Queenstown Lakes to face more leaky building claims after 13% rates rise

Nicole Mathewson Reporter from Otago News

From reporter Debbie Jamieson:

Queenstown ratepayers are facing more leaky homes claims but none as large as those behind a proposed average 13.6% rate rise this year.

The Queenstown Lakes District Council – which covers Queenstown and Wānaka and surrounding areas – settled last year with the body corporate of the Oaks Shore apartments, which claimed $163 million for leaky building repairs.

The exact settlement figure was confidential, but the council was taking out a loan to pay the claim.

It was covering other claims also, including one for the neighbouring property Oaks Club Resort, thought to be about $50m.

The impact of the interest costs meant the claims contributed to nearly a third of the massive rates increase for the coming financial year, documents show.

If the claim was paid in a single year the rates increase would be “horrendous” and in the “hundreds of percents”, council finance manager Stewart Burns said during a council meeting on Thursday.

Councillor Esther Whitehead asked what assurances the council could provide that ratepayers would not face another increase due to leaky home claims.
Burns said the council was currently facing three or four claims, but none were on the scale of the two Oaks properties.

Properties caught in the leaky home legislation were built between 15 and 20 years ago.

Claims had to be made within 10 years of a property’s completion.

The council was reaching the end of that period, he said.

Council standards for building inspections and consents have improved in the last 20 years.
The building inspection and consent processes at the time of the construction of the affected buildings was also a contributing factor, he said.

“The standard we have to meet these days compared to 20 years ago is quite different, and we are audited regularly on those services.

“We certainly have got a lot of confidence that the way we operate now is appropriate.”

Draft annual plan documents show how increases in interest rates, depreciation expenses and record-high inflation have also contributed to the region’s rates increase.

To lessen the rates rise, the council is planning to defer $106.7m in projects, including a Wānaka water treatment plant, a new reservoir at Quail Rise, and a Queenstown water treatment plant at Two Mile.

Increases in some user fees such as building consents, animal registration, and sport and recreational services are also proposed.

The council is undertaking public consultation on the draft annual plan.