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Financial Assistance Package Now Available for Leaky Home Owners

The Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Act 2010 (the Act) took effect from 25 July 2011.   The aim of the Financial Assistance Package (FAP) is to get leaky homes fixed fast.

The Act provides that leaky home owners may be eligible to claim for 50% of the agreed repairs costs of fixing a dwelling.  The FAP means that the government will contribute 25% and the relevant local council 25% of repair costs for eligible claims.

In order to be eligible for the FAP, a dwelling must have at least had a report completed by an assessor from the Weathertight Homes Resolution Service (WHRS).  The Chief Executive of the Department of Building and Housing then decides on whether a claim is eligible.

The council's contribution only applies where it was involved in the construction of the dwelling; that is,  where the council issued the building consent or carried out inspections during construction or provided a code compliance certificate.  If these stages of construction were undertaken by private certifiers, then home owners can only claim the government's 25%.

Leaky home owners will have to prove that they have the necessary financial resources to pay either 50% or 75% of the repair costs.  Some of the key points of the FAP include:
 
  • The council may effectively veto eligibility for the government's 25% contribution if it does not agree to a claimant receiving the FAP.  This is likely to be in cases where the council is already being sued as a party to proceedings and it has incurred significant cost in defending the litigation.
  • An existing claimant who has not yet had their claim adjudicated by the Weathertight Homes Tribunal (WHT) has three months from 28 July 2011 to tell the Department of Building and Housing/WHRS that they want to be considered for the FAP.
  • Those existing eligible claimants who have repaired or are repairing their homes who have a full assessors report must have had a building consent granted for the repairs on or after 1 November 2009.  The government has set this as  the cut off date for those who've repaired or started repairing their homes.
  • If an eligible claimant does not have a full assessors report but has repaired or is carrying out repairs to the dwelling, they may still be able to claim the FAP subject to certain criteria.  But a building consent for the repairs must have been granted on or after 1 November 2009.
  • If the claimant opts into the FAP, they can still pursue the other parties to the claim through either WHT adjudication or the courts to recover the 50% or 75% shortfall.
  • Parties to a claim, other than the claimant, council or government (in either the WHT adjudication or court proceedings) can also avoid ongoing litigation by entering into a contribution agreement for the costs of repairing a dwelling.
  • Prior to any FAP payment from either the government or council, the claimant must either discontinue their claim or stay the court proceedings.  Once the payment under the FAP is made the claimant may then restart proceedings against those non contributing parties.

If the dwelling is fixed prior to the FAP coming in the owner may still be eligible to get the government's 25% contribution but only if the consent/inspections were done by private certifiers and the building consent was issued post November 2009. 

Some commentators are predicting that only 5% of those 30,000 plus leaky home owners will take up the FAP.  Time will tell.
 

 

Contact:

Jason Mackie
Associate
DDI: (+64 9) 915 2414
Email: jason.mackie@fortunemanning.co.nz
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