Whilst the home owners have announced that the outcome is a
landslide victory, the EQC maintains that the outcome simply
reiterates principles that they already apply. We think that some
of our clients will raise their eyebrows at this!
A joint statement has been released as part of the settlement
which sets out principles that EQC is obliged to follow in dealing
with claims for cover for earthquake damage. In summary the joint
EQC is obliged to fix earthquake damage to an 'as new'
state, and in accordance with current rules and legislation. The
terms 'like for like' or 'pre-earthquake state' are
acknowledged as not being the appropriate standard.
EQC cannot decline to cover releveling of an earthquake damaged
floor simply because the MBIE Guidelines might suggest that the
floor is within an acceptable tolerance level.
If undamaged areas of the house (such as wiring) are affected
or compromised in the course of the earthquake damage repair works
then EQC must also cover the additional cost of work on those
Cash settlements are to be calculated by virtue of the same
test as is mentioned above (not 'like for like' or
The statement does provide direction and authority which will
assist and reassure home owners about their EQC cover entitlements.
Although EQC does not admit wrongdoing, EQC may need to revise its
public information guides such as the "Customer Guide to the
Canterbury Home Repair Programme", which refers to EQC
repairing a home to its 'pre-earthquake state'.
We anticipate that this joint statement will prompt many
Christchurch homeowners to reassess and reconsider their own
settlements or EQC repairs. Whilst each case will turn on its
particular facts, if EQC has applied an incorrect standard to cash
settle repairs or undertake repair works, the homeowner may have an
entitlement to additional value or relief.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Parties have agreed on the resolution themselves, so it is often more practical for their own particular circumstances.
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