Leaky building cost 'likely to top $11b'

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The bill for leaky homes is likely to top $11 billion, a review has found.

The news prompted Building and Construction Minister Maurice Williamson to meet with local government leaders yesterday.

He was tight-lipped about the meeting but Radio New Zealand reported the cost of leaky homes was up to $11.5b, from the previous estimate of $3.6b.

Mr Williamson said in July he expected a review by PriceWaterhouseCoopers would find "considerably more" problem homes.

He said the focus of the Weathertight Homes Tribunal needed to shift to fixing the problem instead of paying fees to lawyers.

The Government was looking at what was being done in similar international situations.

Canadian pensioners do not pay anything up front to have their homes fixed, but the amount is taken out of their estate when they die, which was one option, Mr Williamson said.

He met with the mayors of six cities most affected by the problem - Wellington, Tauranga, Auckland, North Shore, Waitakere and Christchurch - during a meeting in Wellington yesterday, who agreed future action must be based on actual repairs rather than litigation.

Mr Williamson was now waiting for the mayors to respond to suggestions made in the meeting before he would comment publicly.

He issued a statement, saying details of the options would be kept secret until after the mayors had considered them, but they aimed to channel cash from costly legal processes to repairs.

"Any solution will be focused on fixing damaged homes rather than on litigation."

The comment suggests one of the options could be to shift taxpayer funds from the Weathertight Homes Resolution Service - criticised as too costly and slow by many leaky home owners - to actually repairing buildings.

Mr Williamson indicated last month that the Government could consider contributing toward repairs to help bring an end to the saga, which has dragged on for nearly a decade. He suggested at the time that the resolution service could be disbanded in favour of a no-fault system in which councils, homeowners, the Government and other parties shared the cost of repairs.

Councils are estimated to be liable for up to $600 million of the cost of repairing more than 22,000 homes believed to be affected.

Wellington Mayor Kerry Prendergast and Auckland Mayor John Banks would not comment last night on what the Government had offered. Other mayors either would not comment or could not be contacted.

The councils put several proposals to the previous government last year to end the problem, but they were knocked back.

Those proposals included creating a no-fault resolution service in which homeowners would pay no more than 25 per cent of the cost of repairs, with local and central government negotiating how to split the rest.

The councils also proposed cheap or interest-free loans for leaky-home owners struggling to finance their share of repairs and a separate agency to pursue other parties responsible for leaky buildings, such as developers and architects.

- By MARTIN KAY, the Dominion Post, with NZPA