Homes must cope with 1-in-50 year flood
Do you have a legal question arising from how the earthquakes have affected you? Lane Neave partner Dr DUNCAN WEBB has agreed to be an "agony uncle" on how the law applies to certain situations.
My home requires a new foundation due to the earthquakes. I live in the flood plain, and this requires the new foundation to be significantly higher than the existing one. This breaches the recession plane and changes the access into the house and garage. Driveway, paths, steps and gates all have to be remodelled, which we do not like the look of. The character and function of my home will not be the same. How much change is it reasonable to accept?
Obviously with the events of the past week your question is particularly topical - and I hope that you survived the deluge.
In a sense you are one of the lucky ones, as in many cases insurers have repaired houses (including foundation repair) without addressing the problem that the house is in the flood-management area. Moreover, there are plenty of houses which, although they may not be strictly in a flood management area, are at increased risk of flooding due to changes in the land and its ability to drain water.
The Building Act and the Building Code both deal with flood risk.
First the Building Act says that the council cannot issue a consent if the land on which the building work is to be carried out is likely to be subject to natural hazards, including flooding.
The Building Code expands on this by saying that buildings should be designed and constructed in such a way that the likelihood of water (from flooding) entering buildings is no greater than 2 per cent in any one year (ie, a one-in-50 year event).
The decision has been made that people are allowed to build in flood-vulnerable areas, but only if they do so in a way that reduces the risk of flood to an acceptable level.
One thing that people need to be on the lookout for is where there is no visible damage of any significance to the foundation. However, there may still be damage.
If your house has moved, then this is a physical alteration which is an insured loss. If it has moved downwards this may result in increased risk of flooding.
In general, insurers will say that if the house has not moved in relation to the land (the house and land have sunk together); this is land damage and they are not liable (EQC is).
I am not so sure this is correct, but it is arguable.
However if your house has moved in relation to the land around it (especially if it has sunk), this is damage just as much as if it had lurched to the left or right and you should ask your insurer to reinstate it to where it was prior to the earthquake.
Even if your house has not moved but needs significant foundation repair, then all building work required to undertake that repair must comply with the Building Act and Building Code.
It should be noted that this is not to say that the entire building needs to be brought up to the current Building Code. The Act makes it clear that when a building is altered it will be satisfactory if, after the building work, the building will continue to comply at least to the same extent as it did before.
Your particular problem is tricky, but certainly not unique in that your insurer is seeking to reinstate your building in accordance with building law and your policy, but to do so it needs to alter the building envelope (by raising the building) which pushes it outside of the council-approved recession planes, and obviously changes the look and feel of your home.
The fact that your home will be repaired in a way that will largely remove the risk of flooding is a significant advantage, however under your policy you are entitled to reinstatement of the home that you had before, including in terms of "look and feel".
Any reinstatement must be assumed to be reinstatement in accordance with law, including building regulations. Any other interpretation of your policy rights would not make sense, and if such a term is not explicitly in your policy, it will be implied.
Homeowner policies generally provide that the insurer will pay for those increased costs. Insofar as changes to your home are necessary to comply with the law, it is clear that you must accept them.
Most of the time these are improvements; however in your case there is some downside.
It would seem that in this case there is a balance to be struck. Because you cannot be reinstated to exactly the position that you were in before the insurer must (as part of its duty of good faith as well as in accordance with the policy terms) put you back as close to your previous position as it reasonably can.
This may include work in respect of your paths, steps and access that will need to be designed in a way which is as sympathetic as possible - and it may be that architectural advice is needed.
Reinstatement requires replacement of a dwelling with the same quality, functionality, amenity and aesthetic as prior to the loss. In your case this cannot be by an exact duplication of what you had before, so some change is inevitable.
If this cannot be agreed in light of constraints under which the house is being rebuilt, it may be necessary to obtain specialist design advice.
However, ultimately you must accept the reasonable position of the insurer - the difficulty is knowing exactly when this point has been reached.
The breach of the recession planes is a Resource Management Act issue. Where the impact on neighbours is minimal, it is likely that a resource consent will be granted without too much difficulty - especially if the neighbours approve.
Even if the neighbours don't approve, it would seem you have a good case to obtain a consent to breach those recession planes, given the extraordinary circumstances.
If it is not possible to get a consent, it would be necessary to go back to the drawing board and redesign the house (or its repairs) in a way which complied with the District Plan, and was as close to an exact reinstatement (in terms of size, look, and amenity as possible) as possible.
Duncan Webb is a partner at Lane Neave lawyers. Email questions for him to legal.questions@ laneneave.co.nz.