Weathertight claims speeded up

Thousands of owners of leaky homes have been offered a streamlined process for getting their houses fixed after a nine-month review of the struggling Weathertight Homes Resolution Service.

But the prospect of money upfront for repairs will be largely reserved for those who can afford to service $100,000-plus bank loans on top of existing commitments.

A tiny minority of owners turned down by banks will qualify for a pilot Government loan scheme - but critics say the $7.1 million allocated over two years could be spent on a single apartment complex.

The eagerly awaited review, announced yesterday by Building Issues Minister Clayton Cosgrove, was billed as a lifeline for homeowners embroiled in protracted legal disputes.

While the weathertight service overhaul for up to 40,000 affected homeowners is broadly welcomed, the loan scheme at market interest rates devastated some expectant owners.

Mission Bay resident Russell Glenister said he had put his three-year-old claim on hold awaiting the review. "If that's the best they can do, what a waste of time."

He faced a $200,000 repair bill on his two-storey townhouse and "now I still don't know what to do".

Owners were given false hope on Monday when National MP Nick Smith claimed the Government planned a loans scheme with interest discounted to 4 per cent for those with weathertight service claims.

Green Bay resident Joy Greer, who has a three-year-old claim, said that as a single-income mother of three she could not afford a loan for repairs estimated at $50,000 to $200,000.

"Anyway, why should I have to take out a mortgage because someone else cocked up? The whole injustice of it is the frustrating thing."

Home rebuilding specialist Harry Dillon, of Reconstruct, said the $7.1 million pilot for those rejected by banks "isn't going to touch the sides".

"I'm absolutely devastated - I thought we had some progress."

Building surveyor Greg O'Sullivan said the pilot was a joke. "To talk about $7.1 million in the whole of New Zealand and talk about market interest rates - it's just a sham."

But Mr Cosgrove said the Government's commitment to guarantee bank loans would open the way for thousands to have their homes repaired - then use the weathertight service or the courts to chase liable parties.

The average cost of full recladding and repair of leaky homes is put at $180,000 -with some topping $500,000 - and most owners struggle to meet bank lending criteria.

Leading lenders the Weekend Herald approached yesterday were circumspect, saying they needed to know more before deciding whether to support the guarantee scheme.

"We would have to look at it and make a decision very much on a case-by-case basis," said a spokesman for ANZ National.

A Westpac spokesman said banks would need to carefully consider the eligibility criteria.

The $30 million weathertight service overhaul follows complaints of delays, inadequate assessments and owners being bullied in mediation.

Mr Cosgrove said the streamlining would halve the average 14 months taken for resolutions.

Changes to the Unit Titles Act would bring thousands in apartment blocks into the resolution process while assessments would be broadened to cover likely as well as known weathertightness defects.

He expected the reforms to encourage many homeowners who were too scared to admit they had a leaky home to come forward. They were part of a suite of changes to transform the building industry to ensure homes were "built right first time".

Leaky Homes Action Group chairman John Gray welcomed the new regime. Claimants who obtained a loan could get their homes fixed and know the causes and full costs before pursuing liable parties.

"They'll be under no pressure to take a mediated settlement and it will be in respondents' interest to make more meaningful settlements."

He expected councils would continue to pay most of the costs, but owners whose homes were signed off by private certifiers (whose Government-approved insurance scheme collapsed) "will still have enormous trouble on their hands".

Mr Gray said the package also failed to address the plight of owners outside the 10-year limit on claims.


WEATHERTIGHT OVERHAUL

* Streamlined processes, including pre-hearing conferences.

* Time limits on mediation.

* Adjudicator powers strengthened.

* More robust assessments.

* Class actions for multi-units.

* Case managers to assist claimants.

* Small claims fast-tracked.