Mayors want Govt to up ante over leaky homes offer

North Shore City Mayor Andrew Williams. Photo / Brett Phibbs

Mayors of the six cities worst hit by leaky home problems are seeking a meeting with Prime Minister John Key to get the Government to cough up more money to fix the problem, North Shore Mayor Andrew Williams said today.

It has been reported that the Government is offering a "short cut deal" to homeowners and councils that want to cut through the legal avenues of compensation for poorly built homes.

Under the proposal, homeowners who drop legal action would have to agree to shoulder 64 per cent of the cost and councils 26 per cent. The Government would chip in 10 per cent.

Without a deal, the councils would be liable for most of the cost for cases settled in court or through the Weathertight Homes Resolution Service.

Mr Williams told Radio New Zealand that a meeting between mayors today had agreed that the Government's proposal was a good starting point for negotiations.

Mayors were pleased that the Government was engaging on the issue, but the offer did not recognise the true extent of the problem.

It amounted to $31 million a year over 25 years and this was insufficient to deal with the problem.

The mayors wanted to meet with Mr Key and the Building Minister Maurice Williamson to discuss the proposal.

There had been no indication from the Government that it was ruling out putting in more money, but also there had been no indication that it was open to the idea either, Mr Williams 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 ongoing problems.

Issues included flaws in design, product, cladding, workmanship, rules and checks.

The cost to the country was estimated at $11.5 billion.

Mr Key said recently people could continue to use the Weathertight Homes Resolution Service and the courts rather than take up the "short cut deal" but he said some leaky homes victims had paid more than won in legal fees.

"So sometimes winning is losing," he said.

He said there were 44,000 people living in leaky homes who could not sell their house or borrow to fix it.

"We'll guarantee them access to funds," Mr Key said.

Elderly people who could not afford repayments could leave the debt to be repaid on their estate, he said.

The key for leaky home owners was to get access to funds so they could move on, he said.

- NZPA