How to resolve a dispute about a leaky home

Introduction

The WEATHERTIGHT HOMES RESOLUTION SERVICES ACT 2006 (the WHRS Act) provides a specialist dispute-resolution process for owners of leaky homes. The Act came into force on 1 April 2007.

The WHRS Act provides for owners of leaky homes to lodge a claim with the Weathertight Services unit at the Department of Building and Housing. Weathertight Services assesses claims and provides mediation services. If claims aren’t resolved through negotiation or mediation, the Weathertight Homes Tribunal can make a binding decision. You can use the process in the Act only if your home was built or altered within the previous 10 years.

The WHRS Act replaced the Weathertight Homes Resolution Services Act 2002, and is intended to provide faster, cheaper and more independent resolution of leaky homes claims than under the process set up by the 2002 Act. The 2006 Act sets up the new Weathertight Homes Tribunal, with new measures such as preliminary conferences aimed at getting the parties who are responsible for the damage to engage in the resolution process as quickly as possible. The Act also sets up a special streamlined process for resolving lower-value claims (under $20,000). The Act also allows claims for potential damage, as well as actual damage.

Weathertight Services has a website at www.weathertightness.govt.nz, which contains more information about the processes explained below. The Weathertight Homes Tribunal also has a website at www.justice.govt.nz/wht, which has information specifically about the Tribunal’s processes.

Who can use the weathertight homes dispute-resolution scheme?

To be able to use the scheme in the Weathertight Homes Resolution Services Act 2006 you must meet the following eligibility criteria:

• Your home must qualify as a "leaky building" as defined in the Act. This means a home into which water has penetrated as a result of any aspect of the design, construction or alteration of the building, or materials used in its construction or alteration.
• The leaks must have caused damage to your home.
• Your home must have been built or altered within the 10 years before you lodge your claim.

What if I own a unit in a multi-unit building?

There are special rules for claims for apartments, flats, townhouses or units within multi-unit complexes. These complexes can bring a single claim under the WHRS Act: for more details see below, "Claims for multi-unit complexes".

What costs can I claim for?

You can claim for –

• the water leaking into your home, and the damage or loss of value this has caused
• the loss of value caused by the fact that your home isn’t weathertight
• the cost of making your weathertight, including both

• work required to fix the defects that allowed the leaks, and
• work required to fix defects that are likely to allow leaks in the future.

Can I claim if I’m a tenant?

No. You can claim only if you own the property.

If you’re renting a leaky home, you should raise the problem with your landlord. If your landlord doesn’t fix the problem, you can take the dispute to Tenancy Services and the Tenancy Tribunal: see How to: The rights and obligations of residential landlords and tenants and How to apply to the Tenancy Tribunal.

Can I claim if I’m a landlord and not living on the property?

Yes, but only if your tenants are using the property mainly as a home rather than as business premises. If your tenants use the property for business purposes, you cannot claim.

Can I carry out repairs before I make a claim?

Yes, you can carry out repairs before you make a claim, or at any point during the claims process.

Does any claim I make have to be under the Weathertight Homes Resolution Services Act?

No. If you want to, you can use other options for resolving the dispute, such as –

• the court system
• the Disputes Tribunal, if your claim is for less than $7,500 (or less than $12,000 if both sides agree)
• private negotiation or mediation

If you’ve made a claim under the Weathertight Homes Resolution Services Act, you can pursue a claim through the courts or the Disputes Tribunal without closing your WHRSA claim. However, you can’t apply to the Weathertight Homes Tribunal while you have a case going through the courts or the Disputes Tribunal.

Will I need a lawyer to handle my claim?

You’re not required to have a lawyer, but you can have one if you wish.

If you want to hire a lawyer but can’t afford one, Legal Aid is available: see How to obtain civil Legal Aid.

What if I have an unresolved claim under the previous Act?

If at 1 April 2007 you had a claim going through the process set up under the 2002 Act, the effect of the new 2006 Act depends on what stage your claim was at and on what options you choose. Detailed information is available from the Weathertight Services website at www.weathertightness.govt.nz.

Claims received after 1 March 2007 are dealt with under the new Act.

Claims for multi-unit complexes

What if I own a unit in a multi-unit building?

