Further delays to the NZ Government’s leaky homes package have been criticised by the Home Owners Association of New Zealand.

The association says it was told the compensation package would be available by May next year, but Building and Housing Minister Maurice Williamson has confirmed to insuranceNEWS.com.au that delivery date cannot now be guaranteed.

“We are still working through a very complicated issue and are not yet able to give specific answers, but we are fully expectant the package will be available in 2011,” he said.

Home Owners Association President John Gray told insuranceNEWS.com.au the latest delay is “extremely disappointing” but he isn’t surprised.

“The whole system has been designed behind closed doors by councils and the Government and they have not engaged with the people,” he said.

Mr Gray says the compensation package has “fundamental flaws”.

The NZ Government estimates there are more than 80,000 people in leaky homes, built under relaxed regulations between 1992 and 2005. The compensation package relies on the Government and councils tipping in 25% of repair costs. Homeowners fund the remaining 50% backed by a government loan guarantee.

“Fundamentally the owner has to be able to service a loan and for many, that’s an impossibility,” Mr Gray said.

He said there were further implications for the insurance sector, as when owners commit to the package they “will then relinquish their rights to sue the Government and the council”, but if they take legal action against the builders, roofers or designers those parties will be in the firing line.

“Many of these respondents will be insured, so it will place further burden on the underwriters and will potentially put pressure on the availability of appropriate and affordable levels of professional indemnity and public liability cover for building practitioners further down the track,” Mr Gray told insuranceNEWS.com.au.