Hon Dr Nick Smith
National Party Building and Construction spokesman

10 March 2005

Labour budgets $6m to fight owners of leaky homes

A parliamentary select committee was today told that Labour is to spend $5.9m fighting owners of leaky homes, and that it will not participate in weathertight homes resolution service mediations, despite evidence of failings by the Building Industry Authority.

National’s Building and Construction spokesman, Dr Nick Smith, says it is hypocritical of Labour to be telling builders, designers and councils to resolve issues through the resolution service rather than spend money on court cases, while it refuses to participate and spends millions on lawyers to fight innocent homeowners.

“This is a case of saying one thing but doing the opposite.”

Dr Smith highlighted the case of Tony and Lara Cox, of Whangarei, who spent $190,000 on their home, have a mortgage of $60,000, but who have to find at least $160,000 for repairs. It has been recommended the house be demolished.

“This case highlights Labour’s heartlessness toward the thousands of families that have been caught in this scandal.

“The builder and certifier used by the Cox family have gone broke. The BIA had a legal requirement to ensure the certifier had insurance for ‘any insurable civil liability’ but failed to do so.

Dr Smith revealed at the select committee that the family wrote to the BIA seeking the name of the certifier’s insurer, but were told it could not be released because it was ‘commercially sensitive’.

“The fact was the BIA had not made sure the certifier had proper insurance, in breach of the Act,” says Dr Smith.

“The BIA and its successor, the Department of Building and Housing, have also refused to participate in any WHRS mediation with the Cox family. This leaves the family destitute and with nowhere to go.

“Building and Housing accepted at the select committee that the BIA had got it wrong with the rules over the use of untreated timber and its inadequate insurance arrangements. Those rules were changed last year.

“This contradicts its claims in court and its refusal to participate in mediation on the basis they had done nothing wrong.

“This response from Labour is callous and hypocritical,” says Dr Smith. “The Prime Minister’ s speeches about an ‘ownership society’ ring hollow with this sort of conduct from her Building and Housing Department.”

ENDS

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