Louise Cosgriff spells out ways the Government can ease the pain for everyone caught in the crisis
The Government cannot legislate or "loan" away the financial pain caused by the leaky buildings fiasco. But it can reduce the severity.
August 2002 marked the beginning of the debate that has plagued us ever since. How big is the problem? Who should pay? How do we avoid it happening
again? The minister admits he is no closer to determining the size of the problem or how to fund the fix. He has some ideas on prevention.
Meanwhile, ratepayers, builders, plasterers, ex-private certifiers, previous homeowners and current owners are being destroyed by the financial burden. All of these people are victims of the leaky buildings fiasco.
They are all suffering financially and mentally. The anguish faced by a current owner is the same as that felt by a previous homeowner who is now labelled as unfairly as a "project manager".
Where there are losers, there are winners. In this case the winners are the "leaky building industry" building surveyors, leaky building remedial "specialists", lawyers and well intentioned lay people.
A mystique has been created. Repair work is more difficult, more complex and more risky than other building work. Fact or fiction, it is a useful marketing tool.
A few "qualified" building companies fix leaky homes, supervised by "qualified" building surveyors. All the building company websites I have visited describe themselves as experienced, trade qualified builders. No special qualifications here.
The NZ Institute of Building Surveyors, certifies its members as "weathertightness certified" following completion of an in-house course. A limited pool of "appropriately qualified" builders and surveyors creates scarcity and a premium price. The cost to repair can exceed the cost to demolish and start again.
To be satisfied of building code compliance "on reasonable grounds", Auckland City Council requires all reclad work be supervised by a building surveyor. The Super City may adopt this requirement.
Building surveyors can charge up to $250 an hour. Supervision costs in excess of $10,000 are common.
Surveyors can determine timber replacement. They can carry out "on the spot" flashing design work.
In Saturday's Herald, Russell Cooney is quoted as saying that fear of litigation has pushed the costs up higher and "you cannot blame companies for acting in this way". Liability is the same for any building work undertaken and consented.
To suggest that liability for leaky home related work is higher is simply not correct.
Most leaky building claims proceed through the Weathertight Homes Tribunal. It is more legalistic and more inaccessible to lay people than its predecessor, the Weathertight Homes Resolution Service.
Claimants are provided with some assistance, defendants none. Most rely on lawyers or lay representatives. The PriceWaterhouseCoopers report provides an unsubstantiated indication of claim related costs. I think it underestimates the "building expert costs" and probably excludes defendants' costs.
So we have one group of New Zealanders suffering while another group is profiting. The Government needs to look at ways to transfer some of the winners' profits back to the losers.
Firstly, the Government needs to ring fence the problem so that solutions can be really targeted. For a definition of leaky building, how about this? The building must have been constructed between July 1992 and March 2005, use untreated kiln dried timber and the cladding must be face fixed.
Claim-related process costs are dead money. Any reduction represents a win to defendants and claimants. So here are a few ideas.
"De-legalise" the pre-mediation process and related documentation. Provide templates that all parties can use to state their claim, join other parties or seek removal.
Change the tone of the pre-mediation meetings, remove the "pomp and ceremony" that makes it feel like a court. Train case managers to provide unbiased information to all parties - information on what to expect or how to manage the process.
Provide training courses on how to defend or prosecute a claim, or analyse the linkage between defect and damage.
Increase the time between a failed mediation and adjudication so "legalistic work" only occurs once all attempts to mediate has failed.
The Government needs to look at ways to reduce the excessive repair costs. This will also benefit owners who are "out of time".
The Government needs to obtain legal advice to see if the requirement for supervision is a fair representation of "reasonable grounds".
It needs to undertake robust, objective, replicable research into the cost of repairing leaky homes across New Zealand and expose areas of unwarranted profiteering.
Finally, the Government could consider providing financial relief through tax rebates to all of those affected by the debacle.
Claimants are recognised as victims. It is now time for the Government to recognise the plight of defendants. For too long they have been forgotten.
There is no "big fix" so it is time for the Government and its advisers to look at implementing actions that will make a difference, no matter how small.
* Louise Cosgriff is a principal of Pearl Bay Consulting and provides leaky building claims resolution services.
