Leaky home obligations 'overlooked'

Last updated 05:00 15/07/2012

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People are still buying leaky homes because the hot Auckland property market is encouraging them to forgo due diligence, according to property experts.

John Gray, president of the Home Owners and Buyers Association (Hobanz), said some agents were encouraging people to buy unconditionally to secure their purchase.

"Even if they do get a pre-purchase inspector to do the report, we have serious concerns about the competencies of those who are currently trading in that line of business," he said.

"So people are buying these properties, in some cases having either been coerced into going unconditional and not getting a report, or getting a report that is not competent."

David Whitburn, the president of the Auckland Property Investors Association, agreed people were still unwittingly buying leaky homes.

He said vendors who were knowingly selling a leaky building had to disclose it, but there was no such requirement for unleaky homes built with defective types of cladding. A building inspection of homes with a plaster cladding system was "an absolute must".

"Some people just don't understand it. I know one person who has just immigrated from France recently, they had no clue what a leaky building was."

Mt Eden real estate agent Keith Ward, who himself lost $350,000 over a leaky home, said many owners would be unaware their home was considered potentially leaky until they came to sell.

Even if vendors failed to disclose it, real estate agents were now required to draw attention to the house's materials or urge checks.

"When I say that to vendors, they get incredibly upset, angry and accuse me of branding their home that doesn't leak with this terrible leaky home syndrome.

"But unfortunately we have to disclose the cladding and the liability or potential liability under the act we now work under.

"When they say, 'But it doesn't leak', that's not the point. It will do one day, even if it's 25 years away."

Gray said, however, that it was not true all houses built with monolithic cladding would eventually leak.

Many plaster homes were "perfectly sound" if built properly, and people were "dropping their guard" on leaky houses built with other materials. However, he said there were certainly vendors who had been "deceitful" about their liability, putting agents in a "horrible position".

"Most of the agents are now coming to grips with their responsibilities and are erring on the side of caution but ironically many of them are just staying silent.

"But even silence is against the rules."

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Leaky homes were approved between 1994 and 2005, a combination of untreated timber, new designs and badly installed new building materials.

A PricewaterhouseCoopers report in 2008 put the cost of the crisis at $11.3 billion, based on a consensus estimate of 42,000 buildings. Some said the real figure was closer to 89,000.

Affected homeowners have 10 years after their consent was signed off to lodge a claim for partial Crown and local government assistance.

- Sunday Star Times

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