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Transferring a claim

If you are considering buying or selling a home, being able to access information relating to natural disaster damage is a significant part of due diligence. We recommend getting legal advice before making any commitments.

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Transferring the benefit of an EQC claim

If you are planning to sell or to buy a home, it is important to seek legal advice about transferring the rights and benefits of any claims to the new home owners.

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For example, if a claim has not yet been settled or further natural disaster damage is identified, the benefits of the EQC claim will need to be passed to the new home owner. This process is called ‘assignment’.

Once assignment has been agreed, you just need to let us know, and supply us with relevant documentation recording that assignment. You can get further information on this by phoning 0800 DAMAGE (0800 326 243).

The most commonly used documentation is a Deed of Assignment (DOA) – but any document can be used as long as it is clear about what is being assigned and signed by all parties. Your lawyer can provide advice on this.

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Deed of Assignment (DOA)

Whilst the most commonly used documentation for ‘assigning’ an EQC claim to the new homeowner is a DOA – any document can be used as long as it is clear about what is being assigned.

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What should be included in a DOA?

When we process the assignment, the information received needs to be clear. Below is an example of the type of information we require.

Names:

Full names of all the current owner(s) and all the new owner(s).

Signatures:

The signatures of all Assignors and Assignees must be included and witnessed. Where a party is a company the Deed of Assignment must be signed in accordance with the relevant legal requirements.

The Property:

Address of the property being sold.

Date:

The date of the agreement, and the date at which the assignment takes effect.

Claim Numbers:

CLM/20xx/xxxxxx

This is an area where many Deeds of Assignment are not sufficiently clear. This causes considerable delays and sometimes prevents settlement.

There must be a clear description of which claims are being assigned:

  • If all claims for that property are being assigned, then state this. Do not just list one claim number.
  • If only particular claims are being assigned, then be very clear about which claim numbers.
  • If the building part of a claim is being retained by the vendor, but the land part of a claim is to be assigned to the purchaser, be very clear about this.
  • If any element of a personal property (contents) claim is being assigned, this must be specified (for example, carpets and drapes).

Note that there is a separate claim number for each claim lodged with EQC. If a claimant made claims for damage from the 4 September 2010, 22 February 2011, 13 June 2011, and 23 December 2011 events, there will be four separate claim numbers. If you are the vendor and want to confirm what claim numbers exist for your property, please phone EQC on 0800 DAMAGE to check.

Contact Details:

Include contact details for the purchaser so EQC knows how to contact them to arrange settlement.

Name of Insured:

If the name of the original claimant and the name on the insurance policy are different, the reason for this must be recorded. For example, if the original claimants owned the property under a trust and insured the property in the name of the trust, the Deed of Assignment should record this fact to avoid confusion.

Information Sharing:

Once a person has had the benefit of a claim assigned to them, EQC will generally be able to provide that person with information about the claim including details about property damage.

Sometimes an earlier EQC claim will have already been settled with the vendor, and so will not be included in the assignment. If the purchaser wants to receive information about earlier claims (for example, what damage was claimed for), they should include a clause in the Deed of Assignment stating that the vendor agrees to that information being provided to the purchaser.

Where to send the documentation:

A copy of the DOA (or other documentation) should be sent to:

EQC Claims
PO Box 311
Wellington 6140.

Alternatively, you can email a copy (in PDF format), to info@eqc.govt.nz

Terminology:

“VENDOR, ASSIGNOR, and ORIGINAL CLAIMANT” and “PURCHASER and ASSIGNEE” will usually be the same person, but the particular terms are used above to reflect the fact that they can be different people, as explained below.

Vendor

The registered proprietor who is selling the property.

Purchaser

The person who is purchasing the property.

Assignor

The person who is assigning their interest in the claim. For EQC to settle the claim with the purchaser, everyone with an insurable interest in the claim needs to assign their rights in the claim to the purchaser. Usually this will just be the vendors, but in some cases there may be other people who need to approve this.

Assignee

The person receiving the benefit of the claim.

Original claimant

The person who lodged the claim with EQC. Sometimes the property will have been sold more than once since the claim was lodged.

*Note that there are other times when the benefit of a claim might be transferred including where a relationship breaks up, or where a person has died. You can get further information from us on this by phoning 0800 DAMAGE.

