Is your home leaking?

The word “leaky” now carries a resounding threat to all home owners as we have heard this word all too often in the media. The majority of us have by now all had our share of horror stories from neighbours, friends and family.

So, is your home leaking? Are you about to buy a “leaky home”? The 1990’s exposure to more lenient building regulations has exposed the nation to the $25 billion headache of the “leaking buildings” syndrome. But what has this taught us?  Some clients believe there is a hard fast rule that buildings built before the 1990’s are “safe” and that “recent” buildings are also “safe” due to stringent regulations imposed on builders today, but are the houses built today “safe”? Unfortunately there are still “bad buildings” today, and instead of simply relying on experts such as builders, consultants, agents or even lawyers, potential home owners are now in an era where you need to become a “prudent purchaser”.


What does a “prudent purchaser” mean?

It is no longer reasonable to accept that a “prudent purchaser” (namely one who will unlikely face contribution negligence in any leaky building claims) would not have conducted their own due diligence (property enquiry) and such prudent purchasers should have obtained (at a minimum) a building report and a Land Information Memorandum (LIM) report

(NB: Contributory negligence basically means a claimant/plaintiff is found to be partly responsible for any loss or damages. This can also arise if they have failed to mitigate their losses by failing to maintain their property).

With a builder’s report we highly recommend you obtain a written report rather than relying on a verbal report. Trying to save a couple of hundred dollars could later cost you hundreds of thousands of dollars.

A LIM report is crucial, as this provides the council approved information and disclosure of all the property details including any resource consents, building consents, final Code Compliance Certificates (“CCC”)/ Code of Acceptance (“COA”) or Safe & Sanitary Reports. The LIM report will show you if the house never received a final CCC or COA and surprisingly there are many houses that fall under this category. This could again affect your ability to claim against the deep pockets of the Council if your house was found to have weathertightness issues. A recent Court of Appeal decision has even said that if certified builders gave the final approval for your house instead of Council, you will not be able to claim damages against Council. This is an important issue that needs to be properly assessed.

What does a “Leaky Building” look like?

The Department of Building and Housing provides a comprehensive summary of the typical characteristics of a leaky building. Click here to view this summary. The common features of a “leaky building” are said to be:

  1. Parapets and flat roofs;
  2. Roof to wall junctions;
  3. Pergola fixings;
  4. Handrail fixings;
  5. Lack of flashings to windows and penetrations;
  6. Decks over living areas;
  7. Balustrade to deck or balustrade to wall junctions;
  8. Clearances at the bottom of claddings; and
  9. Level of the ground outside is above the interior floor level

If your house has any of the characteristics stated above and you have high moisture level readings, you should seek advice from a building consultant immediately.

For more detailed advice on spotting risks in cladding and supposed leaky buildings, see the following report by the Home Buyers Report by clicking here.

What should you do if you have a leaky building home?

Contact our litigation specialists Ross Dillon or Tina Hwang for further advice and information. It is important that you have a valid claim especially with respect to the time limitation periods that apply. Typically you have six years to bring a claim against anyone under tort or contract (this date starts from they day you have knowledge of the damages or loss, or more importantly from the date that you should have had knowledge). The Building Act provides you a maximum period of ten years to bring a claim from the time the works were completed (often taken from the date of CCC).  

From then, you will have to assess who you can bring a claim against and whether they are still around (unfortunately many builders, developers, consultants may have been liquidated, bankrupted or have simply disappeared). You will also need to ascertain the quantum of your claim by getting a qualified specialist to confirm an approximation of the costs. It is always better to repair the property first and then make the legal claim as you can then cover all the costs of repairs. However the reality is that most people will not be able to afford to cover the repair costs upfront and end up facing the risk of having consultancy fees or construction costs increase after they have settled or obtained judgment for a set figure. Litigation can be a long, expensive and stressful process so it is important you understand the procedure before commencing this option.


What is the Financial Assistance Package (FAP)?

The FAP, in a nutshell, is the government’s quick fix solution to leaky building claims. If you have a valid claim against the Council, then in return for withdrawing your claim against Council (you can still sue other possible defendants), the local Council will pay 25% of the weathertightness repair costs and the government will contribute another 25%. This is a relatively controversial new scheme and very few people have actually benefited from this. It is a “no fault” basis and designed to take the stress out of owners with leaky building homes, and to simply get the house fixed.

This means however that owners need to pay for the full cost of repairs and have 50% (25% + 25%) of the costs reimbursed after payment. It further applies to repairs for weathertightness only and therefore means that any non-related issues such as carpet, kitchen appliances, electrical appliances, painting etc will not be covered which can often be a significant part of the costs.

Very few lawyers in the country specialise in property, litigation and construction and you will often get a disconnect between the three when working to fix the property. Queen City Law will assist in ensuring that you receive the legal services you require to review your property and provide a legal opinion on your options, litigate if necessary and further attend to the construction contract and overview the construction project to ensure the house is actually fixed. We believe your money should be put into fixing the house, not on lawyers and would be happy to dicuss any of the above with you.

Please feel free to contact our litigation specialists Ross Dillon or Tina Hwang for further advice and information.