Leaky home bill put at $132m

The cost of fixing Wellington's leaky homes is put at $132 million, $26 million of which could fall to ratepayers.

Wellington City Council estimates 1200 homes could be affected by the problem, which has forced thousands to move house or endure damp, unhealthy conditions.

The estimates - which mayor Kerry Prendergast describes as conservative and do not include millions in legal fees - are part of a stocktake included in a proposal to dramatically speed up leaky homes claims that is expected to go before Prime Minister Helen Clark today.

Ms Prendergast and Auckland Mayor John Banks have led the proposal on behalf of cities hardest hit. The nationwide bill for repairs to homes is estimated at $1.2 billion.

Ms Prendergast said yesterday that the scheme had four main parts:

Creation of a no-fault resolution service in which homeowners pay no more than 25 per cent of repairs, with local and central government negotiating on how to split the rest.

Cheap or interest-free loans for leaky-home owners who struggle to finance their share of repairs.

Identifying builders to do work as quickly and efficiently as possible.

A separate agency to pursue other parties responsible for leaky buildings, such as developers and architects.

Ms Prendergast said the proposal made it clear councils were willing to pay their share of repairs. Though courts tended to set that at about 20 per cent, the proportion paid in any agreement with the Government could be higher or lower.

A 20 per cent liability would mean a $26.4 million bill on the $132 million in repairs estimated to be needed in Wellington, excluding legal fees.

Ms Prendergast said though Miss Clark had recently rejected calls for the Government to pick up some of the total cost, taxpayers were already spending millions on the Weathertight Homes Resolutions Service.

"We want to work with government to come up with a package that says, `You don't have to accept liability'. What we're asking you to do is work with us, use the money you're currently using, and will use in the future, to resolve these [claims] to actually get the homes fixed."

Large numbers of homeowners who settled under the present system were getting only about half the value of repairs after spending significant sums on legal fees. In some cases, compensation did not begin to approach the cost of repairs.

"We know of Wellington cases where the bill may be $267,000 and they've ended up with $30,000 to fix it, and they're just not fixing it because ... there's not the value left in the house to get debt on it from the bank.

"For most people, this is the biggest asset they own. They just see the value disappear before their eyes. We need to get this resolved."

Local Government New Zealand chief executive Eugene Bowen said the total cost of resolving leaky homes under the present system was estimated to be $2 billion - $800 million of which was process costs.

About 80,000 people are believed to be in about 12,000 leaky homes, most of them in Auckland. The problem was largely caused in the 1990s, when building restrictions were relaxed to allow untreated timber and new types of cladding.

Building Issues Minister Shane Jones did not want to comment till he had seen the proposal.

'NO ONE WILL HELP'

For one owner of a leaky home, proposals to hasten the claims process do not go far enough.

Janet Pawson, a director of leaky home advocacy group Lighthouse, has spent years battling for leaky-home owners' rights and is unimpressed by the new plan.

"Some reclads are costing $300,000 to $400,000. You are looking at the owners having to pay $100,000. The home owner has done nothing wrong. To say they must pay 25 per cent is unfair." Many of the Auckland residents caught out were new migrants and the way the situation had been handled reflected badly on New Zealand, she said. "A lot of Asians and South Africans are caught up in this. What must they think of New Zealand? No one will help them out."

Mrs Pawson and her husband bought their Auckland City apartment as an investment about seven years ago. All the exterior walls of the 24-unit building need replacing. "There is $1.3 million worth of damage – that is just the contractor's bill. Every piece of framing on the exterior walls, all the timber, has to be replaced."

The unit owners had "high hopes" consent to begin repairs would be given by year's end.

- © Fairfax NZ News