EQC have released three new items of information for those with land damage (see details toward the end of this post). Arising from what EQC intends doing and paying on land, there are major risks for many with significant land damage. Some of the risks are speculative at this stage, because there is insufficient information to remove doubt and give confidence.
EQC will not, in most cases, be carrying out or organising land repairs themselves. Instead, land owners will be cash settled (or in some cases whoever holds the mortgage gets the money), and it will be their responsibility to have the land “fixed”. Under no circumstances can a property owner expect to receive the real cost of making good land that has significant damage. As EQC say in their Guide to Canterbury Land Claims:
The value of a cash settlement therefore will not be the amount of money needed to reinstate the insured land, or retaining walls, bridges or culverts.
The costing of repairs is done by EQC. To do this “EQC has a range of potential land repair methods and selects the one most appropriate to repair the damage.” Given EQC’s track record of inaccurate assessments and costings, plus the little matter of underpaying some assessments, there can be no confidence that all settlements will be at the appropriate level.
Not everything in the process is transparent. The land settlement pack (see item 2.below) includes a diagram of the property with the damage marked out on it, plus a Land Assessment – Legend Sheet describing the nature and size of the damage areas. However the sample Land Settlement Calculation letter, which gives the value attributed to damage, contains no information of what the repair consists of, or the repair methodology used to calculate the settlement. So, you get your letter and have no way of knowing exactly what has to be done, or the methodology EQC used to price the work. This is the first risk – is it all there, is it a suitable methodology, and will the calculation be realistic?