Leaky apartments may miss out on compensation

Nearly a quarter of all leaky home owners could be excluded from the Government's assistance package after a bid to include apartments was rejected.

The Labour Party last night attempted to introduce an amendment to the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill but it was defeated after being opposed by the National, ACT, Maori and United Future parties.

Labour's building and construction spokesman Phil Twyford said it was not widely understood that apartments, which make up 24 percent of all leaky homes, would not be covered by the assistance package.

Under the package the Government and local authorities each contribute 25 percent of agreed repair costs with affected homeowners funding the remaining 50 percent backed by a government loan guarantee.

Mr Twyford said body corporates would be required to get a 75 per cent agreement from apartment owners they could meet their 50 per cent share of fixing the damage to access the package. ''That will make it extremely difficult to do. Often people won't be able to find that 50 per cent.''

The other problem was that banks wouldn't lend to bodies corporate, he said. ''Under the law bodies corporate can't mortgage collective property.''

Labour's amendment would have allowed the Government to extend the loan guarantee to bodies corporate, Mr Twyfod said.

The Government did not provide a reason why it was rejecting Labour's proposal, he said. ''I suspect it's budgetary. There weren't any dollars left.''

Building and Construction Minister Maurice Williamson last night told Parliament the package was never going to be perfect.

''It never was, it never will be. But I'm really pleased it's an attempt at getting a lot done other than the alternative which was to do nothing and leave people stranded.''

People were always going to feel aggrieved when a line had to be drawn, but he said ''the dollars just make your eyes water if you leave it open ended''.

Apartment owners will still be able access the weathertight homes resolutions disputes process and can seek reparation through the courts.

A 2009 PricewaterhouseCoopers report estimated between 22,000 and 89,000 homes built during the 1990s were affected, with 42,000 dwellings likely to be leaky homes. The report estimated it would cost between $11 billion and $22 billion to fix the rotting homes.

The Bill is expected to be passed next week.