Leaky home costs 'beat Britomart'

The bill for thousands of rotting homes in Auckland City has hit $500 million, say two councillors.

The Government's refusal to accept any liability, and the fact that the council is picking up the tab for builders, contractors and others who cannot or will not pay exposes ratepayers to a bill of $300 million to $500 million, say councillors Doug Armstrong and Scott Milne.

"This is far and away the largest single item of expenditure the city has ever faced. The Britomart rail project only cost $200 million," said Mr Armstrong.

At $500 million, leaky buildings could cost each of the city's 160,000 ratepayers more than $3000.

Cairns Slane, the law firm acting for 4672 - and climbing - apartment owners estimated the $500 million figure using an average repair bill of $100,000. Most of the firm's clients are in Auckland City.

Nationwide, it has been estimated that the cost of leaky home repairs could top $1 billion. Half of the 2429 claims before the Weathertight Homes Resolution Service are in Auckland City.

The only other big council known to have tallied its repair bill is Waitakere City. It came up with a figure of $27 million based on 500 leaky homes and apartments costing $40,000 to $60,000 to repair.

A spokesman said Waitakere council's share of the bill was $5.5 million if other parties coughed up.

Mr Armstrong said Auckland City had woefully under-estimated the potential liability as a result of the "joint or several liability" law.

Under the law, when several parties are found to share liability but some do not pay, claimants can pursue full payment from one party - known as the "last one standing".

He said the council should also hire senior constitutional lawyers to see if the Government could be made to accept financial liability.

Auckland Mayor Dick Hubbard and chief executive David Rankin yesterday disputed the figures.

Mr Hubbard said the figures were "wildly speculative and probably irresponsible".

Mr Rankin said it was a significant financial issue in the region of tens of millions of dollars, of which the council's potential liability could be 10 per cent or 25 per cent.

Since July 2000, the council has had a $2 million excess on liability insurance for any one claim, and no claims for leaky buildings have come anywhere near the excess.

FLOOD OF CLAIMS

* Leaky building cases by area:

Rodney District 99
North Shore City 285
Auckland City 1218
Waitakere City 96
Manukau City 71
Hamilton City 34
Thames-Coromandel District 10
Tauranga City 48
Wellington City 208
Christchurch City 134
Nationwide total 2429

* Cases lodged with Watertight Homes Resolution Service as of August 11. Not all councils are listed