The government has presented a leaky home rescue package scheme to help fund repairs on affected properties but it does not resolve the issue of who is liable for the crisis in the first place.The proposed scheme would see homeowners left covering half th
The government has presented a leaky home rescue package scheme to help fund repairs on affected properties but it does not resolve the issue of who is liable for the crisis in the first place.
The proposed scheme would see homeowners left covering half the cost of leaky building repairs themselves, with 25% covered by government and 25% covered by the local authority.
The Building Industry Federation said the financial package represented a good way forward but left issues of liability unresolved.
“We believe there are issues of liability to be resolved, especially for builders and suppliers who do not want to see liabilities for remediation work on a currently identified problem in any way linked over time to freshly discovered problems unrelated to those which have been repaired,” Building Industry Federation chief executive Bruce Kohn said.
“Local government will be removed from liability in cases where home owners take up the package. This could be considered as a forerunner to a wider move toward proportional liability in the building industry.”
Kensington Swan lawyer Stuart Roberston said while the package was big improvement on last year’s paltry 10% government contribution to repairs, it still left homeowners bearing the $6 billion brunt of the problem.
“One fish hook is that to be eligible for the financial assistance package leaky home owners will still need to meet bank lending criteria, albeit for 50% of the costs. If current leaky homes could meet that bank criteria, they would have little need for the scheme,” Mr Robertson said.
“It is the very fact that they can not meet bank criteria that is preventing leaky homes being fixed.”
Additional costs to homeowners could include expert design for the remedial work of fixing homes, and legal work in preparing for lodging a claim.
“With the prevalence of New Zealanders relying on home ownership as a form of retirement savings, leaky home owners taking up the government’s loan scheme may have little or no equity in their property for retirement savings,” Mr Robertson added.
Auckland City mayor John Banks sang the scheme’s praises, saying it was a “great day” for the “distressed, depressed and financially sressed” homeowners affected by leaky building problems.
“I have met too many people living in leaky terraced homes and multiple units who are facing crippling bills to fix their units. You can only imagine how that feels hanging over you,” Mr Banks said.
Wellington mayor Kerry Prendergast said the proposal offered a clearer direction for leaky home owners but there remained “many issues” to work through.
“We need to look at what is proposed in more detail but from a first look, the proposal provides greater certainty, more fairly apportions responsibility and offers a better way forward than the current system so leaky home owners can get their homes fixed and get on with their lives.”
