13 December 2006

Milestone for owners of leaky homes

Building and Construction Minister Clayton Cosgrove today announced a milestone in the Government’s response to the leaky homes problem, with the passing of the Weathertight Homes Resolution Services Bill 2006.

The new legislation will help the owners of leaky homes settle their disputes faster, hold those responsible to account, get compensation from the liable parties, fix their leaky homes, and it will also enhance consumer protection for homebuyers.

"The Government made a commitment in May this year to owners of leaky homes to shake-up the Weathertight Home Resolution Service (WHRS). By April next year the new improved service will be up and running," Mr Cosgrove said.

Mr Cosgrove thanked the many stakeholders who contributed their ideas to the revamp of the WHRS.

"I would like to express my gratitude to the Leaky Homes Action Group and in particular its spokesperson John Gray, the Consumers' Institute, the Registered Master Builders Federation, the Certified Builders Association, the Construction Industry Council, local government, others in the building and construction industry and the wider community for their invaluable input. Their contribution has helped ensure the new legislation is relevant, workable and will help New Zealanders."

Mr Cosgrove said the changes will benefit homeowners at every step of the claims process.

"WHRS claimants will receive a more comprehensive assessment of, and be able to claim for, actual and potential weathertightness damage to their house and the work needed to repair it. Claimants will also benefit from faster claim resolution and lower legal costs," he said.

Mr Cosgrove said the new Act:
- Establishes a new Weathertight Homes Tribunal
- Provides more comprehensive assessor reports that can be used as expert evidence during the claims process
- Improves the information, advice and guidance given to claimants
- Establishes an expedited process for resolving lower value claims
- Provides the opportunity for a class action approach to multi- unit claims, such as for apartments and terraced townhouses

"These changes will help people access a faster, lower-cost alternative to court proceedings to get compensation from the liable parties and get their homes fixed, so they can get on with their lives," Mr Cosgrove said.

NB: The Government's two-year lending assistance pilot for WHRS claimants who are unable to access finance from private lending institutions is expected to be in place for 1 April 2007 - at the same time as the planned start date for the changes brought about by the new Act. The scheme will be run by Housing New Zealand Corporation.

Background Information

What are the key measures in the Weathertight Homes Resolution Services Bill?

- More comprehensive assessor reports for WHRS claimants so people can claim for potential, as well as actual, weathertightness-related damage
- A new streamlined process for lower-value claims
- A new process for standard claims, involving preliminary conferences and time-limited mediation before claims move to adjudication
- The establishment of a new Weathertight Homes Tribunal under the administration of the Ministry of Justice to provide more independent adjudication services
- Enhanced power and authority of members of the new Tribunal, including new criminal offence provisions when parties fail to appear when summoned or disobey an order of the Tribunal

- Clear objectives for Tribunal members to facilitate a more investigative approach
- Appointing a registrar for the new Weathertight Homes Tribunal
- Allowing WHRS settlements and determinations to be enforced in the District Court regardless of value
- A change to the required voting thresholds for bodies corporate to make it easier for a class action approach to be taken by owners of units within apartment blocks
- Requiring territorial authorities to place WHRS notices of new and existing claims brought, and their outcomes, on Land Information Memorandum (LIM) reports
- Allowing claims relating to multi-unit complexes that will not be eligible under new criteria to withdraw and be brought under the correct provision within one year without affecting limitation periods

When does the Act come into force?
Most of the provisions are planned to come into force on 1 April 2007 by Order in Council, but some provisions to establish the Weathertight Homes Tribunal start from the date of enactment. The Act provides for the WHRS Chief Adjudicator to be the chair of the Tribunal.

How will the Act help owners of leaky homes?
The main benefits for homeowners include the ability to claim for a wider scope of damage; receipt of an accurate and comprehensive assessment of the damage to their house and what work is needed to repair it; improved information and case management; reduction in the average time for claims to be resolved; lower legal and evidential costs; and a reduction in barriers to claims by bodies corporate and owners of homes in multi-unit complexes.

How do the WHRS reforms fit into the bigger picture?
The WHRS enhancements are part of a package of Government reforms aimed at ensuring homes are designed and built right the first time. That package includes: the licensing of those who design and build, while protecting the Do-It-Yourself (DIY) culture, the review of the Building Code, an accreditation and auditing scheme for Building Consent Authorities, sector and consumer education, building product certification, a financial assistance scheme pilot to help owners of leaky homes and investigation into options for home warranty and professional indemnity insurance.

ENDS

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