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Important issues for purchasers

If you’re the purchaser, you need to be aware of the following important issues.

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EQC receives a range of different Deeds of Assignment, which often lack clarity about what is being assigned. This can prevent or slow down settlement. Customers may need to get a new or amended Deed of Assignment, which can be difficult and time consuming particularly where the vendor has moved overseas or cannot be contacted. It is therefore important to make sure your Deed of Assignment is very clear and all claim numbers are included.

The fact a claim has been lodged does not necessarily mean the claim is valid or that EQC will be able to accept it. An issue with the validity of a claim might not arise or be identified until well after a claim is lodged. Because of this, we recommend you seek legal advice when purchasing a property that is subject to an EQC claim.

What is assigned will depend both on what the Deed of Assignment says and on any relevant provisions in the private insurance policy. We recommend you seek legal advice and speak with your private insurer and mortgagee.   

Where an EQC claim is assigned, the assignee (the person receiving the benefit of the claim, for example a purchaser) will have the same entitlement(s) under the Earthquake Commission Act as the original owner. That means they will receive any remaining entitlement up to EQC’s cap for an event.

However, where the related private insurance claim can be assigned, the assignee may not have the same entitlement as the original owner, or any entitlement from the private insurer at all. When the parties have a Deed of Assignment drawn up, it’s important to find out from the private insurer what, if any, insurance entitlement the assignee would receive.  

EQC is limited in its ability to disclose information about a claim to you without the original claimant’s consent. If you want information about a claim before you purchase the property, you will need to discuss this with the claimant. If you want information after you’ve purchased a property, you will need to have obtained a Deed of Assignment (or similar document).

It can be useful to include a clause in your Deed of Assignment requiring the vendor to assist in the completion of a claim. Discuss this with your lawyer.

EQC claims are subject to excess. EQC will deduct the excess amount due on the claim from any cash settlement it makes to the purchaser as a result of the Deed of Assignment. If the property is repaired by EQC under the Canterbury Home Repair Programme (CHRP), EQC will invoice the purchaser for the excess amount if they own the property when the repairs are completed. The assignment of the claim can only include the benefits and not burdens, so an agreement in the Deed of Assignment on who will pay any excess will not change who EQC invoices. 

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Getting information about EQC claims

/contact-usBefore buying or selling a property, most interested parties would like to see the EQC documents relating to the assessed disaster damage, and the status of the repairs.

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To avoid delays in a request for documents, a vendor (property owner) can get EQC documents before putting their home on the market. You just need to email EQC with the request and your claim number or the address of the property. See the contact us page for details.

If you are looking at purchasing a property in Canterbury, and you want to find out if there has been an EQC claim for land or building damage from the Canterbury earthquake sequence, head to canterburymaps.govt.nz  Click on the Property Search section and use the address to find if there are any EQC claims listed.

If you are interested in purchasing a home you can ask your lawyer or estate agent to request documents from the property owner or apply to EQC to obtain property-related information about any previous claims for damage on that property. Providing this information can take up to 20 working days. Apply using our Official Information Act request form.

You can read more about the documents we provide on our OIA document lists page.

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Questions and answers

A variety of Q&As about transferring a property claim.

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I'm purchasing a property – what happens with the claim the current owner has lodged?

The owner and mortgagee (for example, 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 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).

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.

Please note:

  • 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.
  • You can read the Earthquake Commission Act on the Legislation website
  • 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?

A Deed of Assignment can transfer both – but what is assigned will depend both on what the Deed of Assignment says and on any relevant provisions in the private insurance policy. We recommend you seek legal advice and speak with your private insurer and mortgagee.

Where an EQC claim is assigned, the assignee (the person receiving the benefit of the claim, for example a purchaser) will have the same entitlement(s) under the Earthquake Commission Act as the original owner. That means they will receive any remaining entitlement up to EQC’s cap for an event.

However, where the related private insurance claim can be assigned, the assignee may not have the same entitlement as the original owner, or any entitlement from the private insurer at all.

When the parties have a Deed of Assignment drawn up, it’s important to find out from the private insurer what, if any, insurance entitlement the assignee would receive.

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.

You can read the Administration Act 1969 on the Legislation website

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: info@eqc.govt.nz

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