Source: New Zealand Government
Associate Finance Minister David Seymour has asked the Natural Hazards Commission (NHC) to make changes to how it delivers the On-sold support package to prevent a cost blowout while helping eligible homeowners repair their homes in a timely manner.
The On-sold programme was set up by the Government in 2019 as a time-limited offer of support for owners of eligible on-sold over-cap properties in Canterbury. Applicants had 12 months to apply for an ex-gratia payment towards the cost of having their homes repaired for remaining earthquake damage. Applications for the programme closed on 14 October 2020.
“The On-sold programme has supported over 800 Canterbury homeowners to complete repairs and move back into their homes, and hundreds more are in the process of doing so,” says Mr Seymour.
““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.
“Initial cost estimates for the programme in 2019 had it at $250 million. By June 2024 the estimated cost of the completed programme is at $717.9 million. Instead of allowing a rolling maul of cost increases, we’re putting a full stop on the programme in a way that allows applicants fair settlement.
The following changes come into effect immediately:
- 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.
“The Government wants to see earthquake damage to residential properties repaired as soon as possible so Cantabrians don’t continue to live in earthquake-damaged homes,” says Mr Seymour.
“Other changes reinforce the need to manage costs in the programme. From 23 December, a further limit will be applied to settlements where the homeowner has chosen to purchase a new home.”
The amount of the repair grant that can be repurposed will be limited to the market value of the building(s) at the on-sold property – assuming the damage eligible for remediation through this programme did not exist – plus the costs of demolishing the damaged on-sold property. The other existing parameters for, and limits to, these alternative settlement payments will continue to apply; and NHC will continue to verify the appropriateness of proposed costs on behalf of the Crown.
“The NHC is communicating the changes to homeowners in the programme today and will be in contact with each homeowner over the next two days with information about what this means for their specific situation,” says Mr Seymour.
“There are around 250 applicants in the programme who have not yet signed a Settlement Deed. I hope these changes will lead to positive outcomes and certainty for these applicants.
“I’m happy that we’re delivering an outcome that benefits everyone – with remaining applications on track without creating more costs for taxpayers.”
Note to editors: Further information is available at https://www.naturalhazards.govt.nz/insurance-and-claims/canterbury-earthquake/on-sold-over-cap-properties/about-the-on-sold-support-package/
