Leaky homes could help building shortfall, says law expert

by Anne Gibson – NZ Herald

A legal expert has called for urgent action on the rotting-home front.

Stuart Robertson, a Kensington Swan partner and specialist in construction litigation, said victims should be getting a better deal.

He wants to mobilise the construction workforce to fix thousands of houses, estimated in an official Government report not yet released to cost about $11.5 billion.

Builders need work, many houses leak and victims are suffering such serious physical and mental health problems that a radical change and the state’s intervention is crucial, he said.

“There are a number of immediate factors that cry out for the Government to step in and take a more active role in the resolution of the current leaky-building claims,” Mr Robertson said.

Less than a quarter of leaky-building claims resulted in houses being fixed, he said.

Owners are not recovering enough to fix homes, yet the recession has resulted in a readily available pool of skilled builders begging for work.

Homeowners could get their places fixed and the Government should then pursue a claim on their behalf, he said.

Crown Law should establish a separate leaky building prosecution division and fight for compensation.

“As the Crown makes recoveries, the money would fund further remedial repairs and prosecution costs. The Government would carry six to 12 months of repair and prosecution costs at any one time.

“Under this type of scheme, the Government would be solving a significant social problem and assisting with unemployment and the recession,” he said.

Mr Robertson is a former electrician and computer hardware engineer who has appeared at the Weathertight Homes Tribunal.

But Paul Grimshaw, whose law firm specialises in leaky-building litigation on behalf of about 6000 clients, dismissed his suggestions.

“The idea that the Government would pay out-of-work builders to fix all the homes and then go after the bad guys is unworkable.

“It means forking out literally billions of dollars – which presumably the Government doesn’t have – in the first instance, even if it then recovers those billions later on,” Mr Grimshaw said.

Instead, he backs the house warranty suggestion of Building and Construction Minister Maurice Williamson as a more workable solution.

A new-home warranty insurance scheme is part of the big changes being planned. The warranty could be through insurance companies or builder guarantees but details are yet to be announced.

Mr Williamson is promising a radical change – partly to cut lawyers out of the scene.

“We are going to completely revamp the whole process because the whole weather-tight resolution process so far has seen huge chunks of money go into the hands of lawyers and litigation and tribunals and almost nothing going into fixing the rotting buildings,” Mr Williamson told the latest issue of Build magazine.