheme sounded fine, it did not work in practice.

"It would be fair to say that given the scale of the problem, the take-up has been disappointing, to say the least," said Mr Rainey, who represents claimants wanting $25 million for their leaky Nautilus apartments in Orewa, north of Auckland.

Mr Gray said he was worried about what appeared to be helpful state solutions but which were duds, and about skill levels in the state service.

"The whole FAP repair solution is based on the lowest possible cost, so it's a cheap scheme. It doesn't give good outcomes," he said.

Mr Rainey told of one Northland leaky home repair in which a metal beam was found to be not bolted to the house.

"But the council and Government said that wasn't part of the weathertightness repair, so it was not covered."

Prime Minister John Key has encouraged owners to lodge weathertight claims as soon as possible so they can stop the clock on the 10-year liability limit.

But Mr Gray said the way the service and department were being run, many people were "falling off the 10-year cliff".

Announcing the scheme last year, Building and Construction Minister Maurice Williamson said the hope was that victims could avoid lawyers and get their homes repaired quickly under the FAP.

A spokesman said yesterday Mr Williamson would look into the figures and was happy to discuss all the issues, but could not do so yesterday. He would respond today.

Financial Assistance Package

* 50/25/25 cost share split - homeowner/Government/council
* Came into force last July
* From an estimated 22,000 to 89,000 rotten homes and units, only 12 claimants have received final payouts.

- NZ Herald

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