On 15 August 2019 the Government announced a policy that allows owners of on-sold over-cap properties in Canterbury to apply for an ex gratia Government payment to have their homes repaired.
If you’ve bought a home in Canterbury and discovered that it is damaged over the EQC cap, you may be eligible for an ex gratia payment to cover the cost of repair.
Under the policy, you will have twelve months (no later than 14 August 2020) to register your interest for the ex gratia payment. After that time, the policy will not be available.
If you qualify you may be able to receive an ex gratia payment equal to the agreed cost of repair.
To qualify for the support package, you’ll need to meet the following criteria:
- You have purchased a property in Canterbury after 4 September 2010 (the date of the first 7.1 magnitude Canterbury earthquake) and on or before the announcement of this support package on 15 August 2019; and
- Before selling the property the previous owner settled a claim with EQC on an under-cap basis; and EQC cover depends on how the natural disaster damage occurred.
- Post-sale you have discovered the property has incomplete or insufficient repairs either as a result of defective repair or through damage which had not been properly assessed; and
- The cost of the repair, together with the amounts previously paid by EQC for the property is more than the EQC cap ($100,000 +GST); an
- You are unable to access private insurance to cover the cost of repairs.
This is will be a welcome resolution to many homeowners but is subject to agreement with EQC as to the extent and cost of necessary repairs.
What is payable under the policy
Where the eligibility criteria are met, payment will be based on a scope of works that takes into account:
- the work required to repair the natural disaster damage in accordance with the EQC Act, and
- any other reasonable cost of that repair work.
We may have settled the original homeowner’s claim by a managed repair (where we undertook the entire repair process), cash payment (where the homeowner receives a cash payment and manages the repair themselves), or a combination of the two.
If a previous homeowner received a cash payment for some or all of the repairs, and those repairs need addressing, you will need to find out who did the work, and what warranties are in place. You can read about warranties on the Ministry of Business, Innovation and Employment’s building website
If you find that the repairs have not been carried out, you may need to find out more from the person you bought the home from, and the real estate agent you used to buy the property.
It’s important that any payment you receive is used for repairing or replacing damaged property. Any future insurance claims or cover may be affected if the payment is not used for this purpose.