Cosgrove Clayton: Weathertight Homes Resolution Services Amendment Bill — First Reading 
Cosgrove Clayton: Weathertight Homes Resolution Services Amendment Bill — First Reading 
[Volume:633;Page:5067] 
Hon CLAYTON COSGROVE (Minister for Building Issues) 
: 
 I move  
That the Weathertight Homes Resolution Services Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the Weathertight Homes Resolution Services Amendment Bill be considered by the Social Services Committee that the committee report finally to the House on or before 4 December 2006 and that the committee have the authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 192 and 195(1)(b) and (c). This time frame is necessary because the legislation needs to be enacted as soon as possible so that the enhancements to the Weathertight Homes Resolution Service can commence in early 2007 as has been publicly signalled. 
With this amending legislation the Government is improving the effectiveness and efficiency of the Weathertight Homes Resolution Service. The amendments follow a substantial review of the service. That review sought the views of industry representatives consumer groups and territorial authorities and included analysis of the needs—[ 
Interruption 
] 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Would members leaving the Chamber please show some courtesy to the member trying to address it. It is a longstanding convention that members should not conduct conversations in the House unless it is strictly necessary to do so and then only so as not to disturb proceedings. 
Hon CLAYTON COSGROVE 
:—of all the involved parties. The bill is central to the Government’s commitment to actively help resolve the so-called leaky homes situation. The Weathertight Homes Resolution Service was set up in 2002 as a call to arms to deal with a major problem. Although people have gained successful settlements so far the service is too slow and is being drawn out by lawyers and other so-called experts. The review identified the need to strengthen and streamline the Weathertight Homes Resolution Service by improving the efficiency and effectiveness of each stage within the Weathertight Homes Resolution Service process by allowing homeowners to claim for a similar range of damages as that they would be able to claim in a court process and by helping owners of units within multi-unit apartment complexes to register claims and resolve disputes. 
The bill sets out to achieve all these outcomes. It will also contribute towards the Government’s strategic goal of supporting families young and old by helping to ensure that homes are healthy and dry. Since buying a home is often the biggest single investment that Kiwis make the bill also contributes to this country’s economic transformation because it is critical that people have the confidence to invest. The reforms in this bill build on the Government’s commitment to homeowners to provide a speedier lower-cost alternative to the court system for resolving leaky building claims. In essence the provisions of the bill will help owners of leaky homes resolve their disputes quicker get compensation from the liable parties and get their homes repaired. This is another way the Government is ensuring New Zealanders have access to quality homes and buildings that meet their needs. 
 The main components of the proposed legislation are as follows. The bill introduces a new streamlined dispute resolution process with compulsory pre-hearing conferencing for standard claims before claims move to time-limited mediation. Claims that do not achieve a mediated solution move to adjudication. The bill also encourages informal dispute resolution and puts in place several mechanisms to speed up and streamline the claims processes such as establishing a new process for low-value claims. Faster resolution of disputes will also be aided by the provision of a comprehensive assistance package and guidance for claimants and respondents. This includes more comprehensive Weathertight Homes Resolution Service assessment reports which can become expert evidence potentially saving the parties thousands of dollars by not having to get their own specialist reports done. Importantly the amendments allow claimants to claim for potential as well as actual non-weathertight damage. 
The bill sets out objectives for a less adversarial more investigative and swifter adjudication process. Collectively these measures move the service towards an investigative approach to dispute resolution so that the process is not only faster and less costly for parties but also less litigious. Adjudicators can currently award costs against a party that they consider to have caused unnecessary costs either by acting in bad faith or through making allegations or objections without substantial merit. These powers will remain in the Act. However the bill also introduces new offence provisions with fines attached for other negative behaviours such as failure to comply with an adjudicator’s order or summons. This will help adjudicators to get on with their jobs. The Government has also decided to make the adjudication function independent of the Department of Building and Housing. 
The Ministry of Justice will be responsible for establishing and administering the new Weathertight Homes Tribunal. This will enhance consumer and respondent confidence in the adjudication service improve acceptance of the authority of the adjudicators and provide more institutional support for adjudicators. It will also strengthen the role of Weathertight Homes Resolution Service advisers by removing any perceived conflict of interest in the provision of both an advisory and an adjudication role by the department. 
The bill removes obstacles to bodies corporate bringing claims for multi-unit apartment complexes by setting voting thresholds that are not unanimous so that “hold-out” situations are less likely to occur. This is especially important given that around 70 percent of claimants with the Weathertight Homes Resolution Service are unit title apartment owners. Collectively the measures in the amendment bill will reduce the average time for claims to be resolved; result in homeowners and respondents incurring lower legal and evidential costs than they do at present when using the Weathertight Homes Resolution Service; increase the proportion of disputes resolved through early negotiation; ensure that homeowners receive an accurate and comprehensive assessment of the damage to their houses including what repair work is needed; result in homeowners being better prepared for the dispute resolution process; improve the independence of the adjudication process; and remove existing barriers to the registration of claims and the resolution of disputes by owners of units within multi-unit apartment complexes. 
The bill will also improve the weathertightness information available to prospective homebuyers by requiring Weathertight Homes Resolution Service notices to be placed on local authority land information memorandum reports. The new requirement means that potential buyers should know whether a house has been fixed as a Weathertight Homes Resolution Service notice will be listed along with any related consent repair work and code compliance certification. An accompanying consumer education campaign will also encourage prospective homebuyers to seek these reports before buying in order to make informed purchase decisions. 
The Government is also developing a financial assistance pilot for the worst-affected owners of leaky homes. We put aside $7.1 million in the last Budget for lending assistance under the 2-year pilot programme. The Housing New Zealand Corporation along with the Department of Building and Housing is currently developing eligibility criteria and lending conditions for the pilot financial assistance scheme. Work is progressing well and announcements will be made when final decisions have been made which is likely to be well within the next couple of months. 
It is also important to note that the Weathertight Homes Resolution Service was established as a specific solution to deal with a specific issue. Changes in the Building Act 2004 are now addressing the systemic failures across the building and construction sector that led to the leaky home problems. These changes include the licensing of those who design and build whilst at the same time specifically protecting the do-it-yourself or DIY tradition in New Zealand; a review of the building code; an auditing and accreditation scheme for building consent authorities; sector and community education; the investigation of a home warranty insurance scheme; and building product certification. These measures are part of a package of reforms to help ensure that homes are built right the first time and that homeowners have confidence in them. 
This bill therefore puts in a time limit so that homes built or altered after 31 December 2011 will no longer be eligible to use the Weathertight Homes Resolution Service. In essence this means that the Weathertight Homes Resolution Service will cease around 2021. 
Finally I thank those groups who have provided huge assistance in the community including the Leaky Homes Action Group which has endorsed this package of measures. It has provided invaluable assistance along with territorial local authorities and others. 
This is a serious issue. I will not politicise this issue nor have I engaged in political banter on it. This is about people’s lives. This is about changing a regime that was enacted over a decade ago when the industry was completely deregulated so that there were virtually no rules and all sorts of people could strap on a tool belt and call themselves builders and therefore the cowboys were let into the system. That was aided and abetted by the deliberate destruction of the apprenticeship system by the then Government. In essence if there are no rules and minimum standards and if young people are not trained to become master tradespeople of the future then that is a recipe for disaster. 
I look forward to the passage of this bill. This bill is about helping our communities out of the problem created by many stakeholders.