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Delayed Govt leaky home owner financial assistance package to be 'up and running this year'

Delayed Govt leaky home owner financial assistance package to be 'up and running this year'

By Gareth Vaughan

The Government says its financial assistance package for leaky home owners, announced amid great fanfare in May last year, will be up and running some time this year despite talks with the major banks dragging on.

(Story updated with detail on number of homes eligible for repair, 10-year limitation, estimated government costs and average repair costs).

A spokeswoman for Building and Construction Minister Maurice Williamson told that discussions with the banks were "progressing well." However, she refused to comment on when the talks might be concluded or on what issues were still to be worked through.

Her comments came after building materials manufacturer and distributor Fletcher Building noted in its interim results yesterday that the Government scheme to "facilitate the remediation of tens of thousands of leaky homes" is now not expected to get underway until the 2012 financial year. Fletcher's 2012 financial year begins in July.

Announcing the plan last May Williamson said the Government aimed to have the new package up and running early this year. However, there's now a bill before Parliament's Local Government and Environment Select Committee - the Weathertight Homes Resolution Service (Financial Assistance Package) Amendment Bill - with submissions open until tomorrow, February 18 and the select committee due to present a final report to Parliament on April 28.

An estimated 23,500 eligible leaky homes to fix as of January

A Department of Building and Housing report dated January this year estimates there are 23,500 eligible leaky dwellings to be fixed. This figure is based on a consensus forecast from a PricewaterhouseCoopers (PwC) report commissioned by the Government in 2009 suggesting 42,000 dwellings were likely to be leaky homes and only about 3,500, or 8%, had been repaired. At the time of the PwC report it was estimated about 9,000 homes had fallen outside a 10-year liability limit, with another 6,000 homes estimated to have fallen outside this limit since the report was issued.

"It is estimated (therefore) there are 23,500 eligible households, so if as officials predict 70% of them take up this financial assistance package that equates to 16,450 leaky homes," the Department of Building and Housing says.

It also notes that the Government expects its share of the financial assistance package to be about NZ$1 billion over five years. The Government says homeowners who think they have a leaky home should lodge a claim under the Weathertight Homes Resolutions Services Act with the Department of Building and Housing.

"This stops the clock on the 10-year limitation for claims," says the Department.

The PwC report estimated between 22,000 and 89,000 homes were leaky with the consensus forecast of 42,000. PwC estimated the total cost of fixing 42,000 leaky homes, including repair and transaction costs, at NZ$11.3 billion in 2008 dollar terms. The Government is currently incurring costs of about NZ$19 million a year running dispute resolution and related services. See the Government's Regulatory Impact Statement on the leaky home financial assistance package here.

The Government estimates the average cost of repair at NZ$27,500 to NZ$410,000 for stand alone houses depending on the level of repair needed from minor to full reclad, and NZ$16,250 to NZ$156,250 per unit for multi unit dwellings.

'Out of our hands'

Williamson's spokeswoman said the progress of any bill was dependent on the Parliamentary system "which we don’t have any say over."

"Fletcher’s statement is correct in as much as the Bill is now looking to be passed in the middle of this year, meaning the scheme will be up and running in 2011," she said.

The Government's plan envisages taxpayers paying for 25% of the repair costs of fixing or rebuilding a Leaky Home, while local government ratepayers pay 25% with the homeowner covering the other 50%. But the package is dependent on home owners borrowing from their banks using existing lending criteria, even though the loan will be backed by a government guarantee.

The problem is many home owners are not in a position to borrow more using existing lending criteria because they are either already heavily indebted or there is little or no equity left in the property to back a loan.

BNZ CEO Andrew Thorburn told last September the discussions between the banks and government were focused on what form the Government guarantee for the loan would take and "what sort of arrangements there might be to share potential losses."

The Government says the Bill is designed to facilitate the supply of financial help to eligible leaky homes owners. It aims to improve the homeowners' access to the finance required to repair their homes and to divert litigation costs toward repair costs.

The Bill sets out that:

  • the Crown and the participating territorial (local) authority will each provide a 25% direct payment to agreed repair costs. However, the participating territorial authority will only make a direct payment if it signed off the work:

  • if an eligible homeowner opts into the scheme, the homeowner must agree not to sue the participating territorial authority and the Crown (eligible homeowners will still be able to pursue legal action against other parties):

  • the Crown will provide assistance to eligible homeowners in accessing bank finance for the remaining agreed repair costs by offering credit support to banks (by way of a limited Crown guarantee or indemnity) for loans made to eligible homeowners who can meet the banks' lending criteria.

