"Unfortunately, this investigation work has had to be stopped because the body corporate has no money to pay for this work as it is being denied access to the settlement funds as a result of a legal challenge by some owners," the document said.
"The settlement committee is exploring a number of options to obtain release of the settlement proceeds as soon as possible. This is of utmost importance for the early commencement of remedial work."
Before last year's annual meeting, objection to the settlement fund distribution had been lodged by owners of 59 units, the letter said.
That meant that only 77 per cent or 200 unit owners supported the allocation and distribution proposal as it was then.
The hold-up would cause repair investigative work to be terminated, meaning this would need to be rescoped, owners were told.
More money would be needed due to temporary repairs and higher future costs were likely due to inflation. Construction costs were rising and there was more of a risk of not getting capable remediation contractors.
The owners are represented by Grimshaw partner Gareth Lewis. Asked about the dispute over the $20.05 million, Lewis said: "This issue is currently before the High Court so unable to comment at this stage."
He could not confirm the amount of money paid to the owners but said he hoped for a quick result.
"Hopefully the court will resolve this as soon as possible."
Last month, the Herald reported that initial investigations had begun into how to fix one of New Zealand's biggest leaky-building towers.
The owners fought for years to get the money to fix their properties, initially losing in the High Court and Court of Appeal but then winning a Supreme Court decision, resulting in a settlement between them and the former North Shore City Council and others. Robert Khoo, chairman of the owners' committee, expressed frustration about the length of time it has taken to progress to the point where a contract might be let.
In October 2012, the Supreme Court said the former North Shore council owed a duty of care to ensure the Spencer On Byron development complied with the building code.
The complex, 200 units of which are leased to a hotel, was certified by the council but was later found to have defective cladding, it was reported.
A council spokesman could not confirm the $10 million figure, saying, "As with confidentiality surrounding such settlements, Auckland Council has no comment."
Spencer On Byron settlement
•Auckland Council: $10m
•Insurers of builders Brookfield Multiplex Construction (NZ): $6m
•Ace Insurance, insurer of cladding installer Wes-Tec: $4m
•Lumley Insurance, insurer of architects, due to pay: $50,000
•Total: $20.05m
(Source: Spencer On Byron Body Corporate Settlement Committee)
