Raumati couple Stevenand Katharine Manson thought they were doing the right thing when they got abuilding report before purchasing their two-storey monolithic-clad home.
The house inthe seaside suburb north of Wellington was built in 2003, and has many featurestypical of the time such as enclosed balconies and parapet walls.
Theirpre-purchase check was done by a member of the New Zealand Institute ofBuilding Inspectors. While his report picked up some minor issues, it indicatednothing of the problems that were to come.
The home turnedout to be a classic leaky building. By mid-2013, less than 18 months after thecouple bought it, a host of defects had emerged including decaying timberframing and flooring, premature corrosion in steel beams, and water damage toplasterboard linings and carpet.
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The Mansonssued the previous owners alleging they had misrepresented the home’s conditionto them, but lost in the Court of Appeal. They did manage to claim against thebuilding inspector but only for a fraction of the amount it’s estimated it willcost to fix the house.
“Regrettably,the report failed to identify the weathertightness issues,” the Court of Appealsaid in its November decision. “Its author, Ian Hall of All BuildingInspections Ltd (ABI), has settled, but we were given to understand that ABI’sliability was limited, presumably by contract, to $68,000, a small part of theagreed loss of value (of) $537,000 and even smaller part of the remediationcost (of) $940,000.”
The case is atimely reminder that the New Zealand pre-purchase building inspection industryis unregulated, and buyers need to be very careful about who they hire, RogerLevie, chief executive of the Home Owners and Buyers Association (HOBANZ) says.
“Anybody canset themselves up as an institute of something and they do,” Levie says.
Often buildinginspectors state that they carry out inspections to a 2005 standard known as NZS4306. But there’s no process for being accredited to this standard, and norequirement for inspectors to have any kind of qualification, he says.
“Many of thepeople who set themselves up in this area are builders who have either retiredor some of them have failed or lost licences.
“The result ispeople are producing these reports that are very superficial, gettingcredibility by quoting the New Zealand standard, and not really looking at thehighest risk aspects and performance of the building,” Levie says.
Leaky buildingissues are the most common problems HOBANZ sees, and yet many buildinginspectors exclude liability for weathertightness in their reports.
The consumeradvocacy group says during the height of the leaky building era from 1993 to2004 around 250,000 dwellings were built using risky materials such asmonolithic cladding and untreated timber. It estimates that the majority ofthese will fail, and that so far less than 15 per cent have been fixed. Thismeans there are still plenty of homes out there that buyers need to be wary of,and the 10-year period for making claims against anyone responsible such as thebuilder or the council that certified the construction has very likely expired.
Whether or not thehouse you’re wanting to buy is potentially leaky, it is always important tochoose a building inspector with appropriate qualifications, HOBANZ says. Itoffers the following five hot tips:
1. Surveyors are sweet. Choose inspectors who are members of theNew Zealand Institute of Building Surveyors. Its members undergo specialisttraining in conducting pre-purchase inspections, and surveyors understand howdifferent products and building systems perform long term. These reports cost abit more than other inspections, however, at around $1000. Other goodorganisations to look out for are the Building Officials Institute of NewZealand and the Royal Institution of Chartered Surveyors.
2. A ute and a dog is not a qualification. Just because your mate’s a builder doesn’tmean he has the appropriate skills to check over a house. Builders know how tobuild, they don’t necessarily know how to spot the risk factors or have anin-depth knowledge of the Building Code.
3. Get it in writing. Even prior to a building inspection, ifyou’re communicating with a vendor or vendor’s agent do so in writing. In theRaumati case the Mansons sought verbal assurances from the sellers that thehome wasn’t leaky, which ultimately didn’t cut it in court. Ask for writtenanswers to any questions about the condition of the home, Levie says. “Thisstuff properly documented can go a long way to helping sort it out if it’swrong.”
4. New is not necessarily best. You’re not saved because you’re buying anew property, Levie says. Given the issues with quality in the residentialbuilding sector at the moment, it’s worth having somebody independent reviewyour shiny new home before you hand over the final chunk of money. Thealternative is spending the next year or two fighting with your builder if itturns out there are problems.
5. Leakyhomes: How do you really know?Unless there are obvious outward signs – in which case the problem has gotpretty bad - the only way to truly know if a home has weathertightness issuesis to do invasive testing, which means cutting holes in people’s walls. Howeverthe leaky home problem has been around long enough that good inspectors know therisk profile, such as the age and design of the house.
