Government to pay up to $300 million for shoddy quake repairs

Christchurch Regeneration Minister Megan Woods says the homeowners have been caught in a nightmare. Photo / Mark Mitchell

The Government will spend as much as another $300 million to help 1000 Canterbury homeowners caught in a legal quagmire over shoddy quake repairs.

Earthquake Commission Minister Grant Robertson on Thursday announced the agency would be opening up funding to homeowners who had bought repaired properties after the 2011 Christchurch earthquake only to discover that they hadn't been properly fixed – and that the new bill was going to exceed a $100,000 limit on EQC payouts.

With some insurance policies not covering the pre-existing damage, about 1000 property owners had been left in an "absolute nightmare", Christchurch Regeneration Minister Megan Woods said.

"They have been trapped with homes that have gone over the $100,000 EQC cap after they bought them, with no access to recourse from insurance," she said.

The group were the last to be affected by botched repairs that had not been addressed, she said.

The necessary fixes are expected to total up to $300 million.

That comes on top of $435 million already spent re-repairing homes under earlier policies.

Homeowners will have a year to put in a claim and will have to negotiate the size of their payouts with the commission.

But the payments won't be made under the current law EQC law, and instead will be made as "ex-gratia" payments.

"Owners of on-sold properties were the last group for whom no solution existed - this has nothing to do with liability or responsibility, it's simply in no one's interest to allow this situation to drag on further," a statement accompanying the announcement said.

It said the agreement would not let insurance companies or builders get out of any obligations they had, but would mean homeowners would give up their right to sue to the Government.

About 84 per cent of the quake claims the Government was facing in May last year had since been settled, Woods said.