Builders must show for disputes service

By FRANCESCA MOLD

The Government has announced the establishment of a new adjudication service making builders front up to homeowners affected by leaky houses.

Acting Prime Minister Michael Cullen yesterday issued details of the new service, which is the first plank in the Government's beefed-up response to the crisis estimated to cost up to $240 million in repairs.

The new disputes resolution process, which includes mediation and adjudication arms, will be established through the Construction Contracts Bill, already before Parliament and likely to be passed next month.

Mediations should be under way by Christmas.

The decision to set up the disputes service was made by a team of ministers working on the crisis.

They have also been working with the Government-appointed Building Industry Authority on its response to a report by leaky buildings inquiry chairman Don Hunn, as well as monitoring the effect on the construction industry and considering long-term regulatory changes.

Dr Cullen yesterday urged affected consumers to make use of the new disputes resolution service. Homeowners can register by calling free 0800 116 926 or online at www.weathertightness.govt.nz.

Registrations will be screened to ensure the problems experienced by homeowners fit the leaky building syndrome criteria.

If the registration is accepted, a case manager will be appointed and an application form sent out.

Once the form has been returned, an independent assessor will interview the homeowner, inspect the house, then determine the cause of the problems, parties involved and approximate cost of the repairs.

Homeowners will probably have to pay a fee, which has yet to be set.

If the estimated amount of the repairs is less than $7500, applicants will be told to take their complaint to the Disputes Tribunal.

If it is more and all parties agree, the matter will go to mediation. If there is disagreement, the issue will be sent to the adjudication service for a decision. It would be compulsory for builders and others involved to take part in the process.

Some details have yet to be finalised, including right of appeal and who the adjudicator will be.

Dr Cullen said the service would be similar to that operated by the Employment Relations Authority.

He said setting up the mediation service was expected to cost $4 million. The cost of the adjudication component was still unknown.

Dr Cullen urged affected homeowners to register with the service so the Government could determine the true extent of the problem.

He reassured consumers that details of their home would be kept confidential to protect values. The Construction Industry Council last night supported the Government announcement "in principle".

Chairman John Pfahlert said it would allay fears the service would be a "toothless tiger".

The National Party claimed credit for yesterday's announcement, saying the new service was similar to one it had proposed.

Dr Cullen admitted the new service contained elements suggested by National. He said the Government had never ruled out the Opposition's ideas on the issue.

National housing spokesman Dr Wayne Mapp said it was a pity the Government had taken a month to realise that people needed a fast-track resolution process.

He said there were also other major issues that needed to be resolved, including changes to the Building Code.

National also questioned why Dr Cullen made the announcement yesterday, rather than Internal Affairs Minister George Hawkins, who has been criticised for his handling of the crisis over the past few days.

National has accused Mr Hawkins of misleading Parliament about when he became aware of the leaky building concerns.

Mr Hawkins received a letter about a potential crisis in July last year but said he was only "formally informed" in April this year.

Dr Cullen said the criticism was unfair. He had handled yesterday's announcement because he headed the ministerial committee and because financial implications of the new service came under his responsibility as Finance Minister.

* If you have information about leaking buildings,
email the Herald or fax (09) 373-6421.

Further reading
Feature: Leaky buildings

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