Pursuant to section 125K of the Weathertight Homes Resolution Services Act 2006 ("the "Act"), the Minister of Finance makes the following statement:
"I, The Honourable Simon William English, Minister of Finance, on behalf of the Crown, specify that the terms and conditions on which guarantees or indemnities may be given under section 125I(2) of the Act must provide that:
- Any indemnity provided will take the form of a loss sharing agreement.
- If a participating lender makes loans to eligible owners for the repair of residential dwellings that are not weathertight, and suffers a loss on the sale of the property, then the Crown will bear a share of those losses.
- The share of the loss will be reflective of the amount owing in respect of the repair loan at the date the
loss arises as a proportion of the total amount owing at that date and which is also secured by a mortgage over the residential dwelling.
- The Crown support period for a loan which is or includes a repair loan applies for a maximum period of ten years from the last drawing down of the
repair loan.
- The amount the Crown is obliged to pay the lender shall be reducible in certain circumstances where standards specified in the loss sharing agreement
have not been met.
- The lender will be required to comply with reasonable loan related policies and standards which in the lender’s opinion appropriately address the particular circumstances of repair loans, the homeowner and the affected residential dwelling.
- The loss sharing agreement may include such other terms and conditions as are considered necessary
or desirable by the Minister for Building and Construction, including to give effect to the following matters: the making of claims, the maintenance of records by the lender, lender reporting, Crown audit rights, and dispute resolution."
Dated at Wellington this 25th day of July 2011.
HON SIMON WILLIAM ENGLISH, Minister of Finance.