MEDIA RELEASE – For immediate use, 22 September 2011

Law Society reiterates warning to Christchurch homeowners

Reports of Christchurch residents settling insurance or property-related matters without awareness of their full entitlements has caused the New Zealand Law Society to reiterate its warning to homeowners.

The Law Society says settlement agreements are being made to the detriment of Christchurch homeowners with earthquake damaged properties. Some have accepted offers which initially appear financially attractive but have later found them to be below an acceptable value.

Christchurch lawyer Lindsay Lloyd of the Law Society’s Property Law Section says the situation is a clear demonstration of the value of obtaining legal advice.

“Everyone who lives in Christchurch wants to settle their claims and get on with living their lives. 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,” he says.

In a recent case, an insurance company quoted an elderly red zone resident around $20,000 below what the client was legally entitled to. After communicating with the insurance company concerned, a property lawyer soon found that the client would be substantially short-changed if they accepted the quote. Mr Lloyd said if it were not for the lawyer involved, the right questions would not have been asked, and the client would not have received a fair and full entitlement.

Mr Lloyd says another area where problems have been reported is insurance customers being asked to sign agreements with contractors when work is being paid for by EQC. This has 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 says.

Mr Lloyd says that it is pertinent that people are aware of the roles and relationships played by insurance companies, Canterbury Earthquake Recovery Authority, EQC and the Government to make an informed decision.

“While there have been some reports that legal advice is not necessary, consulting an independent property lawyer in stressful and confusing times such as these has never been more important. The role of a property lawyer in this process is largely advisory and is very much needed in Christchurch where there is a myriad of parties to deal with,” he says.

“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 says.

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