IAG's six-year cut off for court action involving assigned insurance claims was likely to be challenged, according to Megan Woods MP for Wigram and Labour spokeswoman for Canterbury Issues.

The cut off period from September 4 has taken lawyers and conveyancing professionals by surprise, although IAG said it was always its position.

It applied to people who bought homes with claims assigned from the previous owner.

SCOTT HAMMOND/FAIRFAX NZ Anyone buying an earthquake damaged or repaired home needs to do their homework.

IAG said it would continue to honour and settle claims but claimants could not take court action under its interpretation of the Limitations Act - a move lawyer Duncan Webb said put owners at a disadvantage.

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By contrast, Tower's six-year limitation on legal action applied from the time a claim was settled or rejected, rather than from the date of the earthquakes or the incident leading to a claim.

IAG's policy is based on a view assignees cannot "own" a policy struck with a previous owner, only the assigned claim.

Woods said a special $1 million fund to be set up by Labour could be used to obtain a declaratory High Court judgment because some lawyers believe it is a grey area.

"It's about fairness for people who bought homes and and assignments of claims in good faith. They don't have the same legal options as someone who owned their home at the time of the quakes.

"It also affects anyone who finds a repair has failed, so there are an ongoing set of problems around this," Woods said.

"It's why we need a tribunal set up to hear claims," Woods said.

Numbers affected are unclear because no centralised records are kept on houses sold after repair or as is where is.

IAG said it had 2130 claims outstanding representing about 1000 properties but did not identify how many involved assignments.

A spokesperson for EQC Fix, Mel Bourke, questioned how many real estate agents and conveyancers had sold homes recently to buyers who believed they had full entitlements over claims, including the right to legal action.

Bourke said there was a huge underlying problem with Christchurch's older housing stock.

She said more than 250 homeowners had responded to a survey she initiated, detailing inadequate scopes of work and poor repairs.

EQC had identified 11,500 homes where repairs had to be revisited.

One buyer of a repaired house who recently found subsequent damage had then discovered he needed to have a new claim assigned by the previous owner who asked "what's in it for me?", meaning he wanted a payment.

The buyer had bought the house at market value, but now faced a substantial repair bill to bring it up to standard if he could not persuade the seller to do the right thing and assign a new claim.

Bourke said there was a wider issue of inadequately repaired homes where a subsequent owner made a claim after discovering a repair had failed.

She called for a central database for all information about repaired homes in Christchurch.

Land Information Memorandums (LIMs) are held by the Christchurch City Council, but there is no legal requirement for LIMs to include earthquake engineering or repair reports.

"LIM staff cannot provide information they don't have. Any opportunity that informs the public would be welcome. Regrettably the council is not in a position to make this happen," a council spokeswoman said.

National MP for central Christchurch, Nicky Wagner, placed the onus back on councils.

"I acknowledge this is an important issue and I'm very happy to raise it with the mayor. Even prior to the quakes, anyone purchasing a house was advised to get it inspected, and I think that's even more important now," Wagner said.

"I've been working with IAG to ensure they take a liberal interpretation of the Limitations Act, and that means excluding holiday homes and rentals. IAG has assured me it will consider this issue on a case by case basis.

"I'm pleased to see other insurers have extended their deadlines and that the Residential Advisory Service will continue to work with those affected," Wagner said.