Hush-hush deal on leaky apartments

A multimillion-dollar settlement has been quietly negotiated for one of Wellington's most prominent leaky buildings.

Details of the deal – thought to be one of the city's biggest leaky-building settlements – for the apartment block at 166 Oriental Parade are confidential. Even the Weathertight Homes Tribunal is unaware of the final figure.

However, it is understood to be substantial. A year ago the repair bill was estimated at $4 million.

The settlement comes weeks after the announcement of a relief package for leaky-home owners that would see the Government and councils split half the repair costs, with the homeowners picking up the remainder.

But big settlements such as this illustrated why some people were unlikely to use the Government package, those involved in leaky-home claims say.

The full extent of the problems at 166 Oriental Parade – including defects with the roof, balconies, glazing, cladding, waterproof membranes and inadequate ground clearances – became apparent in 2005.

The apartments were built in the late 1990s and today their rateable values range from $1.67m to $2.35m. They are next door to mayor Kerry Prendergast's apartment building, which is also being investigated for leaks.

The owners of the No 166 apartments funded the repairs, and went to the Weathertight Homes Tribunal to recover costs last year. Their claim was against developers Lance James and Wayne Wright, andWellington City Council. James is now serving two years for tax evasion.

The chairwoman of the Oriental Bay block's body corporate, Sue Wood, refused to comment. Confidentiality was the "No1 clause" in the agreement, the former National Party president said.

Repairs were expected to be completed within months, which was a relief, she said.

Mr Wright would not comment on settlement details, but said everyone was happy with the outcome.

The Tauranga businessman previously said he did not believe he was liable because he was only a financier. He was still unhappy at being involved, but it could not be avoided. "It needed to be resolved."

The council declined to comment.

The Government estimates 42,000 buildings constructed between 1992 and 2005 are likely to be leaky. Of those, about 27,000 would be eligible for the Government's relief package.

Full details of how it will operate will be issued early next year. But lawyer Paul Grimshaw, who specialises in leaky-home cases, said he would be advising people against the package.

Although it could be good for small claims, anyone with a significant claim should go for as much reimbursement as possible, he said. "You can usually get a settlement which is pretty close to the amount that you have spent."

Home Owners and Buyers Association president John Gray said most homeowners would be far better off using adjudication or mediation, rather than the Government package.

"In most cases we're going to get a greater level of satisfaction than the 50 per cent that's on offer."

Wellington lawyer Dan Parker was involved in the Oriental Parade settlement. He could not comment on the case, but said the Government package was a good step for leaky-home owners.

Some would still prefer to negotiate, but it would depend on individual circumstances. "For some owners that will be a very good option."

The tribunal said about 90 per cent of claims were resolved by settlement, and conditions were confidential unless requested otherwise. The largest claim now with the tribunal is for $15m.