Repair nightmares: Brownlee says it would have been chaos without home repair programme
The Government maintains that there is no systemic issue with Canterbury earthquake repairs, but the Opposition and local experts disagree.
The Earthquake Commission (EQC) and insurance companies say the onus is on homeowners to prove something went wrong with their repair, but homeowners say the contractors or insurers should pick up the tab for remedial inspections.
Thousands of Cantabrians are still waiting for EQC and insurers to address failed earthquake repairs, six years after the Canterbury earthquakes.
As of April this year, EQC had 4278 open requests for remedial repairs on its books. To date, it has undertaken 67,746 home repairs in Canterbury.
It aims to complete "the majority" of remedial repairs this year.
EQC Minister Gerry Brownlee calls EQC's managed repair programme "an outstanding success".
Megan Woods, Labours' spokeswoman for Canterbury issues, said the number of remedial requests hadn't changed much over the last year.
"There may well be properties disappearing off their books, but they're coming in obviously at about the same rate," she said.
Woods said EQC had recently taken staff out of Christchurch, and the Government needed to commit to seeing the problem through.
She said nobody wanted EQC to give money to people who didn't deserve it.
"But what is expected of [EQC] is that it will treat people fairly, and that is not what we've seen in the case of Christchurch."
EQC general manager of customer and claims Trish Keith said the remaining claims were often complex and reaching settlement was not straightforward.
"A customer may have a different view from EQC as to the extent of the damage and the remediation strategy and this can mean agreeing on the pathway to resolving a claim can take time," she said.
"In addition, estimators, technical staff and builders are a limited resource across the country."
Christchurch Mayor Lianne Dalziel said she was concerned the long-term effect for Christchurch could be an issue similar to "leaky building syndrome" which affected many houses built in the 1990s.
"I do worry about substandard repairs. Especially those that aren't identified now and within the period that EQC will address them."
Dalziel said several earthquake-related issues could have an ongoing effect on Christchurch.
"One of them is as-is where-is sales, because at some point in the future somebody isn't actually going to know whether repairs were done properly or not, or whether they were actually done at all."
Keith said EQC recommended that home buyers ask the real estate agent for a full and accurate statement of all EQC claims for the property, including settled and outstanding claims.
"If someone buys a property, and the previous owners received a payment from EQC to make repairs but did not carry them out, then they need to be aware that EQC cannot pay twice for the same damage."
Dalziel said the council had a role to advocate for ratepayers, and she could take up issues with the Government.
"It's a hugely challenging area. I mean, I don't have a simple solution. I'd actually personally like to go to government with a solution, so what is the solution?"
She said the Government made a "fundamental error" in how it split roles between private insurers and EQC when dealing with the aftermath of the 2010 and 2011 earthquakes.
"[EQC] could have been a quality control. They could have been an advocate for the people"
Dalziel said she would support a "broad" enquiry that looked into repair problems alongside other earthquake-related issues such as pre-earthquake land zoning.
Brownlee said calling failed repairs a systemic issue was unfair because it ignored the thousands of Cantabrians with successful repairs.
"The programme has, by any measure, been outstandingly successful."
He said home inspections done when people sold houses hadn't showed any 'time bomb' systemic issue waiting to emerge.
Brownlee said without the managed repair programme, the post-earthquake scenario would have been "chaotic".
"There is also the concern that a lot of people, if they were cash settled, may not see the full scope of works to be done on their house. And I know that there are many thousands out there who have been surprised by the scope of works and how much had to be done to put them right," he said.
"No-one's walking away from this."
Brownlee said EQC couldn't give arbitrary payouts as a gift from the taxpayer, and
had to have an appropriate system for settling claims.
"Let's be very, very clear: it's not a government department. It is an insurance company," he said.
"The idea that they're a government department and therefore should operate on a welfare basis is completely wrong, it's never been the case. And I can't see that any government in the future would want to make it that way."
He said it was important there was a process for identifying "genuine earthquake damage or genuine failure to repair".
Brownlee said he wasn't unsympathetic to people with remedial claims, but called for everyone "to be fairly reasonable".
He said some damage involved in the claims simply wasn't earthquake damage.
"The reality is that if a claim was in and a scope was done at the time, it would have picked up most of this stuff."
Brownlee said there were no more contractor recalls in the Canterbury repair market than in the wider New Zealand market for new builds or repairs.
Woods said that wasn't comparing apples with apples.
"These are statistics that Gerry Brownlee often throws around."
She said new build recalls were generally for smaller issues that didn't take years to remedy, and EQC remedial repairs were "fundamentally different".
"One of the things that [Brownlee] needs to do is face up to the fact that we do have a real problem here. It's not good enough that we're in 2017 and there's still nearly 5000 people on the books that need to get their houses re-repaired for the second time, and we don't even know that that's the end of it."
Anthony Harper partner and earthquake insurance lawyer Peter Woods [no relation] agreed with Megan Woods, calling Brownlee's comparison with the wider market "smoke and mirrors".
He said the fault lay on the shoulders of EQC and the insurers – who developed the scopes of works for repairs and assigned budgets.
"I don't really blame the builders, because a lot of them will have just done work that they were told they had to do, and they weren't allowed to do the work they wanted to do," he said.
"The homeowners have trusted EQC to get it right and the system's let them down."
Peter Woods said he was also concerned for people who didn't know about faulty repairs.
"There'll be a lot of people out there who actually don't know that their house hasn't been repaired properly, and they won't know until they come to sell it, and that could be years down the track."
Some homeowners also couldn't afford to have experts investigate their homes, he said.
Brownlee said it was necessary for people to pay for experts to verify their remedial claims before EQC would pick them up.
"How else do you do it? Remember that these are remedial repairs. Someone has already scoped that work for EQC, and EQC has provided the repair in most cases."
He said EQC would pick up most remedial repair issues in due course.
"They will handle them appropriately, I think... EQC is not keen to become the default maintenance provider for homes across Canterbury, because EQC is paid for by all premium holders across the whole country."
Brownlee said the systems in place were working.
"The Residential Advisory Service is free, and it does get a lot of resolutions to a lot of these problems. We're happy to fund that," he said.
"We know about these remedial repairs because people have a place to go, and I think that's a good thing."
Insurance Council chief executive Tim Grafton said private insurers dealt with a very small number of failed repairs.
That was because the large earthquake claims that private insurers picked up were significant works and were usually inspected by Christchurch City Council to ensure they complied with necessary guidelines and codes.
"I'm not saying that it's non-existent."
Grafton said private insurers' remedial claims were likely to be complicated because they often had an EQC claim, a private insurance claim, and contracts with contractors.
He said the contract system varied from insurer to insurer. Some required a repair contract to be between the homeowner and the contractor, and some employed the contractor directly.
In cases where the contract was between the homeowner and contractor, it could be up to the homeowner to pursue the contractor for remedial repairs.
"So to that extent they are complicated. And who would not be frustrated six years after an event to be in this situation?
Grafton said in general, if EQC had managed a repair that then failed, it would be up to EQC to fix the problem, even if the total cost went over EQC's $100,000 cap.
Previously undiscovered earthquake damage could be covered by the private insurer if it pushed a claim over cap, he said.
"Even properties that are a mix of shoddy workmanship and previously undiscovered damage, it is only the previously undiscovered damage repair costs that contribute to the over cap proposition."