Leaky homes: apartment owners not excluded

The Government says its new leaky homes legislation does not exclude apartment owners. File photo / Greg Bowker

The Government says its new leaky homes legislation does not exclude apartment owners, but 75 per cent of owners in a building would have to agree to stump up their share.

The Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill is expected to have its third reading next week.

The bill sets up an assistance package under which the Government and local authorities each contribute 25 per cent of agreed repair costs, with affected homeowners funding the remaining 50 per cent backed by a government loan guarantee.

Labour MP Phil Twyford put up an amendment last night which was voted down. He wanted the Government to offer a loan guarantee which he said would open the door for banks to lend.

"The main problem is that banks won't lend to bodies corporate because they can't mortgage common property, which makes it difficult for them to raise the 50 per cent contribution to repairs owners have to find under the package," he said.

"A simple solution would be for the Government to offer a loan guarantee to bodies corporate, which would then open the door for the banks to lend."

This morning lawyer Paul Grimshaw, who represents 6000 leaky home owners seeking compensation through the courts, said he had sympathy for the Government given the costs of the problem but anyone who had a leaky home should be able to access the package.

"Now it seems to be that you can only access the scheme in the event that you live in effectively a stand-alone property - one that isn't part of a development of a number of other units," he told Radio New Zealand.

"I think that therefore most homeowners that we act for would tend to be somewhat underwhelmed by the Government response because when you think about it, this crisis has resulted over the last 10 or 20 years mainly as a result of a lot of new apartments being built during that period."

Mr Grimshaw said bodies corporate could still agree to levy apartment owners to get loans that way, or could take action through the courts.

"People are coming out with good settlements but it's not an easy process ... it's a nightmare for them to live through of course."

Mr Williamson said apartment owners were entitled to the financial assistance package if 75 per cent of a building's residents agreed.

He accepted not all apartment owners would be covered.

"The dollars just make your eyes start to water if you leave it open-ended and as soon as you draw a line in the sand, I fully understand that there's always a person just on the other side of that line," he said.

Those excluded would still always have access to the weathertight homes resolutions disputes process, he said.

The leaky homes crisis followed deregulation of the building industry, where a resulting lack of rules meant problems with design and products left thousands of homeowners with continuing problems.

- NZPA