Christchurch Earthquake 2011
OPINION: Do you have a legal question arising from how the earthquakes have affected you? Lane Neave partner Dr DUNCAN WEBB is our "agony uncle" on how the law applies to certain situations.
We have had repairs done by Fletchers/EQR. Unfortunately there are a number of defects in the repair and damage to other parts of the house, including our enamel bath. We have asked Fletchers to sort this out as they chose the contractor, not us. They say that we need to make an insurance claim with the contractor. What should we do?
The problem with repairs that are done defectively or where damage is caused by contractors is a growing one (and includes insurer-led repairs as well as EQC repairs).
There are a number of people involved, including the insurer (or EQC), their project manager (such as Arrow or Fletchers/EQR) and the contractor who actually did the work.
Each party will try to offload responsibility on to another. I have even seen a suggestion that the homeowner should claim under their own home insurance policy - which is clearly wrong.
One of the reasons that insurers try to get homeowners to sign settlement agreements when repairs are undertaken is to try to push responsibility for defects on to the builder - so if you have signed any kind of building contract or settlement agreement go back and look at what you agreed to.
However, the starting place is that all of the parties are responsible to you. The insurer is responsible for delivering to you a properly repaired house in accordance with the terms of the insurance policy.
If the repairs are shoddy or if they leave some damage unrepaired the insurer has breached its obligation under the policy. The homeowner has every right to go back to the insurer and require the full policy entitlement. An insurer cannot say that it is not their fault or responsibility.
At the same time a homeowner can seek redress from the builder or other tradesperson who did the work.
Even though the contract may have been with the contractor and the insurer or project manager the law of privity recognises that the person who is intended to benefit from a contract has rights under it.
Also the Building Act requires that all building work will be carried out in a proper and workmanlike manner, in accordance with plans and specifications and in accordance with the Building Act itself.
In addition, any repair of a home will be a supply of services which is captured by the Consumer Guarantees Act. That act requires work to be done with reasonable care and skill and to be fit for purpose.
Many building contracts have a "defects notification period" of around three months.
It is important to know that this period is not a limit on the bringing of claims. Rather it is the period in which the builder is entitled to remedy the defect themselves (and you can't get someone else to fix it at their expense).
If the defects are minor then getting the tradesperson to remedy the defect is the obvious solution.
However where the defects are very significant - such as structural problems with a repair or rebuild - then it may be wiser to seek professional advice about the proper response rather than rely on a tradesperson who has caused those very substantial defects.
It might not be surprising to find out that when defects like this arise the insurers and tradespeople tend to duck for cover and pass the buck. I would not accept this. The fact is that both the insurer and the tradesperson are responsible.
If the claim is a small one and you are not getting an acceptable response it may be well suited to the Disputes Tribunal.
Duncan Webb is a partner at Lane Neave lawyers. Email questions for him to legal.questions@ laneneave.co.nz. This is his last column for 2013 but we look forward to having him back in the new year to answer readers' queries.
- © Fairfax NZ News
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