Victims fear losing millions if law changes

Leaky home owners predict many will lose millions of dollars selling their houses if a proposed law change goes ahead.

The Leaky Homes Action Group is protesting against a clause in the Government's Weathertight Homes Resolution Service Amendment Bill, which is expected to be passed before Christmas.

The suggested law change would force victims who have sold their houses to drop any claims for compensation from the Government-run Weathertight Homes Resolution Service.

In its submission to the select committee, the group said many leaky home victims were being forced to sell their dwellings because it was "the only way out".

The bill says the claim on the property can proceed because the new homeowner will be able to continue the action.

But the group, which represents about 2000 victims and is the largest organisation in the $1 billion crisis, wants the homeowner rather than the property tagged and says this amendment is unrealistic. "The original owner should be able to continue their claim under the act," the group said.

The former homeowner's claim would be based on the loss suffered when selling the property and this could be calculated using the difference between the net sale price and a registered valuation of the house without leaks.

The group predicted millions of dollars would be lost if the new law was not amended.

"We will see a significant number of owners suffer undue losses from which they are unlikely to recover," the submission said.

"There are those that will have finished the repairs and have positively established their losses but also find themselves in a position where they have to sell their home. We do not believe that they should suffer by having their claims terminated, especially when they have proceeded to undertake the necessary repairs. Their losses will be evident and we see no reason why they should not be permitted to continue with their claim."

In August, Building Issues Minister Clayton Cosgrove introduced the bill, saying it would significantly improve existing law. He refused to comment on the group's submission, saying it was inappropriate to make any statements while the bill was in the select committee phase.

The group said it generally favoured the changes proposed because the act was "deeply flawed" and the existing law was responsible for delaying claims.

But it criticised the Government for failing to broaden the scope of the service's jurisdiction to consider all building deficiencies and not just weathertightness. Leaky homes often had other building defects yet the Government had abandoned its chance to establish a specialist building disputes tribunal to address the wider issues.

The group also opposes a 10-year time limit on houses for the service, citing British rules with a 15-year limit. The benchmark was initially set because it was thought any deficiencies would manifest themselves in 10 years but the group said this was now obviously not the case. Victims should be able to bring claims for other defects.

New rules

* The Government wants leaky home owners who sell their houses to drop compensation claims made to the Government-run Weathertight Homes Resolution Service.

* It says the claim passes to the new home owner instead.

* The Leaky Homes Action Group says the change will deny home owners the chance to win back millions on the lost value of their homes.