WEATHERTIGHT HOMES

FINANCIAL ASSISTANCE

PACKAGE (FAP)

By Michelle Paddison September 2011

WHAT IS THE ASSISTANCE

Financial assistance measures:

1. A financial support facility towards agreed repair costs in

the form of:

– A financial contribution from the Crown or if relevant

a territorial authority

– A financial contribution/services/goods from any other

additional contributing party

WHAT IS THE ASSISTANCE

2. Credit support facility – guarantee or indemnity

– For loans to pay for balance of costs

– The Minister (on behalf of the Crown) can give a written guarantee or indemnity in respect of loans (or loan restructure refinance) advanced by a lender (which are Banks registered in accordance with the Reserve Bank of New Zealand Act 1989) for balance of agreed repair costs not covered by financial contributions (125I)

– If Crown pays any money under the guarantee or indemnity it is a debt from the Crown to the person for whom the guarantee or indemnity was given (125L)

HOW MUCH / FOR WHAT?

• How much?

While it is being advertised as 25% government and 25%

participating authority, (and the DHB website confirms

these percentages) the Act is actually silent on exactly

how much.

So essentially there is no legislative guarantee that a party

will get the 50% or even 25% from the Crown.

HOW MUCH / FOR WHAT?

• For what?

Agreed repairs incurred or may incur to effect repairs

agreed in a contribution agreement

Repairs = rectify damage due to water penetration and

make dwelling weathertight

HOW MUCH / FOR WHAT?

Includes:

– Associated costs (reasonable costs that claimant may incur under contribution agreement of valuer's report, design work for repairs, project management, building consent, resource consent, alternative accommodation, storage)

– Non financial contributions by additional contributing party

– Excludes legal costs or expenses

CONTRIBUTION AGREEMENT

• Agreement between claimant, contributing party

(Crown), and additional contributing party

• Sets out terms and conditions of financial

assistance measures

• In civil proceedings Court must take into account

contributions

WHO CAN APPLY?

• Qualifying claimants = eligible claim and contribution criteria

1. Eligible claim • If dwellinghouse then the claimant owns it

• If multi-unit (claimant is the representative in accordance with the Act)

• Built before 1 January 2012 and 10 years before the date on which the claim is brought

• Water penetrated because of design, construction, alteration or materials used which has caused damage to it

WHO CAN APPLY?

2. Gazette criteria (28 July 2011)

To qualify for Crown contribution:

• Cannot have been the subject of a settled

weathertight claim with a Participating Territorial

Authority (PTA)

• If claimant has applied for adjudication or in civil

proceedings and PTA a party, the PTA must agree

to the claimant receiving a financial contribution

under the FPA and claimant must withdraw from

adjudication or civil proceedings

WHO CAN APPLY?

• Must have a full Assessors Report (or Concise Report if

requested by DHB)

• Must have an Agreed Repair Plan (prepared by qualified

designer)

• Must demonstrate to the Department's satisfaction that they

can pay their share of the costs of the works shown in the

Agreed Repair Plan (taking into account contributions by

Crown and any PTA)

• If carried out repairs (are eligible, full assessors report) are

eligible for a contribution if building consent for repairs

granted on or after 1 November 2009, repairs comply with

laws and are satisfactory to the Department

WHO CAN APPLY?

• To qualify for a contribution from PTA:

• Meet above criteria

• If involved in civil proceedings and PTA is a

party and discontinues those proceedings

before lodging a claim, the claimant will not

quality for a contribution from the PTA

unless the PTA agrees

WHO CAN APPLY?

• The PTA must owe a duty of care (generally

intended use must have been for residential

purposes and may no owe a duty of care to

dwellinghouses within mixed use developments

depending on the proportion of the residential

component of the dwellinghouse)

• PTA not required to contribute if did not inspect,

issue ccc, or did so as required by DHB, private

certifier issued or relied on s 56 cert, didn't inspect

weathertightness related work.

TIMING

• Application must be made no later than 5 years

after 23 July 2011

• If existing claimant but have not yet applied for

adjudication must advise the Department in

writing that they wish to be assessed to

determine whether they meet the criteria by 28

October 2011

WHO CAN’T BE SUED

• Crown, Department (who administers the Act), Treasury,

a Minister of the Crown, Chief Executive, employees etc

of the Crown

• For damages due directly or indirectly to the repair

of a dwellinghouse in accordance with a

contribution agreement or provision of financial

assistance (125F)

WHO CAN’T BE SUED

The claimant or any other person can’t sue

• Contributing Party (once the first payment is received) or

additional contributing party (once payment/services/

goods received)

• For any civil proceeding relating to the

circumstances giving rise to the need to repair the

dwellinghouse if is or was subject to a contribution

agreement (125G)

HOW

• Application is made to the Chief Executive (s 125G)

• Other than that no legislative guidance but step by step guide issued by DHB:

• Lodge a claim

• Council notified

• Council will notify Department of potential ability to apply for contributions from it (if in legal proceedings claimant and Council must agree to withdraw from those proceedings)

HOW

• Eligibility Report

• Full Assessor's Report

• Concise Report (if full reclad provides scope and estimate but less detailed and cannot be relied on for litigation – no cost)

• Can apply for pre-approval for finance to meet share of costs

• If can't fund share of the repair costs then can pursue claim through the disputes process at WHT but can't access the FAP.

HOW

• Homeowner Agreement - once evidence that can afford repairs – may be offered a Homeowner Agreement

• Repair Plan – needs to be commissioned from a qualified designer

• Department approves

• Building Consent

• Quotes and payment plan

HOW

• Department approves quotes and payment plan

• Notice to proceed

• Payments start and repairs begin

• At end of FAP process can pursue other parties