Law firm warns leaky home deal not a fix-all

Tauranga leaky home owners do not have to accept a government package announced yesterday as a solution, a local law firm says.
Building and Construction Minister Maurice Williamson announced the Government and local authorities would each contribute 25 per cent of the agreed repair costs, with the homeowner picking up the remaining 50 per cent. The Government would guarantee homeowners' loans to repair their property - provided applicants meet bank lending criteria.
The Government's contribution was estimated at $1 billion.
But Andrew Hough, associate at Grimshaw & Co's Mount Maunganui office, said the package would be of little use to many Tauranga home owners affected by the problem.
The firm acts for over 6000 residential homeowners with leaky building claims, including about 100 in the Western Bay.
"In particular for the Tauranga situation [the package] is unlikely to be of much help, as in most cases certifiers were involved, not councils. So that would mean the 25 per cent would not be available in respect of councils.
"People need to think about how they can get maximum amount of recovery. Why should they pay 50 per cent ... when they have innocently purchased their house and haven't caused the problem?"
And in cases when the council was involved, home owners need not accept 25 per cent, Mr Hough said. He cited a case in Takapuna, in which a group of leaky homeowners won 100 per cent of their claim against the council.
Tauranga Mayor Stuart Crosby said the Government's package was a "significant improvement" from the previous proposal, but there were "no winners".
Tauranga City Council would consider the ramifications of the proposal and would report back to the Government by May 31.
Mr Crosby said the proposal was "just another option" for leaky homeowners to consider. Litigation was still an option.
Leaky homes was a "major issue" for those involved.
"I see these people in my office and visit them in their homes. It really is a major issue for them, psychologically and physically."
Tauranga is one of the worst affected areas and the biggest leaky building claim so far is $10 million for repairing the 40 Cutterscove Resort luxury apartments on Marine Parade at Mount Maunganui.
The package appears to have the support of local authorities and a May 31 deadline has been set for majority acceptance for it to proceed.
Auckland Mayor John Banks said he and Wellington Mayor Kerry Prendergast had been in touch with most of the Auckland area mayors  and were "confident of a buy-in".

 He estimated it would cost the new Auckland council about $1 billion over five years and said planning was already in place to accommodate that.
"We cannot, and are unable to, quantify the amount of money. We can quantify the misery but not the amount of money," Mr Banks said.
"What we do know is that in Auckland city alone last year, we spent $6 million on lawyers. We want to get that money out of the law firms and give it to gibstoppers, painters and builders to fix the problem."
Ms Prendergast said local authorities had proposed the 25-25-50 split to the previous government, which had rejected it.
"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.

 However, not all leaky home owners will be eligible. A Pricewaterhouse Coopers report last year estimated that 22,000 to 89,000 homes could be affected given the time period. 
Only homes flagged as leaky with the Department of Building and Housing within 10 years of being finished would be eligible.
with NZPA