Key features of the Bill include:

  • capping the liability of participating territorial authorities (in accordance with a contribution agreement) and the liability of any other contributing parties (for instance, other solvent defendants) for claims being addressed through the financial assistance package. This is designed to ensure that the financial assistance package diverts litigation costs toward repair costs. If participating territorial authorities or other contributing parties are joined to litigation where they have paid a contribution through the financial assistance package, they will face both the cost of the package and potential ongoing costs of litigation, if any:

  • removing the Crown's liability for the failure of repairs made under the financial assistance package and any losses suffered as a result of the actions of the Department of Building and Housing or the Crown under the financial assistance package process. The amendment recognises that the Crown is making a significant contribution to solving the leaky-home problem where it has no liability to do so:

  • authorising the appropriate Minister to give a Crown guarantee or indemnity in respect of loans for repairs made under the financial assistance package:

  • limiting the period in which eligible homeowners may apply to enter the financial assistance package to 5 years from the time the financial assistance package becomes operational.

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Gareth I can't believe you're not addressing who the "eligible" homeowners will be.  You've written on this issue a few times and it seems to me you're just a puppet, not challenging the effectivesness of what they're proposing.

You'll have a real popular story if you investigate then disclose that people will still only be eligible if they apply within the 10 year timeframe from when their property was built.  This fact is a scandal in itself and shows why nobody is in a hurry to get this Bill through and why it probably won't come into effect until 2013 or later if at all.  There were very few leaky homes built after 2002 (ten years ago nearly!!) and the cost to Govt and the benefit to homeowners is reducing as every day ticks over.

Dont' you get this?


FYI, fair point on the eligible home owners issue. I have updated the story and added some detail in on this.

I resent the "puppet" accusation though and by your logic if I was a puppet, I probably wouldn't be covering this issue at all...

The stories I have written at on leaky homes have been looking at it from the perspective of what, if any, share of the cost/losses the banks are going to share should this scheme be launched. I believe the banks do want to see some of the leaky homes fixed because they do hold mortgages on them and repairs should improve the homes value. They just don't want to take losses on new loans and can't generally look to lend in the loose manner of the pre credit crunch world.

I have attempted to get some Australian banking analysts interested in this issue (without success so far) because the mortgage books of the kiwi subsidiaries of the banks they cover have big exposure to this problem.

Fletcher Building also wants to see the repairs done as lots of its pink batts, wallboards etc will be bought and used.

As for the Government, it's clear a major driver is attempting to end the litigation against it and councils. Delaying the inacting of the scheme, as you suggest, could also reduce the govt's cost, which it looks to me as if they've capped at NZ$1b.

By writing this story at least we now have Maurice Williamson (via his mouthpiece) in the archive saying the scheme will be up and running this year. Well, let's see on that... And how many house will be eligible at the end of the day for repairs remains to be seen too.

And what's your view on Bernard Hickey's take on the whole proposal? Can we as a country afford it? -…




I have been overseas for some years and have come back and been bewildered by this subject. Removing emotion the fix seems obvious. Why is the most negative approach that sees bodies and casualties everywhere being followed ?

Have generals from the 1st world war been transported through time and been put in charge. Aren’t we again measuring success by the number of casualties and inches of ground taken with a whole generation of victims and a country paralysed by a futile war fought for the egos of a few.

The 10 year limit is obviously excluding genuine claimants as it is around 10 years that for many is the period when the issues first become really obvious to the affected owner. But the bigger picture is even worse.

If only egos and emotional arguments such as “all taxpayers supporting a minority” were taken out of the equation and only one question was asked and answered we would all be better off.

What is the best and most productive economic way forward with regard to leaky homes for the country as a whole ?

 Maybe I don’t get it but it seems that logic says that Government and Councils (and therefore all of us) would find it cheaper to accept the blame and the costs that go with leaky homes and get the repairs done on a no fault basis and accept that the buck and cost stops with them and therefore us. A no fault scheme paid for by government – that way costs are apportioned correctly (business pays taxes as well).

I say, accept the owners “experts” specifications to fix (with no betterment checked out of course) as specified by the homeowner “experts”. This means one set of costs. So a scheme a bit like ACC but not with ACC deciding and having a policy of “how do we disallow it. ”. We have a policy of “Yes there’s no betterment – costs and application approved.” 