There are special rules for claims for apartments, flats, townhouses or units within multi-unit complexes – that is, units held under unit title, cross-lease title, or company share licence. These complexes can bring a single claim under the Weathertight Homes Resolution Services Act, and accordingly can get a single assessment report and go through a single dispute-resolution process.

Four types of multi-unit claim

There are four different types of multi-unit claim:

• Multi-unit complex claim – Here the claim is for a group of units and any common areas. This is the most common type of multi-unit leaky home claim.
• Stand-alone complex claim – This is where no common areas are affected and the claim is brought for one or more units that are each separate buildings with no common areas, or for all units in one or more separate buildings with no common areas. The owners of all the units in each separate building must authorise the claim to be brought.
• Common-areas-only claim – Here the claim is brought for any common area that has been damaged, if no unit in the complex has been damaged.
• Single-unit claim – This type of claim is brought when no other unit has been damaged and no common areas have been damaged.

Who brings the claim for a multi-unit complex?

The owners in a multi-unit complex authorise a representative to bring the claim on their behalf, as follows –

• For a multi-unit complex claim or common-areas-only claim, the representative will be –
  • the body corporate, if it’s a unit title complex (the "body corporate" is all the unit owners acting as a group: see How to: Unit title ownership of apartments and other properties [260].)
  • the company, if it’s a company share complex
  • a nominated representative, if it’s a cross-lease complex.
• For a stand-alone complex claim, a nominated representative must bring the claim.
• For a single-unit claim, the owner of the unit brings the claim.

Making a claim and getting your claim assessed

How do I make a claim under the WHRS Act?

You should contact Weathertight Services at the Department of Building and Housing and get an application form:

• phone them on 0800 324 477 and ask them to send you out a form, or
• download an application form from their website at www.weathertightness.govt.nz

How does the assessment process work?

Once you’ve lodged a claim, Weathertight Services will make an initial assessment of whether your case meets, or could meet, the eligibility criteria (see "Who can use the weathertight homes dispute-resolution scheme?").

If your case passes this initial assessment, Weathertight Services will arrange for an expert assessor to visit your home and make a report.

You’ll need to choose which of two different kinds of assessments you should get. A Weathertight Services claims advisor can help you decide which is better for your claim.

• Eligibility assessor’s report – This is limited to deciding whether you meet the eligibility criteria. This is an appropriate option if you’re confident you have access to the necessary finance and expertise to carry out full repairs before you go into the resolution process. You should keep a careful record of evidence as you carry out the repairs. An eligibility assessor’s report is free.
• Full assessor’s report – As well as deciding whether you meet the eligibility criteria, this also identifies the cause of the leaks, the nature and extent of the damage, what work is needed to repair the damage and to make your home weathertight, how much the work will cost, and who the assessor thinks should be involved in resolving the dispute (this might be, for example, the builder, designer, inspector, subcontractor or product supplier, or several of these people). A full assessor’s report is the better option if you wants a comprehensive assessment before deciding whether to repair first or resolve your claim first. These reports cost $500 for a stand-alone property; the cost is greater for multi-unit complexes.

If you choose an eligibility assessment, this doesn’t stop you later asking for a full assessment before you go on to the resolution process (unless you’ve already repaired the property by then).

What happens after my home is assessed?

The assessor’s report then goes to Weathertight Services to confirm whether or not your claim meets the eligibility criteria.

If the assessor’s view was that your claim is ineligible, you have 20 working days to make submissions to Weathertight Services before it makes a final decision about your eligibility.

If Weathertight Services decides your claim is not eligible, you can appeal its decision to the chairperson of the Weathertight Homes Tribunal.

How claims are resolved

Two tracks, depending on the value of your claim

If after an assessment Weathertight Services confirms that you’re eligible, the particular resolution process will depend on the value of your claim:

• Lower-value claims (claims of $20,000 or less) go first to negotiation and mediation, and then, if the claims isn’t resolved, to the Weathertight Homes Tribunal for a decision "on the papers" (that is, without a hearing).
• Standard claims (claims of more than $20,000) go to the Weathertight Homes Tribunal for a hearing, but with an opportunity for mediation to resolve the dispute before any hearing is held.

These are explained in more detail below.

Lower-value claims

If your repair costs (actual or estimated) are $20,000 or less, you can apply for Weathertight Services to provide you with access to negotiation and mediation services to try to resolve your claim.

