Get in quick for help with leaky home bills

Leaky-homes specialists said the Government fix did not got far enough, and would not deter owners from pursuing their own claims. Photo / Martin Sykes

Leaky-home owners are likely to flood the Weathertight Homes Resolution Service with applications for help so they do not fall foul of strict eligibility rules for the Government's aid deal.

Of the 42,000 dwellings estimated last July to be leaky, only 23,500 are thought to be eligible for taxpayer and ratepayer help to have it fixed.

Only homes finished in the past 10 years will qualify, meaning any house built before May 2000 will miss out.

Some of the 42,000 have been repaired already and an estimated 15,000 built in the late 1990s have fallen outside the 10-year liability limit.

The clock is ticking on remaining owners but they will not miss out if they lodge an application quickly which is later approved.

Houses are assessed usually within three months and if it is deemed a qualifying leaky home, the eligibility clock will stop running retrospectively, from the time an application is lodged, even from today.

At present 1771 active claims are before the resolution service.

Building and Construction Minister Maurice Williamson said beyond 10 years it was difficult to tell whether damage was from leaks or other causes and there had to be some cut-off.

The 50:25:25 ratio is a marked improvement on the Government's last offer of 65 per cent for the homeowner, 25 per cent for the council and 10 per cent for the Government.

The Court of Appeal has ruled the Government has no liability but looser rules in the building code introduced by National in the early 1990s resulted in the poor design, building and workmanship that causes leaking buildings.

Changes to the Building Act in 2004 and building standards in 2005 mean the problem has virtually disappeared so most claims will be on houses built between 2000 and 2004.

Prime Minister John Key said it had led to thousands of damaged lives.

"The Government is not prepared to stand by and let this awful situation continue," he said. The package would give owners the "financial lifeline" they were looking for and was a substantial commitment in today's tough economic environment.

Officials estimate a 70 per cent take-up rate of the 23,500 eligible households, or 16,450 homes fixed.

On that basis the Government reckons the package will cost taxpayers about $1 billion over five years, though the funding won't be capped.

If the take-up rate is higher, and the homes qualify, the Government will continue to fund it.

Eligibility is not means tested so owners of leaky homes on Paritai Drive will qualify.

Mr Williamson has briefed the eight trading banks and said all were receptive. He said there was more work to do to finalise the scheme.

He said the scheme would guard against being gamed by either inflated costs for repairs or owners trying to improve their homes.

Leaky-homes specialists said the Government fix did not got far enough, and would not deter owners from pursuing their own claims.

Specialist leaky-homes lawyer Paul Grimshaw said the proposal was "nowhere near enough".

"Why should the home owner have to pay 50 per cent for a problem he or she didn't create? Why would they settle for 25 per cent from the council when they can get 100 per cent?"

Mr Grimshaw said his firm had, or was currently representing, 6000 leaky home owners and most had very successful outcomes pursuing the council and other parties either through the High Court or the Weathertight Homes Tribunal.

"They will be much better off pursuing their rights in the normal way than settling for half of what they're entitled to," Mr Grimshaw said.

Home Owners and Buyers Association (Hobanz) executive member Roger Levie agreed.

"If they have no other party than the council to pursue and took their claim through the tribunal or High Court, then they would have a good show of getting a lot more than 50 per cent of the cost of repair back, in our experience."

The plan would help some home owners with limited capacity to pursue their claims via the courts or the tribunal, Mr Levie said.

"But they still have to be able to fund the other 50 per cent somehow."

- additional reporting: Adam Bennett