No matter what – taxpayers/ratepayers are going to fork out because our regulatory bodies got it wrong in their regulations and inspections etc. Court judgements make this very clear. At least one firm has a 100% success ratio of winning for claimants or close to that in the courts against the Councils etc. So why bother continuing with this already doomed plan.

When these things go to court Councils usually lose anyway (so we all do) and with one firm it seems they always lose when the owner “goes all the way”.  This should send a message as to what the reality is as far as fighting an owners claim is. Ratepayers and taxpayers are losing because the governments and councils we elect failed for whatever valid or invalid reasons – who cares, we are where we are. It’s our collective fault – that’s what happens in a democracy – we elect and create these bodies.

IF I was a claimant I am not going to accept a shortfall of 5%-50% ( a huge amount of money) of what it costs to fix. I cannot afford to. We go to court and I use the firm that always wins (easy to find) and every taxpayer and ratepayer loses.

If we bail out South Island Finance companies because we think we have to, then why are we baulking at fixing this once and for all when we would actually get a return.

I contend that if the numbers were done it will show it is more economic for all taxpayers, ratepayers and those unfortunate to have a leaky home if the proposition above was adopted. Sure, some percentage of abuse will occur (it does now so that’s no different), so we put the minimum checks and balances re: betterment.

Let’s stop battering 98% of genuine claimants and 100% of tax and ratepayers to punish 2% wrongdoing claimants. Let’s ignore those in the public eye who enjoy “soundbites” that help no one and excite emotions.

Let’s fix things in the most productive way because the alternative is more costly. We don’t need to get into the political dogma and emotional arguments. Let’s just be pragmatic and get on with the best way forward.

The proposition above would give certainty and a boost to individuals, the building industry and Councils. Our court systems could deal with things it really needs to.

Calculate the currently wasted unproductive time, effort and debate that would be freed up for more productive work. I.e. doing things instead of talking about what was done, not done and why not a,b or c etc.

I believe that at present the costs of legal counsel and other experts on opposite sides of the fence in practice equal or outweigh the actual “debated gap” in liability repair costs and how much is left for the owner that is being fought over.

For example defendants look at a claim and say “we only think this should be done and we offer $160,000”. Claimants experts says, “No this needs to be done and it’s 250,000”. 

The gap is $90,000. We all know that the lawyer fees, court time administration,  DH&B administration, Council administration, Government administration, “survey and other experts” reports and inspections will outweigh the $90,000 gap when there are only two parties involved ie Council and claimant.

When we add more liable parties into the mix which is usually the case, such as builders, architects, engineers then we know we will be heading toward the actual claimant fix cost in just debating what should be done without even settling the claim. As claimants usually win this means what could have been settled at $250,000 will usually actually cost us $500,000 or more. Most of that comes via the government or Council paying which is all of us.     

Don’t we owe it to ourselves to settle it in the most sensible manner. Go down a “no fault” route and just pay to fix it, not pay to debate it.

Economically it makes sense to put the money into the “productive” economy – eg building and therefore products, and materials and trades etc. This also lifts emotional clouds and family trauma and break up through stress from thousands of people. (How much is being spent through our health and family court systems system dealing with that factor ? Counsellors, doctors, medicines, lawyers again)

The present approach and the current government proposed scheme puts at least 50% of our money into the “let’s argue and talk and debate” part of the economy. This section needs no help whatsoever and won’t go broke if this lucrative field were to disappear. (Courts, arbitrations, negotiations with huge expert and legal counsel costs). There is always a backlog of this stuff without leaky homes.

Let’s get over our moral outrage that we are all paying etc and get on with moving our country forward.

At present nothing on offer really works for claimants unless they get 100% so they fight it. When they go to court –  they “win” against Councils and not only do we all pay for the repairs that should have been done, but we all get to pay for all those sets of experts or at least 100% of the defence and at least 60% of  the claimants costs. That is not a way forward. It’s fighting in the trenches with nothing gained year after year, but pain and suffering and long term negative effects.  We could end the war now. 


Add over another billion taxpayers dollars to fix leaky school buildings as well. Tolley says this is keeping her awake at night


..... teach the kiddies some " tough-love " realities in their  schooling  ;   sometimes life doesn't just crap on you , it pisses down too ........ get an oil-skin jacket , and stop blubbing yer little wuss ! .......

[ and if Tolley can't sleep at night , she needs to stay awake during the day , in parliament ! ]


There's a bit more to this from what I've heard...

Apparently the first leaky school in Hamilton has recently started a reclad (at many millions to thae taxpayer).  The architect (who's probably being sued) managed to get a look and under the cladding apparently there's ... nothing wrong with it.

