Editorial: One tick for leaky home rescue plan

A wait-and-see element permeates the Government's latest attempt to tackle the leaky buildings crisis. Perhaps that is to be expected, given the continuing discrepancy in assessments of the size of the problem. The Government estimate is 15,000 homes and a repair bill of $1 billion; industry calculations range closer to 40,000 buildings. Either way, the situation defies the quick-fix of dollops of Government largesse. There must be a degree of targeting, and a commitment to a further response if and when it is required.

In that context, the new measures announced by the Building Issues Minister, Clayton Cosgrove, deserve a qualified tick. That they did not receive as much is probably a result of the false expectation raised by National MP Nick Smith. He predicted a generous loans scheme, with interest discounted to 4 per cent for those with Weathertight Homes Resolution Service claims.

As it is, a two-year pilot lending assistance scheme delivers two products: loans at market interest rates and loan guarantees, effectively as bridging finance. As well, the troubled resolution service is to be overhauled following complaints of delays, inadequate assessments and owners being bullied in mediation. The service has been dogged by lawyers and technical experts drawing out proceedings.

Time limits on mediation are among the devices designed to halve the average 14 months at present taken for resolutions.

Much of the reaction to the package has centred on the $7.1 million allocated over two years by the pilot loan scheme. Critics say that sum could be spent on a single apartment complex. But the money will be a test of demand, as well as a useful tool for the most unfortunate homeowners. For them, the problem is not the rate of interest but being unable to get finance from banks under normal lending criteria.

People who obtain a loan under this scheme will be able to get their homes fixed and know the causes and full costs of the weathertightness problem before arguing liability through the resolution service or the courts. That places them in a much better position. No longer will there be pressure to accept an unsatisfactory mediated settlement.

As with the loans scheme, so the revamp of the resolution service will be reviewed after two years. That review must gauge whether the $30 million overhaul has lived up to the promise of providing a faster, more efficient and more cost-effective process for homeowners. Clearly, some grievances have been met. Aside from the streamlined procedure, the new resolution service assessment reports will, for example, cover probable as well as actual damage from leaks, ensuring any claim covers the full extent of the damage. As well, barriers to registration of claims by bodies corporate and apartment owners are to be removed.

The extent of the leaky buildings crisis has never been quantified, despite this being among the many excellent recommendations of the 2002 Hunn Commission of Inquiry. In all likelihood, the Government is underestimating the size of a problem that it first denied and then addressed in a rushed and inadequate manner when establishing the resolution service three years ago. At least now, however, there is evidence of a cogent and more considered response.

That approach must continue as the full extent of the crisis is revealed. While local councils will continue to bear much of the financial burden, the Government must play a part. It can contribute best by helping those most in need and by removing obstacles from the resolution service process. This package, even if it has disappointed many afflicted by the leaky building curse, goes some way down that path.