Ongoing Earthquake Problems

Land Claims and Other Tricky Issues…

Duncan Webb

Lane Neave

Land Damage

• Land

• the land on underneath the building; and

• all land within 8 metres of the building; and

• the land holding—

• within 60 metres, in a horizontal line, of the building; and

• Which is the main access way; and

• all bridges and culverts situated within the land; and

• all retaining walls and their support systems within 60 metres, in a

horizontal line, of the building which are necessary for the support

or protection of the building or of the land.

• Must form part of the “land holding” (not just legal title).

Damage

• Adverse change affecting usability.

• EQC categories:

• Flat land: Land cracking (spread and shaking);

undulation; ponding; settlement based drainage

issues; groundwater springs; ejecta; increased

vulnerability (flooding and liquifaction);

• Hill: mass land movement; rock fall / cliff collapse;

localised movement (small slips / retaining wall

failure).

• Must be change to the land in question (Kraal).

The Amount of Land Insurance

• For land the lesser of:

• (a) the value, at the site of the damage, of an area of

land being:

• the minimum area allowable to be used under the District

Plan for residential land; or

• 4 000 square metres; or

• The land that is actually lost or damaged—

• For retaining walls , bridges & culverts - indemnity value.

Land Damage: Fix or Pay?

• Sometimes that will be the cost of repair

• Will never be more than the value of the insured land at the time of the loss

• May be the “diminution of value”

• Diminution of value where repair unlikely due to:• Homeowner intention;

• New owner;

• Not feasible;

• Not permissible.

• Value of land lost where total loss.

• Indemnity value where no actual repair.

• May be by reference to cost of ancillary works to house (lifting / foundation enhancement).

Strategy

• Be pro-active• Provide your own information (or other information

e.g. CCC)

• Get all of EQC’s information

• Do not be overwhelmed by technicalinformation

• Your own experts may be useful (but expensive)

• Be clear on your own positon (repair / retreat / ignore).

• Be alert to any payments based on valuations.

Repair Techniques and “As New”

• The Policy:• As new,

• modern materials and methods,

• compliant with current building standards.

• The right questions:• Is the repaired element

• Able to serve the same function as effectively as a new element?

• Have the same quality of appearance as new?

• Is as strong as a new element;

• Is as durable as a new element;

• Compliant with modern building standards (Code);

• What is the proper extent of the repair (what is “the element”)

• What is a proper method and material in light of the policy.

• The wrong question:• Is it the same as when it was new.

The Cross Lease Nightmare

• Cross lease• Jointly own the land

• Mutual leases of areas of land and buildings for exclusive use.

• Legal issues• Lease terms

• Keep insured

• Keep in good repair

• Use insurance money for reinstatement

• Party walls require cooperation

• Practical Issues• Single buildings are best repaired by single projects

• Replacement of one unit only often not feasible

• As-is sales devalue complex

• Common areas require common repair

Retaining Walls

• EQC cover for indemnity value only

• EQC takes a depreciated replacement value

approach (not market value / residual value)

• Insure walls on land holding within 60 metres of the

building which are necessary for the support or

protection the insured land.

• Some insurance policies cover retaining walls:

• Often limited (e.g. $10,000 in total)

• Some times unlimited

Taking cash

• Be clear on your intention and make sure the terms of settlement are consistent with it

• Minimise your risks• Foundation costs

• Escalation

• EQC land payments

• Full and final cash settlement unlikely to be useful for a genuine reinstatement / replication

• “Reinstatement” may include out of policy options

Next steps

• Building or Repairing –

• Be aware of the challenges and risks

• Design,

• Cost,

• Compliance,

• Defects

• Delay

• As is –

• Hazard notices

• EQC cover at risk

• Ongoing insurance options limited

Summary

The Flockton Cluster Group welcomes

anyone with land and flooding issues post

earthquake.

Meeting on the 25 March at Papanui High

School staffroom at 6.30pm.

Duncan Webb will be speaking about the

implications of the Declaratory Judgement.

You are welcome to join us at the meeting, and

join our mailing list.