Ratepayers taking hit over leaky resort fix
QUEENSTOWNLAKES ratepayers will each be paying more than $300 annually for the next 30 years for what is projected to be one of the largest single leakybuilding claims in New Zealand.
The council is facing a $162.9 million bill for costs associated with the Oaks Queenstown Shores Resort in Frankton Rd.
In its submission to the Ministry of Business, Innovation and Employment (MBIE) review of the building consent system, the council said the rates impact of Wensley Developments Ltd’s Oaks Shores claim would be another $9.56 million of debt servicing over the next 30 years.
That would increase rates by an average of 9.6%, costing $305 per property, every year, for three decades.
The council’s submission urged the MBIE to include risk, liability and insurance in its review of the system, and ‘‘strongly’’ denied the joint and several liability in play at present was the ‘‘most equitable’’.
‘‘Council’s experience and position substantially differ from the policy position paper,’’ the submission said.
‘‘Currently, ratepayers bear a disproportionate liability burden, with Building Act consent authorities (BCA) often being the only party left to compensate homeowners when building defects arise . . .’’
The council was seeking for the liability framework to change to one of ‘‘proportionate liability’’, as that would reflect the roles and responsibilities of those involved, and encourage building practitioners to actively manage the risk.
‘‘This should be accompanied by a system of compulsory home warranty guarantee . . . and/or insurance products.
‘‘The homeowner interest would then be protected and there would no longer [be] an impediment to moving to proportional liability.’’
If, however, the joint and several liability approach was to remain, the BCA liability should be capped at 20%, the council said.
The submission said the increased risk liability at present did cause the BCA function to be ‘‘more cautious and more demanding’’.
The council said it had experienced an increase in the number and quantum of claims against it by property owners relating to weathertightness and other building defects, and a ‘‘material increase in the operational expenditure by council to defend and resolve such claims’’.
The ‘‘aggregate of all expenditure’’ in the 202122 year to defend and/or resolve those claims, including costs, was about $40 million, largely funded by an increase in council debt.
That had resulted in an annual rates increase of about 1.6% for the 202223 year ‘‘and beyond’’.
The submission said the effect of the Oaks Shores case also included a loss in borrowing capacity, which would ‘‘inevitably’’ lead to a reduction in investment in its community assets.