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Leaky homes - some hope for home owners

Leaky homes - some hope for home owners

The Government has thrown leaky homeowners a partial lifeline when it unveiled its leaky home package yesterday.

But those worst affected will have to wait until next year for help.

Consumers’ Institute chief executive David Russell says “the changes are welcome, but they do not go far enough in some areas. People built and bought houses in good faith and a series of failures by the building industry, and the regulatory system (including local authorities who issued building consents) has brought about this crisis.”

“We would like to have seen a greater range of financial assistance and we believe that the continuation of secrecy surrounding individual settlements continues to disadvantage consumers”, he said.

“On the positive side, the changes address two major flaws of the current system. Extending the definition of damage to include future damage, as well as damage that’s already occurred, allows a more accurate assessment of the actual costs required to fix a house.” We’re also pleased that “class action “by apartment owners is now possible. This will make it much easier for apartment owners to pursue their legitimate claims.”

Building Minister Clayton Cosgrove released details of the $30.5 million package which will fund a “shake up” of the Weathertight Homes Resolution Service (WHRS).

The WHRS was set up in 2003 with promises of giving affected homeowners a speedy solution to the leaky home crisis. But more people have withdrawn their claims and walked away from the service than have settled with it.

Mr Cosgrove acknowledged the service was slow and drawn out by the involvement of lawyers and experts in “gaming” the system. Proposed changes include improving the quality of WHRS assessor’s reports, better information and case management for claimants, and a faster and more effective dispute resolution process that works to a timetable set by an adjudicator.

The aim is to move to a less adversarial system in which the adjudicator will control and manage the process, including fact finding. The appointment of case managers will assist claimants in interpreting assessment reports and providing information and advice. A two-year education campaign will also be introduced to help consumers make informed decisions when buying a house.

Smaller claims would be dealt with outside the WHRS process, although the details of this are yet to be finalised.

Mr Cosgrove said he hoped the new scheme would slash the average time it takes to settle a claim from 14 months to 8 months.

But Consumers Institute is concerned that financial assistance from the government is limited to those “in the worst circumstances” who are unable to borrow from private lending institutions. There are likely to be other people who just miss out on the eligibility criteria who will be financially disadvantaged by having to rely on private loan finance.

Mr Cosgrove defended the decision saying many people did not need any financial assistance to fix their homes.

And the service remains shrouded in secrecy. Confidentiality clauses that prevent consumers from assessing their claim against others of a similar size remain in place. Mr Cosgrove stated confidentiality was necessary to ensure settlements were reached. But it means councils, who are privy to this information, continue to have an unfair advantage over consumers.

There is no financial incentive to encourage homeowners to go through the building consents process rather than doing like-for-like repairs, which do not require a building consent. However, the government is planning to strengthen the building consents process through accreditation and monitoring. It is continuing to review the Building Code and implement the provisions of the Building Act 2004.


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