Category Archives: EQC

Community Q & A from EQC

The following questions were posed to EQC via the Customer Advocacy Group. Star community leader, Carmel Jagger is all over the big questions in the community so expect her to keep asking the hard questions. Responses are from EQC.

How does EQC intend to settle land claims for cross leave titles when all owners within the cross-lease own the land in equal shares but damage to insured areas is not equal?

The standard approach for land damage relating to individually insured cross-lease flats is to pay each flat owner for any covered damage to their exclusive land area and to split any covered damage to shared land areas between the flat owners based on their ownership obligations.


Will EQC require repair of ILV land prior to CHRP undertaking repairs to the building?

In order to expedite the repair of Canterbury homes, EQC has decided to continue to undertake CHRP repairs to buildings in advance of determinations of whether associated residential land has suffered ILV damage. EQC is in the process of developing its policy for the settlement of ILV damage claims and expects to finalise this in the first quarter of 2015.

If EQR intend to carry out repairs to building prior to any land repair who is responsible for any subsequent damage to the building?

EQC is considering this issue as part of its development of a policy for the settlement of ILV damage claims. EQC is in the process of developing its ILV policy and expects to finalise this in the first quarter of 2015.

How is DOV relevant as part of the assessment process for ILV if repair of land is consentable and feasible?

DOV is not specifically used to assess and confirm ILV damage. However, as well as geotechnical investigations, an assessment is undertaken to confirm that the property has suffered a loss of utility or value as a result of the property being more vulnerable to liquefaction damage in a future event.

EQC has not yet finalised its approach to settling ILV claims, however its preference is to settle claims based on the costs of repair where this is feasible and consentable. Where a repair is available then DOV is a settlement method that may be utilised.

If a DOA is given to an insurer does EQC still make settlement to the homeowner?

No. In general, where EQC is on notice that a customer has assigned the benefit of a claim to the insurer, EQC is obliged to pay the insurer in accordance with the DOA. However, this depends on what exactly has been assigned.

Because every Deed of Assignment is different, it is important to look at the individual terms when determining who to pay. For example, in some cases a customer will assign the benefit of the building claim only to the insurer, or sometimes building and land. If only the building claim is assigned, then any land payment will go to the customer (not the insurer). In other cases, the customer might only assign one of their claims and not all claims for the property.

We note that if there is a mortgage against the property EQC will generally be obliged to direct payment to the mortgagee (the bank) unless the mortgagee has approved the assignment to the insurer.

It will also be important for customers to check the terms of their agreements with the insurer to see what they have agreed to the insurer using the money for.

We know of homeowners who have not accepted the Crown’s Residential Red Zone offer and remained on the property who have not received notification of ILV or IFV potential – can this be explained? If they are neither ILV or IFV when can they expect their land claim to be settled?

The red zone data as to who has accepted a pay-out from CERA and who has not is still being worked on. We have deliberately excluded these properties until the data is clear enough to use.

Covered – Episode 3

The third episode in the 12 part Covered series screened this week on Cue TV Tuesday, 8:30pm and  on CTV Wednesday, 8:30pm. You can also catch up on all videos at Rebuild Christchurch.

There has been mixed response to the series, some finding it helpful and others questioning whether it is too little too late. Perhaps it is and perhaps we have heard it all before. However, like In the Know, this series is trying to bring transparency to the many confusing processes a homeowner has to deal with as they settle their earthquake claim.

There is something of a sense of frustration though listening to recovery agency leaders explain things as if they are really so straightforward and consistent. I think we all know what is said at a management level and what is done operationally can be very different. But again like In the Know, use the information you are told to hold the agencies to account.

You will note that our very own Marcus Irvine is now putting the important questions to the engineer about repair methodologies. These questions come from what we hear from you – through In the Know, media platforms, emails and conversations in the community. However, if there is something very specific you think should be addressed in this series, the public have an opportunity to ask questions at Rebuild Christchurch which can be answered on air by EQC and other parties participating in sharing information.

IAG Executive General Manager for Canterbury Recovery Dean MacGregor talks about the IAG claims settlement process, why it can take over 60 weeks for a rebuild or major repair, how insurers work with EQC and dealing with complicated shared property and multi-unit building claims.

