MEDIA RELEASE – For immediate use, 13 May 2011
Law Society warns Christchurch homeowners
Concern at reports of Christchurch residents settling insurance or property-related matters without awareness of their
full entitlements has caused the New Zealand Law Society to place warning advertisements in Christchurch newspapers The Press and Mainland Press.
The advertisement states that the Law Society is concerned at reports of settlement agreements being made to the
detriment of homeowners who have accepted offers which appear attractive at first but which may be regretted later.
Christchurch lawyer Andrew Logan, who is also deputy chair of the Law Society’s Property Law Section, said the situation
was a clear demonstration of the value of obtaining legal advice.
“A number of lawyers have been contacted by people who have accepted a cash settlement from their insurance company, but
are now finding that the amount is far less than is what is needed to pay for reinstating their property,” he said.
“Everyone who lives in Christchurch is experiencing a stressful and trying situation, and it’s very natural for people
to want to settle their insurance claims and start rebuilding for the future. The problem is that if you don’t take a
careful look at the terms of any settlement agreement, you could find you have bound yourself to accepting something
which is much less than could be gained by negotiation.”
Mr Logan said another area where problems had been reported was insurance customers being asked to sign agreements with
contractors when work was being paid for by EQC. This had sometimes resulted in the customers having to pay a shortfall
in the agreed amount themselves.
“We are also concerned that over the next few years anyone buying or selling a property in the Christchurch region
should sort out responsibility for repairs or other matters caused by the earthquake. The usual agreements do not allow
for this and some specially drafted clauses might be required,” he said.
Mr Logan said the advertisement had been placed by the Law Society and its Property Law Section because of concerns that
people might be signing away their rights without fully appreciating what they were entitled to.
“Everyone has the right to consult a lawyer before committing themselves to signing a contract or agreement. Lawyers are
trained to examine the fine print and the result of any proposed agreement. Their duty is also to ensure that their
client achieves the best possible outcome,” he said.
ENDS