The banking industry has developed a new process to help homeowners in multi-unit complexes with weathertightness issues to access loans needed to pay for repairs.
The NZ Bankers' Association said the industry had found that standard lending practices for building projects were difficult to apply in cases where multi-unit complexes with several owners needed repairs, and it had developed a escrow-based solution which would give unit owners and body corporates who require funding, the assurance they need to enter into building repair contracts.
This would involve using a third party escrow account to fund the repairs.
The escrow fund could be made up of banks loans and the owners' own deposits.
The account would be established under an escrow deed that would be entered into by the body corporate and the escrow agent.
Under the deed, the escrow agent would only release funds following payment instructions from the body corporate and the payment instructions would need to be supported by appropriate professional building certification.
The Bankers' Association said some bank customers had concerns about funding repairs through a complex's body corporate account and the use of an independent escrow agent would provide comfort to all parties.
The scheme would be available to both funded owners undertaking repairs and self-funding owners.
It was developed by the Bankers' Association along with ANZ, ASB, BNZ, HSBC, Kiwibank and Westpac and would be available to customers of all retail banks.
"This is a significant breakthrough for affected unit owners," NZ Bankers' Association chief executive Kirk Hope said.
"We appreciate the difficulties leaky unit owners have been through both financially and emotionally.
"We're pleased to have worked out a solution for them that applies across the banking industry."
Further information about the scheme is available the Bankers' Association website or by clicking on this link.
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