Reid Stiven, General Manager of the EQC Canterbury Home Repair Programme, talks about the Earthquake Commission Act and then structural engineer Tim Day looks at how to assess for earthquake damage and pre-existing damage.

CanCERN’s Marcus Irvine talks to geotechnical engineer Jordan Walker about house lifting to repair or replace foundations, what’s involved, when is ground improvement work needed and whether a house can withstand the rigours of being lifted.

Declaratory Judgement – Day Four

Friday. Day four.

Is IFV building damage?

Tom Weston QC (amicus), and Duncan Webb (Flockton Cluster Group) spent much of their time arguing this point today. Funnily enough, I covered the issue yesterday when Southern Response argued that IFV is not necessarily building damage.

>> Click here for Thursday’s post and to find out why this point matters <<

Because I’ve already touched on the issue, there’s not a whole lot to add other than a few technical points Mr Webb made about why he says IFV is building damage.

  • In response to Southern Response’s point on Thursday that no structural change to the building legally means there’s been no damage, Mr Webb argued that MBIE guidelines say if there is a change in the building’s plane, this affects its utility. A change in utility is technically a change in structure, which should then by association be classed as damage. (See what I mean by it being legally complex?!)
  • On the point of having to prove there’s been ‘physical change’ to the building in order to be classed as damage (see yesterday’s post for background), Mr Webb asked the court to consider that if the building has moved downwards and that’s not classed as ‘physical change’, then what kind of change is it?
  • Mr Webb also made the point that if EQC is happy to class the movement of land downward as damage, then the same must be able to be said of the building. This is because land and building are inseparably linked.

Calculating Diminution of Value (DOV)

As it stands in EQC’s current IFV policy, it is choosing to calculate how much an IFV property should be compensated by figuring out its loss of value, i.e. the difference between what a reasonable buyer would have paid pre earthquake versus post earthquake.

Duncan Webb argued that loss of value isn’t the correct method because it’s not mentioned at all in the Act. He says the indemnity value of an IFV property should be worked out by how much it would cost to reinstate the land to its pre earthquake state (reinstatement is mentioned in the Act). These two methods could produce vastly different sums.

By the sounds of it, however, the judges are one the fence about which method should be used. I’ll explain why using an example:

A property is confirmed as IFV – but only just; it’s likely to flood badly once every one hundred years. That property’s value may have only dropped by $20,000, however, the cost to reinstate the land might be $200,000. In this case, it’s the difference between a $20,000 payout for loss of value and $200,000 one for the cost of reinstatement.

Would the latter payment be over compensation? Or is that just what the property owner is entitled to under the Act? I suspect you could answer ‘yes’ to both questions depending on which way you looked at it.

Declaratory Judgement – Day Three

Thursday. Day three.

Climate change

The Insurance Council began its submissions and held the floor for most of the day. The point it probably laboured on the longest was the fact that climate change should be considered when working out IFV. The Insurance Council’s lawyer, David Goddard QC, said that EQC’s IFV policy only allows for water levels and rainfall to continue as they are currently. He disagrees, saying that by excluding climate change a lot of houses will miss out on being eligible for IFV. This is because if climate change is taken into account, water levels and rainfall will be higher, meaning more properties will be more prone to future flooding. Considering climate change would essentially lower the threshold for IFV eligibility.

IFV – building damage too?

The argument that IFV is technically building damage as well as land damage has been debated by several parties throughout the week. It was a point originally argued by the city council which later withdrew it. The argument was then picked up by Tom Weston QC, who’s acting as an amicus (friend of the court), as well as by the Flockton Cluster Group. Southern Response oppose the argument.

So, what’s it all about? It comes back to how you define damage and what the threshold for damage is. In this case the threshold for damage is ‘physical change’ coupled with ‘loss of amenity’. Loss of amenity is easier to prove because if the house is now closer to the flood plane, it’s more likely to flood, and is therefore less useful (it has less amenity).

