Leaky homes costs rising throughout Otago

Source: Otago Daily Times

By Chris Morris
Sunday Apr 7, 2013

The leaky home in Leithton Close, in the Dunedin suburb of Glenleith. Photo by Peter McIntosh.

The cost of dealing with leaky homes in Otago is climbing for councils and ratepayers, but some homeowners with claims appear to be missing a crucial deadline.

Figures released to the Otago Daily Times following an official information request show the Dunedin City Council has now settled with four homeowners at a total cost of $299,000. That was an increase from 2010, when the council last confirmed it had been involved in just two settlements, totalling $182,000, since 2006. The two most recent settlements had occurred within the last year, and included a deal reached after the owners of 36 Leithton Close, in Dunedin, fought a high-profile battle for compensation from the council and other parties.

That deal - which included an undisclosed sum paid by the council to the owners, Deborah Wai Kapohe and husband Michael Beazley - lifted the number of settlements in Dunedin from two to three. Council regulatory services manager Kevin Thompson confirmed this week the council had also been involved in a fourth settlement late last year, involving a ''small'' sum paid out as part of a wider deal.

''It was a minor one, if you can call them minor.''

It was also the first made by the council as part of the Weathertight Homes Resolution Services financial assistance package, which split costs between the Government (25%), the council (25%) and homeowners (50%). The Central Otago District Council has settled with three homeowners, at a total cost of $172,000, since 2006, council planning and environment manager Louise van der Voort confirmed. The most recent settlement occurred in 2011, but she would not detail the individual sums involved in each.

The Queenstown Lakes District Council appeared to face the biggest problem in Otago and Southland, as the Department of Building and Housing (DBH) listed nine active claims - yet to be resolved - involving 35 individual properties. That was also among the highest number of active claims faced by any council in the country, outside the hotspots of Auckland, Tauranga, Wellington and Christchurch. In addition, the DBH figures showed the QLDC had already settled 19 claims, although council staff were unable to provide details of the sums involved when approached this week.

In 2011, it was reported the council estimated it could face costs totalling $4 million from a handful of active leaky home claims, if found to be liable. DBH figures showed the Central Otago, Waitaki and Clutha district councils did not face any active claims, while Invercargill City Council had one.

By comparison, Auckland - where the problem was at its worst - had more than 3000 properties with active claims, according to DBH figures.



In Dunedin, secrecy still surrounded the exact sum paid by the council to settle the claim brought by the owners of 36 Leithton Close, but the council's figures suggested it might be close to a six-figure sum. Mr Thompson would not comment about any of the council's deals in detail, citing confidentiality clauses, but said the figures showed Dunedin's leaky home problem remained ''very small''.

''Ideally, we don't want any claims. However, compared to other councils, we're doing well.''

However, the DBH figures showed a further 10 claims from within Dunedin had been closed without resolution in recent years. Mr Thompson confirmed ''three or four'' related to homeowners who claimed to have leaky home problems, but were rebuffed because they had left their approaches too late. Under the WHRS system, homeowners had to lodge any claim for compensation within 10 years of the home's completion to qualify for help, if their claim was accepted.

The figure was higher again in the Queenstown Lakes area, where a further 24 claims had been closed without resolution, the DBH figures showed. Reconstruct managing director David Holloway - whose company dealt with hundreds of leaky homes in Auckland - had previously warned that some owners of leaky homes in Dunedin and Otago risked missing out. That was because climatic conditions in the South meant problems were slower to emerge than in Auckland, meaning the 10-year deadline could be missed, he said.

Mr Thompson denied the problem was bigger than it appeared in the South, saying that was ''not our finding''.

''There certainly hasn't been an increase in claims outside the 10 years, and I believe we would have seen that by now, well and truly.''

Asked if the council expected to face more claims in future, Mr Thompson said that was ''unknown'' but he was encouraged by the low number of claims and the small size of the council's $299,000 bill to date.

''That could easily be just one claim somewhere else ... that's very small in the scheme of things.''

Otago Daily Times