Gap in leaky home funding

The Government is under mounting pressure to increase its contribution to the leaky building crisis after criticism from a mayors' group.

The mayors of the six cities most affected by the crisis, including Wellington, Auckland and North Shore, discussed the proposal yesterday and are poised to ask the Government to more than double its contribution.

Under the Government's proposal, councils would cover 26 per cent of a claimant's repairs if the person agreed to drop legal action. The Government would provide 10 per cent and homeowners the rest.

North Shore Mayor Andrew Williams said the Government was "paddling around the edge" with its offer and should increase it to 25 per cent. It was essentially offering a zero contribution as it would recoup the money in GST and tax on builders' labour.

Wellington Mayor Kerry Prendergast said the mayors agreed that the "latest proposal on the table needs more detailed work".

After a conference call between the mayors yesterday, they would seek an urgent meeting with Prime Minister John Key and Building and Construction Minister Maurice Williamson. She refused to say what the mayors had decided.

The Government's offer, which amounts to $31 million a year over 25 years, covers only a portion of the true extent of the problem.

It has been estimated it would cost $11.5 billion to fix leaky buildings. It is believed 44,000 homes are affected, but there are fears the number could be closer to 80,000.

In August, the chief executives of 14 of the biggest councils said many leaky building claimants were emerging from the claims process unable to cover the cost of repairs because of lawyer and expert fees.

Wellington lawyer Dan Parker said the Government proposal did not offer an attractive alternative for claimants.

"I can't why they've bothered, really. It seems to be very disappointing but at least owners still have their rights to pursue recovery through the existing sources."

In his experience of nearly 500 cases, many clients had gained enough settlement money to pay for repairs and cover legal and expert fees. "The objective is usually to get as much back as possible and certainly enough to repair.

"They [councils] would much prefer the general public ... to think, `It's very, very expensive for you and you'll be disappointed, so don't bring a claim'.

"We're certainly able to achieve good outcomes."

Ms Prendergast said Wellington City Council had settled, on average, for 25 per cent of the total claims. It had so far settled about 108 claims.

Wellington resident Alan Samson said years of legal action against the city council and an architecture firm had cost him about $50,000.

His building had been repaired but a confidentiality agreement prevented him from saying whether his case had been settled.

He believed such agreements attached to settlements put claimants at a disadvantage because people looking to settle struggled to find others who could talk about their experiences.

A spokeswoman for Mr Williamson said the minister would not comment on the proposal until an agreement was reached.