‘Physical change’ on the other hand is more tricky too define… Southern Response argued that if a house goes down into the land that is building damage, but if it goes down with the land, it’s not building damage because the building is in the same place relative to the land, i.e. there’s been no physical change. However, Mr Weston and the Flockton Cluster Group say there is physical change because the building has still technically moved. It may not have moved in relation to the land, but it has still moved in ‘space’.

As you can see, this is a tricky argument and it really comes back to how the court chooses to define ‘physical change’. Is it purely in relation to the land, or can it be in relation to any other point in space?

So what are the consequences? As I understand it, the argument comes back to liability. If it was proven that IFV is in fact building damage too, EQC or private insurers may be liable to remediate buildings (e.g. lift them) instead of simply paying out for loss of value to the property. This could be an astronomically costly exercise if you think of the thousands of homes that may need to be remediated.

Previous posts

Want a Fletcher EQR summer repair?

The following statement is from EQC. You can see the original here.

Earthquake repair teams in Canterbury will be working right up to Christmas and starting again early in the New Year to progress the remaining claims referred to the Canterbury Home Repair Programme. The programme will close for the Christmas break on December 24 but reopen on January 5.

Fletcher EQR says it has teams planning upcoming repair work now and wants to encourage homeowners to book in for a summer repair from December through to March. EQR can be contacted on (03) 341 9900.

If customers  have questions or concerns about their scope of works or having to move out for repairs, there is a range of options hub staff can talk through with them.

You can read about the benefits of a managed repair here.

Hubs, hubs and more hubs

Plenty of work is happening between recovery agencies to get clear information out to residents about land, flood and future plans. The next 4-6 weeks will provide many opportunities for residents to talk to the right people about what’s known, what’s not known and what is happening in these areas.

Council-run drop-in sessions

These will run for two weeks starting next Tuesday, September 16th, and will have information for residents on a range of issues including pre-consultation on the Long Term Plan, the District Plan Review, current information around flooding and building consents.

Council staff who worked with the Flood Taskforce will be present for many of the sessions, as well as staff from the communications and Strengthening Communities teams. Elected members have also been invited.

You will also be able to talk to planners about your property, so make sure you set aside a bit of time.

The drop-in sessions are as follows:

  • Tuesday: Sept 16 and 23     1pm – 6pm
  • Wednesday: Sept 17 and 24     1pm – 6pm
  • Thursday: Sept 18 and 25     4pm – 8pm

Where? Beulah Church, 140 Springfield Road, Edgeware.

In the Know Land Hub

This will be open for two weeks from Monday, October 6th – Thursday, October 16th.

The Hub will be hosted by staff from Tonkin and Taylor, EQC (Community Contact Team), CCC (consents staff), and community representatives.

A seminar series will be held at the Beulah Church between 7th – 16th October.  These seminars are being put together based on what residents are reporting they really want to know more about. A schedule will be available soon.

Opening hours:

  • MondayFriday     9am-12pm
  • Monday – Wednesday     4pm-7pm

Where? Beulah Church, 140 Springfield Road, Edgeware.

Investigations into a second venue are being undertaken.  If confirmed, this would be for another two week period from Monday, October 20th – Friday, October 31st at a retail space in Eastgate Mall, Linwood.

Declaratory judgement hearing now in Chch

We’ve heard through the grapevine that the declaratory judgement regarding IFV/ILV settlement will now be heard at the High Court in Christchurch rather than Wellington. However, this still has to be confirmed to us.

This is the right decision as it impacts Christchurch people first and foremost. It’s only fair that residents get the opportunity to hear and understand everything properly, rather than having to rely on the media. We’ll certainly be there making sure we have our head around it all.

Is it worth complaining to EQC?

This week has seen the notorious EQC contracted engineer, Graeme Robinson, front up to the Institution of Professional Engineers disciplinary committee to face complaints from 11 Canterbury homeowners claiming he was incompetent in his assessments and unprofessional in his manner.

Earthquake related social media has been abuzz with stories which echo those of the 11 homeowners, and many of the comments have been about how complaints to EQC about Mr Robinson fell on deaf ears.

