Action group wants leaky homes aid for big earners

Even in Auckland's better suburbs, leaky homes abound. Extensive repairs are needed to this townhouse complex on Remuera Rd after owners discovered weathertightness issues

Leaky-building victims say debt-laden home-owners earning six-figure sums should qualify for new Government-backed assistance just as easily as those on lower incomes.

Their criticism comes as the Government introduces legislation enacting its $7.1 million May Budget package to enable victims to fix their homes first and argue their case later.

It has allocated $30.5 million to resolve the problem in the next four years.

The Weathertight Homes Resolution Services Amendment Bill, which had its first reading last week, also creates a new tribunal to hear disputes and requires councils to put weathertightness issues on houses' LIM reports.

In the meantime, the criteria for assessing victims' circumstances is yet to be decided.

Building Issues Minister Clayton Cosgrove - who announced a new building guide for the industry last Friday - has promised lending assistance for victims who could not fund their own repairs.

Loans will be made via the Housing NZ Corporation and guarantees on private bank loans to homeowners in what the action group said was "perhaps the most eagerly awaited portion of the review".

The Leaky Homes Action Group has publicly welcomed many of the changes but behind the scenes it has been arguing strongly that claims on the $7.1 million should go to high earners with big mortgages as well as fixed income-earners such as beneficiaries or retirees.

"The first thing this Labour Government had to swallow hard on was the fact that they were likely to be providing assistance to not only the very needy in the traditional sense of the word but to those who are earning six-figure sums," the group said in a briefing paper. It also asked if enough money had been allocated.

Many leaky-building victims were investors who had built up an investment portfolio and had large borrowings. They were too highly geared to get loans because of the depreciated value of their leaky houses, the group said.

"We want to see that everyone has an opportunity to be restored to a similar, if not the same, financial position as they were before they had to deal with their leaky home," said the group's John Gray.

The group was generally in favour of the service overhaul and was "cautiously optimistic" about the changes.

Mr Cosgrove said the Government was to determine the eligibility conditions and lending criteria for the financial aid this year. A trial scheme would gauge success.

"A new financial assistance scheme involving market rate loans and loan guarantees will be piloted for two years to help people in the very worst circumstances get their homes fixed first and argue liability second," he said on May 12.

The money will go to those in what Mr Cosgrove termed "the very worst circumstances, unable to access finance from private lending institutions under normal lending criteria".

He hopes the scheme will help victims to repair their homes without a long wait for settlement.

Urgent repairs
What the latest leaky homes legislation aims to do

* Streamline the process of using the Weathertight Homes Resolution Service.

* Speed up processing of cheaper claims.

* Reduce the length of time for claims to be resolved.

* Cut the costs for using the service.

* Allow multi-unit owners to use the service, now available only to owners of stand-alone homes.

* Encourage homeowners to repair places faster.

* Ensure houses are effectively repaired.