I'm purchasing a property – what happens with the claim the current owner has lodged?
The owner and mortgagee (eg, the bank) at the time of the damage occurring have the insurable interest in the property. In some circumstances they may agree to transfer their claim entitlement to a new owner using a legal document such as a 'Deed of Assignment'.
- Either the buyer or seller can organise for the Deed of Assignment to be drawn up.
- Your lawyer should be able to prepare the document for you. (Note that EQC cannot reimburse solicitors’ fees.)
Where CERA is purchasing land and buildings there are particular requirements: you can get information about these from CERA directly.
I’m about to purchase a property, but EQC isn’t able to tell me if there are any outstanding claims on it. Why is this?
EQC is only able to provide information to the person who lodged the claim – usually the current owner.
However, we understand that it is important for a potential buyer to know what claims for damage have been made and the status of these claims.
- We recommend you talk to your real estate agent and stipulate that it is a condition of the sale that you are provided with a full and accurate statement of all the EQC claims for the property, including settled and outstanding claims.
- If you proceed with the purchase of the property, either the seller’s lawyer or your lawyer should draft a Deed of Assignment, transferring any relevant claim entitlement to you.
I’ve bought a property and have found out that the previous owners received a payment from EQC to make repairs, but these repairs were not carried out. What can I do?
Ideally, the purchase price you paid recognised the value of the property in its unrepaired state. You may decide to carry out the repairs yourself.
- EQC can’t pay twice for the same damage.
- Under the Earthquake Commission Act EQC can decline a future claim where natural disaster damage was caused or exacerbated by earlier natural disaster damage for which EQC made a payment and that payment was not used to repair the property.
- EQC may cancel insurance in certain circumstances – for example, if the repairs are not carried out.
If you have concerns about any of these things, you may wish to take legal advice.
I’ve bought a property that has outstanding claims on it. I didn’t know I needed to have the entitlement to the claims legally transferred to me. I’m already living in the house. What should I do?
- In situations like this EQC can put a hold on processing the claim(s), which provides time to sort out who is entitled to any payments.
- If, after talking with both the original and new owners, it is still unclear who is entitled to any payments, EQC can use a court process called an ‘interpleader’ to determine the outcome.
- Costs of the interpleader process may be paid out of any resulting claim payment or by the losing claimant. This is decided by the court.
Does a Deed of Assignment transfer just the EQC portion of the claim, or the private insurance ‘top up’ as well?
It can transfer both – this depends on the terms of the Deed of Assignment.
When you have a Deed of Assignment drawn up, it’s a good idea to find out from the private insurance company whether you’ll receive the same entitlement as the original owner. Some policies give the insurer the right to choose to make a payment based on the indemnity value of the property rather than the rebuild value. This payment would be a lower amount.
What happens to the claim(s) entitlement if the owner of a property dies before the claim is settled?
If a property owner passes away before an EQC claim is settled and they had a Will, then the terms of the Will determine the transfer of the EQC claim entitlement.
If there was no Will, then they will have died ‘intestate’ and the Administration Act 1969 will determine who is entitled to any EQC payment.
I'm in the process of getting a divorce. Who will get the payout from EQC for the damage to our home?
This depends on individual circumstances.
- If the EQC claim was originally lodged in the name of one owner only, then they would normally be the only person entitled to any claim payment. However, they may agree to assign their entitlement to the claim to another person, or share that entitlement. This would need to be clearly stated in a Relationship Property Agreement that dealt specifically with EQC claims. A similar outcome might result from a court order.
- If the original claim was lodged in the names of both spouses, EQC would continue to deal with both people unless we were sent a Deed of Assignment, which both spouses had signed, agreeing to transfer the entitlement to one of them or to another party (eg, a buyer of their property). Again, this would need to be clearly stated in a Relationship Property Agreement that dealt specifically with EQC claims, or be dealt with in a court order.
If there is no Relationship Property Agreement or it does not mention how to treat EQC claims, then each situation will be considered on an individual basis and specific legal advice may be sought by EQC. The claim may be put on hold to allow time to determine who should receive any claim payment.
Who can I contact if I need more information about assignment of claims as they relate to my personal circumstances?
Contact the EQC Call Centre.
- Phone: 0800 DAMAGE (0800 326 243)
- Email: firstname.lastname@example.org