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Thursday, February 14, 2013

EQC - yet more changes to the Opting Out rules

Earlier this week EQC made changes to their Opting out web page(see here). Further changes have been made, introducing more detail into the opting out process.

A major change is that, once you have sent EQC your Opt Out application, you must wait up to 15 working days before you will know if EQC will allow you to begin the process.  So, without EQC’s permission, you cannot get started with opting out.

Important issues arise from this. The first is, why is this step necessary? If EQC have no intentions of refusing Opt Out requests at this stage there would be not need to issue an authorisation to proceed. On what grounds might EQC withhold permission to proceed? What if the process takes more than 15 working days? This contingency is not covered.

Another step that has been added relates to the meeting that takes place on-site between the claimant, the nominated contractor, and EQC. From the new wording, where it states at point 3: “EQC will send you a copy of your Scope of Works which will incorporate any amendments discussed on site with you and your contractor”, is an implication that EQC’s  Scope of Works is not yet final. Does this mean that the amount of damage is up for negotiation? Up and down? Will the EQC on-site representative be suitably qualified to discuss these things? What happens later if EQC don’t agree with the contractor’s prices? What are the rules around all of this?

There have been other changes, and the structure of the Opting Out webpage has been rearranged as well, so I have reproduced it all below. The highlighted bits are what seem key to me – if it affects you please read it all as I may well have misread or misunderstood parts!

 

Opting out

People whose overall home repair or replacement will cost more than $15,000 (+GST) and less than the EQC cap (usually $100,000 +GST per event) are referred to EQC’s Canterbury Home Repair Programme.

Choosing to opt out

You can choose to ‘opt out’ of the Canterbury Home Repair Programme and manage repairs yourself – using your EQC entitlement, but organising all the logistics involved in the repair process.

Taking responsibility for managing all of your repairs is a decision that needs to be made carefully. Taking over the role of project manager from Fletcher EQR means ensuring you have all the necessary building consents and overseeing the repairs of the house. You'll also need to manage any disputes with contractors, should they arise, as well as payment plans.

Cover of the factsheet: 'Opting Out of EQC-Managed Repair'.

Opting out guide and form

The guide Opting Out of EQC-Managed Repair has information to help you make your decision. It includes the opting out form.

The opting out process

If you want to opt out:

  1. Complete and sign the opting out form (included in the opting out guide)
  2. Post or email it to us.

Post:

Earthquake Commission
Opt Out of EQR
PO Box 34027
Fendalton
Christchurch 8540

Email:

We’ll contact you within 15 working days of getting your form and let you know whether you can begin the opt-out process.

After that:

  1. Select a contractor to complete your home repairs.
  2. EQC will contact you to make an appointment to meet with you and your contractor on site with a copy of your most up-to-date Scope of Works. We’ll discuss your repair programme and answer any questions you have about the process.
  3. EQC will send you a copy of your Scope of Works which will incorporate any amendments discussed on site with you and your contractor. You send in your contractor’s quote based on that Scope of Works.
  4. We’ll send you a ‘Confirmation to Proceed’ letter. This will outline the procedure for payments.

Important: Don’t authorise or start any repairs until EQC has given you written approval to go ahead (ie, you’ve got your ‘Confirmation to Proceed’ letter). If you start repairs before you have this, EQC will be unable to complete and agree a final pre-repair scope and repair strategy with you and your builder – and this may mean we cannot pay your invoices.

Payment of invoices when you've opted out

You'll be responsible for managing contractor invoices and EQC payments, so you can pay the full amount to the contractor, on the due date.

  • As work is completed, you’ll present invoices to EQC to be paid.
  • If, for any reason, an invoice falls due before EQC has paid it, then it will become your responsibility, as project manager, to pay the invoice and then be reimbursed.

EQC’s standard payment terms are the 20th of the month following invoice (although in practice we usually pay within two to three weeks of an invoice being presented).

Nominating someone to act on your behalf

You can nominate another person to deal with EQC on your behalf, in relation to:

  • a request to opt out, and
  • the opt out process.

The person you nominate is called your 'authorised agent'.

How to nominate someone:

  1. Read the notes at the start of the authority form (below).
  2. Complete the form and submit it to us at the above email or postal address.

Authority Form: Opting Out of EQC-Managed Repair (PDF, 66KB)

Further questions?

If you have questions about the opt out process, please get in touch.

Useful information

If you decide to opt out of the Canterbury Home Repair Programme, you'll find useful information on hiring competent building contractors on the Building and Housing website (formerly 'The Department of Building and Housing').

Page last updated: 13 Feb 2013

 

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