EQC strikes accord on repairs

Aerial view of liquefaction and earthquake damaged houses in Burwood, Christchurch.

The Earthquake Commission has cut a deal with 98 Canterbury homeowners that affirms the government entity's responsibility to repair earthquake-damaged property to a 'when new' state, as well as covering repairs for undamaged parts of a property and clarifying its position on cash settlement calculations.

In a joint statement between EQC and the EQC Action Group, both parties agreed EQC would repair earthquake damage to a condition substantially the same as "when new". The property owners dropped their bid for a declaratory judgment on the extent of EQC's liability for the quake damage to their houses.

EQC said its position was always to repair houses to a "when new" state. But the homeowners said EQC used phrases such as "pre-earthquake standard" and "like for like".

"This created the impression that the standard EQC had to meet was something less than as when new," the group's deputy chairman Craig Edwards said.

The statement also clarified that if repairs on a quake-damaged part of a house meant work had to be done on an undamaged part, EQC would cover the cost of that work.

Edwards said EQC has refused to undertake repairs when it would be required under regulations to significantly upgrade items such as wiring and had paid homeowners for the work excluding the cost of required upgrades, leaving homeowners with "a substantial bill" to complete repairs.

Another of the group's concerns was a clause in the Earthquake Commission Act giving EQC the option to replace or repair damaged property rather than making a cash settlement with homeowners, without binding it to "exactly or completely" replace or reinstate the property, "only as circumstances permit and in a reasonably sufficient manner". The group said EQC had considered the clause modified the repair standard provided.

The group said the parties had agreed the clause does not apply when EQC makes cash settlements with homeowners, but only when it chooses to repair or replace the damage, and this means some of those paid out by EQC may be able to challenge the way EQC has calculated their payment.

- BusinessDesk