Lawyers cry foul over EQC rewiring stance

22:16, Aug 11 2013

Legal experts have called the Earthquake Commission's refusal to pay for household rewiring ridiculous and unlawful.

The commission now requires homeowners to upgrade pre-1970s wiring at their own expense before repairs. Otherwise EQC will not do the work, offering a payout instead.

The issue has arisen as repairs and redecoration trigger the need to rewire to new codes and EQC has balked at the extra cost.

Somerfield homeowner Nicola Smith was shocked to learn she was up for thousands of dollars after the sudden rule change.

"It was just so arbitrary. We were all ready to go and had accommodation sorted - there was no warning and now we need to find the extra money.

"I feel like we've lucked out big time. A lot of people haven't got that sort of money so they won't be able to go ahead."

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EQC Canterbury Home Repair manager Reid Stiven confirmed they would now only fix earthquake-damaged wiring. The policy change came after EQC was hit by wiring bills of up to $50,000.

"For this reason, our policy is to cash settle the claim where it is evident a repair to non-code compliant wiring is required as part of the earthquake repair," Stiven said.

"If the owner is prepared to make the property's wiring compliant before the repair begins, we will be happy to repair rather than cash settle."

The law governing EQC states it must fix homes to "a condition substantially the same as but not better or more extensive than its condition when new, modified as necessary to comply with any applicable laws".

Duncan Webb, a partner at law firm Lane Neave and former law professor, said this meant EQC was obliged to repair to as-new and consent standard, including upgrading wiring and other components if needed.

"Who bears the cost under the EQC legislation? It's them, it's not the homeowner. The legislation is there to help facilitate repairs, not stymie them."

Webb said EQC's new policy was "ridiculous", and the commission was blatantly short-changing customers to save money.

Fellow lawyer Simon Munro, a senior associate with Anthony Harper, agreed EQC was not meeting its legal obligations.

The issue was the same as the recent debate over floor levels, where EQC must repair to as-new, he said.

"The same standard applies, whatever the issue. If something else needs to be replaced that's not damaged, then EQC needs to cover that. If they need to upgrade things, that's their responsibility to cover.

"They can't say they are not doing stuff, or compel a payment. They are obligated to undertake the repairs."

Alternatively, any cash settlement would need to cover extra work needed such as rewiring, Munro said.

Spokeswoman for earthquake recovery network Cancern, Leanne Curtis, said somebody needed to "step up and clarify the rules" for the sake of homeowners, contractors and EQC.

"Not everyone has a spare ten grand or so sitting around to fix their wiring - there needs to be clarity about when EQC is liable for costs."

The Press