Councils' leak-crisis plan draws doubtful response

By PAULA OLIVER

A proposal by councils to deal promptly with the leaky-building crisis has been met with scepticism by an industry member and an affected owner.

Local Government New Zealand leaders met privately on Monday and produced a four-pronged plan in response to a Building Industry Authority report estimating that the repair bill for leaky homes could reach $240 million.

The plan included setting up a mediation process, establishing a special bench of District Court judges to provide legal advice to homeowners, and setting up a community fund to compensate those who could not afford to take action or had not reached resolution through mediation.

But the Building Research Association is doubtful about the proposed use of judges.

"Even finding a judge who is an expert in building would be rare, because they have to have such a broad knowledge," said the association's weathertightness manager, Adrian Bennett.

National Party housing spokesman Wayne Mapp is also pushing for a solution involving mediation.

He wants an arbitration tribunal, and several panels operating to get through the bulk of the cases within six months.

It would take two months to set up the tribunal, which he says would need statutory authority.

But home owner John Wilson - who has a $615,000 Grafton Rd townhouse affected by leaks - said yesterday that he disagreed with that idea and much of the Local Government NZ plan.

"Binding arbitration would be great, but I'd have to say, 'This week it's for the bathroom floor, this week it's for the electricity', and so on. And this is an ongoing problem. Problems will be coming up in three or four years' time."

Mr Wilson said it was not realistic to expect the industry to support a compensation fund when firms were now refusing to accept liability.

Local Government New Zealand chief executive Peter Wilder admitted that the plan needed to be discussed with many parties. He said the community fund would be a last resort.

It could be filled by charging a levy on the industry, similar to ACC levies.

Mr Bennett predicted that gaining support for a levy would be difficult.

"I don't think anybody likes paying levies. Unless it was imposed by the Government it would be a challenge to get up and running," Mr Bennett said.

And homeowners would be against binding arbitration, as they wouldn't get all their money back.

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Further reading
Feature: Leaky buildings

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