There's a whole lot of schools going to be reclad based on reports by certain building surveying firms who are making a fortune, not because they actualy leak (or are even monolithic clad).

I've heard numerous stories like this:

- buildings being reclad, reroofed, rebuilt because of a minor deck leak at milliions of dollars of cost (a few times more than the original construction cost).

- leaky lawyer throwing a tantrum because body corporate of a concrete non-leaky apartment building decided not to pay him $25k each to 'start' legal proceedings.

- another body corporate paying the lawyer $800k to start legal proceedings on a building the lawyer knows they won't retrive any money on.

-buildings being reclad by 'specialist leaky building experts' that need refixing within a few years (all the settlement monies have been spent first time round).


There are some shockingly built leakers - there's also a huge rort going on.




Funny how the individuals responsible for this mess have all walked away and escaped the attention of the media.....what we need to have is a section on this site that deals with the exposure of those who were involved.....which govt ministers....which bureaucrats....which council

Let's have their names and faces and the role they played.....why allow them to hide between the pages of history?


It's a good point, Wolly. Let's have some naming and shaming, and photos published of those who had the largest role in this destruction to our nation's wealth and welfare. Let’s see the picture of some of these faceless nameless bureaucrats in BRANZ and the councils and Govt that were responsible.

Trouble is New Zealanders are so effeminate it's not going to happen.


Good Idea .. shouldnt be a hard task .. most of the data is available .. so for an enterprising group such as chaston,hickey,vaughan & co it would be a matter of porting the data into a searchable web-based database

According to John R Gray
The Home Owners & Buyers Association of New Zealand Inc
Advocacy and Support for Home Owners & Buyers

There is no central register of leaky homes but those that have been assessed by the Weathertight Homes Resolution as a result of the owners making an application to the WHRS are on a list held by the WHRS and available upon request.  The existence of the report will also be listed on the Land Information Memorandum (LIM) report available from the Council and most purchaser make any offer to purchase subject to a LIM report, Building Survey and Finance (and any other conditions appropriate to the construction an site that may be determined).

Unfortunately there are no ‘registered’ building inspectors in New Zealand in terms of any Government administered registration or licensing scheme (we are continuing to push for it!), and the so called professional ‘surveyors’ are a mixed bag.  It is best to start with someone at least from BOINZ ( ) or the NZIBS ( ) who are approved as ‘Pre-Purchase’ Inspectors and who will have professional indemnity insurance (but remember to check with them that it is current).


Oh the councils that contributed to the shite are allowed to charge for the information on a LIM...and a LIM is about as useful as wet toilet paper because it only contains what the council know about...get the picture....a LIM is of very LIMited use....but in the heat of the bubble they were fabulous money makers for councils who just ran off copy after copy....a real cash cow and no comeback.


Compiling a database of that nature would have to be a love-job .. there's no advertising in it .. in fact you'd be bombarded with offers of money to remove identifying entries and names .. until there's none left on the list .. ah .. there you go .. a good greenmail opportunity.


dont buy or build...


1) an apartment 2) anything with <500mm eaves 3) anything with monolithic cladding 4) anything with interally mounted decks or balconies 5) anything with internal guttering 6) anything <200mm FFL from ground


guess this covers abt half akl's stock hahaha. why dont we have a leak prob in the lower south? conservative DESIGN and exp blders who question dodgy DESIGN at the paper stage


its the architects ppl, and their dumbass clients who think they're in majorca


guess this covers abt half akl's stock hahaha

Don’t you believe it!

its the architects ppl, and their dumbass clients who think they're in majorca

Now there you have a valid point. I’ve asked a number of architects I’ve ran into over the last couple of years and I’ve asked each one, ‘How much rain falls in Auckland every year?’  

And almost all of them have given me a blank stare.  And I feel like lashing out and striking them. It’s over a meter (1000mm, 3.28 feet), you fu99857ing halfwit.

I was even more shocked when an architectural student I knew told me he didn’t know, that that sort of thing wasn’t taught at architect school, and even more shocking that they weren’t taught any practicals on how to build. So he said that if he had to build a building, he couldn’t because he didn’t know how to do it. Unbelievable! 


the whole thing is such a debacle! Unbelievable really, the whole thing


Oh come on Matt....of course the whole shitbag is believable...this is New by bubbleheads.


yep really feel for those caught up in it coz as a blder i know it aint a fix, its a rebuild, from scratch...only way to fix a leaky bldg is with a bulldozer