Negotiation is an informal discussion between all the parties aimed at resolving the dispute. Weathertight Services will arrange the meeting, but you the claimant will chair it.

If negotiation doesn’t resolve the dispute, Weathertight Services will arrange mediation. They will provide a professional mediator to run the mediation session. The mediator is neutral: his or her role is to help you and the other parties come to an agreement. The mediator does not make any decisions about the claim.

If mediation doesn’t resolve the dispute, you can apply to the Weathertight Homes Tribunal to make a decision on your claim. They will do this "on the papers", which means they’ll decide on the basis of all the relevant documents, without holding a hearing. The Tribunal is required under the WHRS Act to make the process much faster, simpler and cheaper than when it decides a standard claim (see below), minimising the amount of evidence and the involvement of lawyers, and using informal means as much as possible to resolve the dispute.

You can get more information about applying to the Weathertight Homes Tribunal from the Tribunal’s website at www.justice.govt.nz/wht.

The standard claims process

If your repair costs (actual or estimated) are more than $20,000, you can apply to the Weathertight Homes Tribunal to make a decision on the claim. There is a $400 fee for applying to the Tribunal.

The Tribunal is supported by Ministry of Justice staff, not by the Department of Building and Housing. Therefore, once you apply to the Tribunal, your claim will be handled by a Ministry of Justice case manager, rather than by a Weathertight Services claims advisor.

A single member of the Tribunal will deal with and decide your claim.

The process will have these stages:

• Preliminary conference – This will deal with issues like adding or removing someone as a party to your claim, and setting a timetable for holding a hearing and any mediation meeting. The conference will be held between three to five weeks after you’ve "served" your claim on all the other parties (that is, given them copies of the application and relevant documents). The conference may be held through a teleconference if it’s difficult to get all the parties together in one place.
• Mediation – The Tribunal may decide that your claim should go to mediation, but with a time limit. If so, a mediator will be arranged by Weathertight Services, and will be provided free of charge. If you reach agreement at mediation the claim process will end there, without a hearing. Mediation is private and the outcome is confidential. But if you reach agreement, the agreement can be recorded as a decision of the Tribunal if you and the other parties request this.
• Experts’ conference – If the parties’ expert advisors disagree about an aspect of the claim, the Tribunal may order a conference of experts to be held. None of the parties nor their lawyers will attend this conference. The conference will produce a joint statement from the experts of what they agree on and what they disagree on and why.
• Hearing – This is a formal, judicial hearing where the Tribunal member will clarify and test all the evidence that has been presented to it (the evidence will have been presented before the hearing). The hearing will be "inquisitorial" – that is, the Tribunal will follow an investigative, questioning approach, rather than an "adversarial" approach where the focus is on the different sides presenting and challenging each other’s evidence. The hearing is open to the public.
• The Tribunal’s decision – Within a month of the hearing, the Tribunal will deliver a written decision. This will state who is responsible for the leaks, who should pay the claimant, and how much. The decision is legally binding, and is enforceable in the same way as a court order.

It’s an offence to disobey an order or direction made by the Tribunal, or to fail to turn up if the Tribunal has summonsed you as a witness. The penalty is a fine of up to $2,000.

What can I do if I’m not happy with the Weathertight Homes Tribunal’s decision?

You can appeal the Tribunal’s decision to the courts on any issue of law or fact. You appeal to:

• the District Court if your claim is under $200,000
• the High Court if your claim is more than $200,000

You must file your appeal with the court within 20 working days after the Tribunal’s decision, or within any longer time that the court allows.

Enforcing the result of the resolution process

Enforcing an agreement reached at negotiation

If you’ve reached a written agreement through negotiation, you can enforce this in the District Court only if a Weathertight Services mediator signs a statutory declaration.

Enforcing a settlement reached at mediation

This binds all the parties who agreed to it and can be enforced in the District Court.

Enforcing a decision of the Weathertight Homes Tribunal

The Tribunal’s decision has the same effect as a District Court order, and can be enforced like any other court order.

Cautionary notes

• Claims dealt with under the Weathertight Homes Resolution Services Act will usually involve substantial amounts of money. You should seriously consider hiring a lawyer to represent you in mediation or in any decision-making process by the Weathertight Homes Tribunal. Certainly if you decide to appeal a Tribunal decision to the courts, you will need a lawyer.