By: Emily Walton
If you bought an EQC repaired house after the Canterbury Earthquakes and before 15 August 2019 and you have concerns about the quality of the repairs, the clock is ticking.  You only have until 14 August 2020 to register your interest in an EQC ex gratia payment for repair costs.

So, if you have niggling concerns about whether all of the EQ damage has been repaired and/or the quality of the repair work , you have less than three months to register your interest to protect your position:  https://www.eqc.govt.nz/canterbury/on-sold-over-cap-properties.   Ideally, you’ll want to include a Licensed Building Practitioner or structural engineer’s report on the inadequate or failed repairs.  EQC usually reimburses these costs.

Before July/August last year, new owners of homes badly repaired by EQC were between a rock and a hard place; EQC wouldn’t pay repair costs over the “cap” of $115,000 incl GST per event and insurers wouldn’t pay full repair or replacement costs on earthquake claims assigned to new owners. 

The EQC On-Sold Support Package was announced on 15 August 2019.  It was in part, a political response to the Supreme Court confirming that in most cases, insurers do not need to pay full replacement benefits (i.e. the full cost of repair) on assigned insurance claims. 

The EQC On-Sold Support Package may provide relief, if you meet the current criteria including:
  1. You must be the current owner of the property and have made your offer to purchase after the EQ damage was sustained and before 15 August 2019;
  2. If your offer was conditional on a building inspection report, you must have satisfied or waived that condition before 15 August 2019;
  3. The original owners must have lodged at least one claim with EQC and that claim must have been assigned to you.  If there was no assignment when the property was purchased, this can be done retrospectively with the vendor’s co-operation;
  4. Prior to purchase the property must have already been assessed by EQC and determined to be under-cap; and 
  5. You have no access to the vendor’s insurance claim.  In practice, there may be some flexibility around this, but EQC will definitely want to know the position with the “over-cap” insurance claim.
See:  https://www.eqc.govt.nz/sites/public_files/documents/factsheet/Factsheet-Government-On-Sold-Support-Package.pdf

If your application is accepted, EQC will usually not cash settle the repair cost unless it is under $15,000.  Otherwise instalment payments are made during the repairs.  If the cost of repairs is over 150,000, a caveat or encumbrance will be registered against the title of your property until the repairs are completed.

Finally, if you haven’t sold your home, but still have concerns about the repairs by EQC’s contractor or even if you cash settled with EQC, you can still request a review of your EQC claim.  You will usually have six years from the date of practical completion of the repair work or payment of the cash settlement to file in Court (if you end out disputing EQC’s position on your repairs).

Otherwise, if you have bought a home defectively repaired by EQC, we urge you to contact EQC now, before time runs out.
 
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