The Natural Hazards Commission (NHC) says a “significant number” of remaining applicants in the Government’s on-sold programme for Canterbury homeowners with earthquake-affected properties will receive settlement offers over the coming months.
The news comes three months after incoming Deputy Prime Minister David Seymour announced a rollback to the costs of the on-sold programme in order to prevent a “cost blowout”.
Seymour, who is the Minister in charge of the NHC (previously known as EQC), announced changes to the Government’s on-sold support package in November 2024.
The on-sold programme was set up by the Labour-led Government in 2019. It was meant to be a time-limited offer of support for owners of eligible on-sold over-cap properties in Canterbury.
Applications for the scheme closed back in October 2020, with people having had 12 months to apply for an ex-gratia payment towards the cost of having their homes repaired for remaining earthquake damage.
The ex-gratia payments from the on-sold programme cover both failed repairs and missed damage, and the repair process is managed by homeowners.
In November last year, Seymour said the initial cost estimates for the programme in 2019 had been $250 million, but by June 2024 the estimated cost of the completed programme had risen to $717.9 million.
According to Seymour, the on-sold programme had supported over 800 Canterbury homeowners in completing repairs and moving back into their homes.
But as of November 2024, there were still 250 applicants in the programme who had not yet signed a settlement deed.
“The programme was never intended to continue indefinitely though, so the Government is making changes to simplify it, encourage timely settlement for these remaining homeowners, and avoid delays that add to programme costs,” Seymour said at the time.
Seymour asked the NHC to make the following changes to the on-sold programme immediately at the time of his November announcement:
- No application can be settled in excess of 1.5 times the current rateable capital value (CV) of the property.
- Applicants need to meet new deadlines to remain in the programme. For example, they have 30 business days to sign their Settlement Deed (from the date of offer) and six months to begin construction from the date of agreement. Applicants will also need to supply the information needed to progress applications within strict timeframes.
- Pre-construction project-management costs under the programme are limited to 4% of the ex-gratia payment.
From the 23rd December, a further limit was also applied to settlements where the homeowner had chosen to purchase a new home.
'Significant number'
NHC Chief Executive Tina Mitchell told interest.co.nz the on-sold programme’s 250 applicant figure had been reduced to 127 applicants as of the 24th February.
“We have seen good progress with information flows. We expect a significant number of these remaining applicants to receive a settlement offer over the next few months,” she said.
Mitchell said the NHC had experienced “strong engagement” from applicants since Seymour announced the changes to the programme.
“There have been a very small number of on-sold applicants removed from the programme. Some of these had to make a choice on whether to progress with their on-sold programme application or pursue an alternative legal process instead. We are unable to provide any further information for privacy reasons,” she said.
Asked how the cost-control measures – like the 1.5 times rateable CV cap – had impacted settlement amounts for applicants, Mitchell said previously when repair costs reached the CV cap, the NHC was required to formulate an alternative proposal, consult with the Treasury and obtain Crown approval.
The NHC also had to seek Crown agreement when it came to progressing a number of applications with repair costs above that CV cap.
“By formalising the settlement cap and removing the step to liaise with Treasury on this matter, the changes have provided clarity for homeowners and allowed us to progress settlements,” Mitchell said.
“Around 1,400 homeowners met the Government’s criteria for the programme. Nearly 940 of all eligible applicants have completed their repairs and are back in their home. Another 300 applicants are in the construction phase, completing the repairs or works on their homes.”
Mitchell said the on-sold programme had paid “about $428 million” to homeowners in the programme so far.
Asked if there had been any disputes or appeals from homeowners regarding the new changes, Mitchell said a “small” number of homeowners have raised concerns about the changes with the NHC.
“We have been working with them on a case-by-case basis to address those concerns and support them through the process,” she said.
2 Comments
I wonder how many of these outstanding claims are trying to milk the system for every last cent they can get. Would likely require a whole lot of engineers in both time and expense to ascertain what is genuine and what is dubious. It appears these changes will focus peoples minds in getting some compensation instead of dragging it out. Probably aided by the legal fraternity.
The whole episode has been a jungle of injustices, double dealing and malpractice. Both sides of the argument have been blatantly at fault. Most of what eventuated could have been avoided if EQC had simply been allowed to meet its obligations, pay out the cap where relative and let the insurer and insured take it from there. Instead Treasury intervened and the resultant EQC/Fletchers repair program set the base for the distortions and ructions that flared up. Worst of all the dud repairs by Fletchers that were exposed removed the liability from the insurer(s) and placed it financially instead on the taxpayer. Key, English and Brownlie executed here, a massive own goal. Have very little time for the sixth Labour government but here they were certainly delivered a foul set of circumstances by the previous government.
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