Financial Assistance Package frequently asked questions
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- Who is the Package for?
- Is the Government liable for the problem?
- How much will the Government’s share of the Financial Assistance Package cost the taxpayer?
- Why should taxpayers/ratepayers subsidise the Financial Assistance Package?
- Why doesn’t the Government consider pursuing those architects/builders/developers responsible for leaky homes that have since wound up their companies?
- How is the Government ensuring an issue like leaky homes does not happen again?
- Will investors who own leaky homes be able to apply for the Financial Assistance Package?
- What are the impacts of leaky homes?
- What if a council doesn’t participate?
- Why are participating local councils not going to contribute to repairs costs in some cases?
- With councils facing budget constraints, won’t ratepayers be left footing the bill?
- What about the companies responsible for producing defective products - shouldn’t they be held responsible?
- Why not extend the 10-year claim limit - what if a homeowner doesn’t discover a problem until later?
- Why is legislation required?
- Will the application for the Financial Assistance Package be recorded on a property’s Land Information Memorandum?
- How long can I expect a claim to take under the FAP?
- Can I access the Financial Assistance Package if my claim is already closed?
1. Who is the Package for?
The Financial Assistance Package is another option for owners of leaky homes to get their homes fixed. It will be additional to the current dispute resolution process under the Weathertight Homes Resolution Service Act and home owners will still have the option to pursue other liable parties such as builders, developers and manufacturers of defective products through the Weathertight Homes Tribunal or in the courts.
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2. Is the Government liable for the problem?
The Government has never been found liable to owners of leaky homes. Issues can be laid at the doorstep of a lot of people and organisations, but the blame game has been played for too long.
The Government recognises this is a big problem and therefore is implementing the Financial Assistance Package to help.
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3. How much will the Government’s share of the Financial Assistance Package cost the taxpayer?
The Government is anticipating its share of the Financial Assistance Package will be around $1 billion over five years. This is based on an estimated 70 per cent of affected eligible homeowners taking up this Package.
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4. Why should taxpayers/ratepayers subsidise the Financial Assistance Package?
There is no easy solution to this problem. The priority is getting homes fixed and moving beyond the current state of endless disputes and litigation – the only ones winning out of the current system are the lawyers. This is a New Zealand-wide problem. This Government will play its part in supporting homeowners to move forward.
This is a massive issue for many thousands of New Zealanders and their families who are suffering the social, health and financial impact of leaky homes. This solution provides another way of helping New Zealand out of this bind.
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5. Why doesn’t the Government consider pursuing those architects/builders/developers responsible for leaky homes that have since wound up their companies?
The Government has no role in pursuing compensation on behalf of home owners. The main priority for Government is to assist those affected home owners to get their homes fixed effectively and quickly.
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6. How is the Government ensuring an issue like leaky homes does not happen again?
The Building Act 2004 made changes aimed at reducing the risk of building failures and increasing the skills of those working in the building industry, and include accreditation of building consent authorities, introduction of licensing of building practitioners, a review of the building code and product certification.
In addition, specific measures relating to weathertightness became effective in February 2005.
The low number of new claims relating to houses built in the past five years, since the Building Act 2004, is an indication that the building failure rate has been significantly reduced.
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7. Will investors who own leaky homes be able to apply for the Financial Assistance Package?
Yes, the Package does not discriminate between different types of owners. The key is to get more leaky homes fixed faster.
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8. What are the impacts of leaky homes?
The social, economic and health costs of leaky homes are affecting New Zealanders.
Damp and some mould or fungi can have serious health implications for people living in a leaky home and can worsen the symptoms of illnesses such as asthma, bronchitis and other breathing disorders. In addition, some fungi which grow within wet wall cavities are toxic and may cause flu like symptoms.
More information about the health effects of leaky homes can be found at on the ConsumerBuild website 
.
Information about the social and economic impacts of leaky homes can be found in the PriceWaterhouseCoopers report – Estimating the cost.
9. What if a council doesn’t participate?
The Package does not require every territorial authority to participate, and some may opt in at a later stage.
Following formal invitation in September 2010, the majority of the most affected local authorities have agreed to participate. These represent an estimated 90 per cent of likely weathertight claims. In areas where local councils are not participating in the Package, affected home owners may still be eligible for a Government contribution. Homeowners will retain the option to pursue claims against the local council and other parties if they wish.
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10. Why are participating local councils not going to contribute to repairs costs in some cases?
Councils will not contribute to repair costs if they were not involved in the building work (i.e. where inspection and sign-off was done by a private building certifier).
Eligible home owners would still get the Government’s 25 per cent contribution to agreed repair costs but would need to fund the remaining 75 per cent.
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11. With councils facing budget constraints, won’t ratepayers be left footing the bill?
Ratepayers are already footing the bill as councils currently carry a significant liability and risk. They are also footing the legal bill from the costly litigation process. Some councils have already made provision for rates increases to carry the cost of their claims. This proposal provides a means for local councils to manage the cost to ratepayers of the leaky homes problem in their district through limiting liability and creating certainty.
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12. What about the companies responsible for producing defective products - shouldn’t they be held responsible?
Homeowners will retain any existing right to pursue manufacturers of defective products through the Weathertight Homes Tribunal or the courts to obtain financial redress.
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13. Why not extend the 10-year claim limit - what if a homeowner doesn’t discover a problem until later?
The Government has considered this issue and has decided to leave the 10-year limit as it stands. The 10-year limit is well established and puts a necessary boundary around claims.
As time passes, it becomes harder to identify the causes of damage to homes and more difficult to the link problems in a building to the original construction.
A report into leaky homes by PWC concludes that the vast majority of leaky homes will show evidence of failure within the 10-year period.
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14. Why is legislation required?
Local councils have indicated strong support for the Package, but they were concerned that even if the home owner agrees not to sue them, they could still incur further costs if another party sued by the home owner decided to join the council as a party to their dispute with the homeowner. The only way to provide councils with the level of certainty they require is to legislate so that when the council provides a 25 per cent direct contribution towards the agreed repair costs of a leaky home under the Package the council is protected from any further claim related to the same building issues. .
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15. Will the application for the Financial Assistance Package be recorded on a property’s Land Information Memorandum?
Yes. Because the Financial Assistance Package is provided under the Weathertight Homes Resolution Services Act, the claim will be noted on the LIM as are all claims under the Weathertight Homes Resolution Services Act. When the weathertightness remediation work is completed, that is also noted on the LIM.
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16. How long can I expect a claim to take under the FAP?
The FAP is one option you can choose to get your leaky home repaired. Please bear in mind that in order to qualify for Government and Council funding, you will need to work with a range of parties to meet their eligibility criteria. This will take time.
Because the scheme is new, and there are a variety of steps, it is difficult to be precise as to how long the FAP journey will take you to complete.
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17. Can I access the Financial Assistance Package if my claim is already closed?
No. The FAP is intended to get more leaky homes fixed and is not a compensation package for people who have already repaired.
If you have not yet started repairs, you need to have an open eligible claim, which will have been determined as WHRS eligible/FAP qualified by the Department of Building and Housing before you can proceed.
If you started repairs prior to 28 July 2011, you must have had an open and eligible claim as at 28 July 2011 and must fit within the exemption for repaired properties set out in clause 1H or clause 1I of the contribution criteria.
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