Leaky homes

At the end of June, the Weathertight Homes Resolution Service had received 5500 claims lodged for 6387 properties.

Of total claims, a mere 988, or 18%, have been resolved.

By far the majority of claims are from the Auckland district, with substantial numbers from Wellington and Canterbury, with only 14 from the South.

That few claims have been lodged from this district should not be a matter for indifference by taxpayers here, for someone will have to pay the ultimate multibillion cost of this disaster, and a great deal of pressure is being applied to the Government and the Opposition for taxpayers and/or ratepayers to foot most or even all of it.

The Government's position is that the State bears no liability and will not contribute to recovering the cost, because local councils' building inspection services had approved the "leaky" homes.

Helen Clark believes the establishment of the Weathertight Homes Resolution Service was all the response required by the State.

The National Party, however, has a different view.

Its building and construction spokesman, Nick Smith, believes the Government, including any future National-led government, would have to be part of the solution.

John Key has talked about "fast-tracking" results with a combination involving homeowners, councils and the Government contributing.

Curiously, in the past few days, Miss Clark was briefed by the mayors of Auckland and Wellington on just this proposal.

It is clear the building industry and the local body inspectorate in some parts of the country ignored warnings from experts in the sector who had found many recently completed homes were letting in water due, it was thought, to faulty design and cladding materials, especially after untreated timber was able to be used in house construction after 1996.

Worse, the building code when amended in 1991 did not specify how buildings should be designed and constructed, nor did it make certain construction techniques mandatory.

When the first "leaky homes" were drawn to the attention of those charged with the responsibility of issuing public warnings, nothing was done for at least three years while manufacturers, architects and builders disputed the claims.

In several respects, the "leaky homes" affair is an example of how the competitive market can fail to produce the best result since it did not ensure houses - even low-cost houses built for a particular sector - would be constructed properly, or even safely from a health viewpoint.

It is also an example of how ideology - in this case deregulation - can lead to disaster.

A National government was responsible for the slack 1991 code as well as the 1996 change over using untreated wood, and for ignoring the warning signs which became apparent by 1998.

Perhaps this is why Mr Key and his colleagues are now feeling conscientious about sharing reparation.

A political issue it has certainly now become, whether or not Miss Clark or Mr Key like it.

John Banks, as mayor of Auckland, reckons 80,000 affected families will make it so and he has already briefed the National Party on the subject.

It seems unfair that the owners of such homes be held responsible for repair bills that are a consequence of shoddy building rules, legislation, and technical deficiencies statutorily the responsibility of local authorities.

They are substantially the innocent parties; the old rule of caveat emptor scarcely applies.

But nor should taxpayers be obliged to foot the costs if, as the Government says, they bear no liability: they should only have to contribute to the costs of reparations on the same basis that they contribute generally to disaster events.

And, while local bodies cannot be held to be wholly responsible for the situation, they must certainly bear most of it because they had the legal duty to ensure building inspections fulfilled requirements.

The ultimate cost may be astronomical - the most recent estimate we have seen is $2.1 billion - and taxpayers are already spending millions on the Weathertight Homes Resolutions Service, which was set up to enable owners to find a way to get repairs done and the liability sorted.

But it is not a satisfactory system since it is reported that large numbers of homeowners are achieving only about half the value of repairs, because they have to spend so much paying legal fees and the compensation available often comes nowhere near the actual final costs of restoration.

And it is proving very expensive to them in today's conditions.

That there will be changes to the scheme seems likely but sentiment should not be part of the conclusion and the costs must be borne in proper proportion to liability.

 

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