In a Press article today, EQC’s general manager of the Canterbury Home Repair Programme, Reid Stiven, said he was disappointed some complaints heard on the second day of the disciplinary hearing had not been dealt with by the EQC complaints procedure or mediation.

CanCERN is not entirely sure the outcome would have been any different even if they had been ‘dealt with’.

We have had concerns for a long time about the EQC complaints process relating to its independence, transparency, and decision making. From what we can see, complaints go in one end and out the other and very little is known about what information was used to review the complaint, or who was actually part of the review process.

We support the independent mediation service provided to some as part of the complaints resolution process, but again, we have concerns about the way EQC decides who gets invited to use it. A cynical person might wonder whether the tough cases make it that far.

Because we have so many questions, we’ve sent off an Official Information Act request seeking clarity about the process. As EQC is also undertaking an internal review of the complaints process, we have suggested they may like to consider our questions as part of that review; that way potential improvements might come from a user’s perspective as well as an organisational one.

You can see our questions here and we will keep you informed of responses as they come back.

In the Know Land Hub postponed

An aerial view shows people removing mud after a soil liquefaction caused from last week's earthquake in ChristchurchAfter last week’s great announcement that the In the Know Land Hub was due to open on 9 September for a month, the decision has now been made to delay it for a month.

This decision was not made lightly, and there has been a fair amount of robust conversation about which decision serves the interests of the resident best, but in the end it was decided that the more residents know about their land damage status, the more they will benefit from the Land Hub.

The decision to delay was based on the fact that of the 18,000 properties of EQC customers that were being investigated for complex land damage – Increased Liquefaction Vulnerability (ILV) and Increased Flooding Vulnerability (IFV) – only the 9,000 customers with IFV potential have been notified. The balance of 9,000 properties are currently undergoing final investigations to be able to confirm them as having, or not having, ILV. These geotechnical investigations are expected to finish by the end of September.

This would have meant that by the time of the In the Know Land Hub’s planned opening date, up to 9,000 customers would not be aware of their ILV status and what it means for them. Therefore the decision has been made to postpone the opening of the Land Hub until the investigations have been completed and all 9,000 customers have received information about their specific ILV status.

CanCERN is in two minds about this decision. We agree that residents will be able to focus their visits to the In the Know Land Hub better if they know they are ILV or not. However, we also know there will still be a lot of outstanding answers which people will be seeking related to settlement that won’t be available, even by October.

Looking on the bright side, it gives the recovery agencies involved a little more time to refine their information and seminars to ensure they are well targeted towards the questions and concerns residents have. You can continue to share these thoughts with us here and we will work with the agencies to make information hit the mark.

The city council is now thinking about what it might do in the interim to be able to support those residents impacted by the Mayoral Flood Taskforce Report recently released. We will keep you in the loop.

EQR here until April 2015

It may seem a slightly interesting approach to celebrate the announcement that Fletcher EQR is going to stay on-board to complete repairs until the end of April 2015. However, this announcement will give those people who still awaiting repairs confidence that they will not be left stranded or facing an unwanted cash settlement.

EQC and Fletcher EQR working together on final CHRP repairs
22 Aug 2014

EQC and Fletcher EQR have agreed to continue working together to the end of April next year to complete repairs in the Canterbury Home Repair Programme.

EQC Chief Executive Ian Simpson said fewer than 3000 home repairs were likely to remain for completion in 2015.

“We have always acknowledged that our target of completing all repairs by the end of 2014 was going to be a stretch, so it is pleasing that the numbers outstanding will be relatively small in relation to the entire home repair programme,” Mr Simpson said.

“I would like to emphasise that we will complete repairs and that we will not be cash settling in order to achieve our goal.”

Mr Simpson said there was a variety of circumstances in which repairs had been delayed. “The majority that will stretch into 2015 relate to customers deferring because they have had particular issues or personal situations that needed to be resolved before embarking on a repair,” he said.

EQC and Fletcher EQR are working with these customers and other agencies to discuss their options and how to help progress their claim.

“The good news is that customers can have confidence in booking in their repairs as the majority of the 10,000 or so claims to go will be completed this year,” Mr Simpson said.