The new Auckland Council says leaky homes claims are unlikely to have an "immediate impact" on rates after the Supreme Court ruled the former North Shore City Council (NCC) was responsible for two damaged homes.
In a test case, the Supreme Court on Friday ruled in favour of owners of leaky homes and rejected an appeal by the former NCC over its responsibilty.
Contrary to the council's arguments, the court said it owed a duty of care to owners in large scale developments.
It also confirmed the onus was on the council to ensure the buildings complied with the building code, but the council's inspector had failed to notice and respond to deficiencies.
The 12-unit Byron Ave apartments in Takapuna and the 21-unit Sunset Terraces in Mairangi Bay suffered badly from leaks and the owners had long battles through the courts, concluding with Friday's Supreme Courts decision awarding them millions of dollars.
The court's decision has implications of liability for every other local body and the bill could stretch to billions.
Auckland Council (AC), which takes on liability for disbanded councils in the Auckland region including North Shore , would be briefed about the leaky home issue and its future claims management strategy in the new year, AC chief executive, Doug McKay said.
Contrary to some reports the judgement only reaffirmed current case law, Mr McKay said.
"Whilst we still do not know the full extent of all leaky homes claims, there is unlikely to be any immediate impact on rates," he said.
The Government's financial assistance package, which was expected to be available next year, was an ideal option for affected homeowners and would mean no expensive legal bills, Mr McKay said.
As part of the package the Government would meet 25 percent of agreed repair costs, with local councils contributing 25 percent and homeowners funding the remaining 50 percent.
In July 2009, a PricewaterhouseCoopers report estimated between 22,000 and 89,000 homes built during the 1990s were affected, with 42,000 dwellings likely to be leaky homes.
The report estimated it would cost New Zealand between $11 billion and $22b to fix the rotting homes.
Only a minority have been repaired to date.
