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Government sees leaky homes as too hard, says lawyer

Friday 8th July 2011

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The Government seems to have put leaky homes into the too-hard basket with an assistance package that excludes apartment owners, a leaky homes lawyer says.

The Government is next week expected to pass its leaky homes legislation, which will exclude some multi-unit dwellings from its financial assistance package.

Labour MP Phil Twyford yesterday proposed amendments to the bill, arguing that apartment owners were being unfairly excluded because common property could not be mortgaged and banks would not lend them money.

That made it difficult for them to raise the 50 percent contribution to repairs which owners have to find under the Government's assistance package, he said.

Twyford wanted the Government to offer a loan guarantee which he said would open the door for banks to lend.

Building and Construction Minister Maurice Williamson said some apartment owners would be covered but there would always be those who felt left out.

"The dollars just make your eyes start to water if you leave it open-ended and as soon as you draw a line in the sand, I fully understand that there's always a person just on the other side of that line," he said.

Those excluded would still always have access to the weathertight homes resolutions disputes process, he said.

Lawyer Paul Grimshaw, who represents 6000 leaky home owners seeking compensation through the courts, said he had sympathy for the Government given the costs of the problem.

But he was critical of the scheme's exclusion of apartment owners.

"I think effectively that the Government's really saying this is just too hard for them -- they don't really seem to be applying any form of logic to this," he told Radio New Zealand.

Grimshaw said the whole idea of the package had been that anyone who owned a leaky home could opt in if they wished.

"Now it seems to be that you can only access the scheme in the event that you live in effectively a standalone property -- one that isn't part of a development of a number of other units," he said.

"I think that therefore most homeowners that we act for would tend to be somewhat underwhelmed by the Government response because when you think about it, this crisis has resulted over the last 10 or 20 years mainly as a result of a lot of new apartments being built during that period."

Grimshaw said bodies corporate could still agree to levy apartment owners to get loans that way, or could take action through the courts.

"People are coming out with good settlements but it's not an easy process ... it's a nightmare for them to live through of course."

The Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill sets up an assistance package under which the Government and local authorities each contribute 25 percent of agreed repair costs, with affected homeowners funding the remaining 50 percent backed by a government loan guarantee.

The leaky homes crisis followed deregulation of the building industry, where a resulting lack of rules meant problems with design and products left thousands of homeowners with continuing problems.


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