Housing news: NZ's 'leaky homes'

[anski]

John Gray: A rotten business

A new TV documentary about the leaky homes disaster reveals the carnage exacted on Kiwi owners. Barney McDonald talks to campaigner and host John Gray.

Picture our parliament building: solid, imposing, stately. Now imagine it oozing filthy water through cracks and chips in the brick and mortar, with mould creating a patchwork of discolouration across its arcane surface. Now add to that mental - and altogether unlikely - image the crusading figure of Aucklander John Gray wrapping the tableau in police crime scene tape.

Wouldn't that make a compelling critique on the ridiculous and heart-wrenching reality of the leaky buildings syndrome currently blighting New Zealand, and the Government's role in the travesty?

Admittedly, Michael Moore beat Gray to the stunt by wrapping Wall Street headquarters, and a few brokers, in such tape at the conclusion of his contentious film about the recent American financial crisis, Capitalism: A Love Story.

Although Gray and the team behind new one-hour TV documentary A Rotten Shame did consider following in the entertaining footsteps of Moore, they chose simply to front up to politicians at Parliament to demand answers, eschewing show-pony tactics to make their point.

"Well, yeah, what you don't see in the doco is us being ordered off Parliament grounds, so that was a bit unfortunate," laughs a mildly indignant Gray.

"Our initial approach to the doco was to be a little like Michael Moore. I thought, 'Well, it could be a bit of fun while also telling the more serious story that needs to be aired'."

Like Moore, Gray is an Everyman citizen who decided to front a documentary because of his own experiences dealing with the subject. In Gray's case, he discovered his Auckland townhouse leaked after trying to install a vent in a wall. He was confronted by a building that was rotting insidiously from the outside in, just seven years after being built.

It was 2002 and what followed was a protracted legal battle, which Gray won, but also an epiphany that he had to do everything within his power to help and support other Kiwis in the same leaky boat.

He has since set up the Home Owners and Buyers Association (Hobanz) to fight the good fight, along the way amassing a skyscraper of facts, figures and first-hand accounts of the extent of the carnage on health and wealth thanks to shoddy building regulations, practices and materials.

"The fact that John had a leaky home makes him instantly credible. Plus, when you listen to him on screen you believe and trust him," insists A Rotten Shame director John Hagen. "The film is a journey of discovery. John knows a lot about leaky homes but we were all discovering new things along the way, like we must be on to a big story if we're getting threatening letters from lawyers before the programme is even fully edited."

Gray credits his fulltime job as an airline pilot for instilling in him a sense of the responsibilities organisations need to take on behalf of the consumer, a philosophical and practical understanding designed to ensure the best outcome for all involved, from company to staff and the public.

As a commercial pilot for more than 30 years and an employee of Air New Zealand for 22 years, he has embraced the industry's commitment to safety and service as an ideal benchmark to which the building industry should aspire.

"I guess why I'm so passionate about this cause is that my daily job is about delivering people safely from A to B," explains Gray. "Our commitment to safety and their welfare is huge. We spend a great deal of money making sure we don't get that wrong. I love my flying job because it's in an environment where standards are paramount."

As a result of his job, Gray's time is stretched as thin as the patience of many of the individuals, couples and families desperately awaiting judgments or pay-outs on their leaky home. Gray is now devoted to short-haul international flights to spend more time at Hobanz and a modicum of down time with wife Lorraine and sons Taylor, 8, and Marcus, 6.

In fact, with shooting completed before Christchurch's September earthquake, surely Gray has settled back into a normal family life? Not so, insists producer Rachel Stace.

"I think it's taken a huge personal toll on him," she says. "He doesn't really have a life he can call his own. The man deserves a knighthood. He's already been nominated for New Zealander of the Year."

Hagen concurs. "John is a bloody good guy. It's impossible not to admire him. His passion and sincerity are real. He's a genuine Kiwi hero."

Gray is a little more circumspect about the dilemma he continues to face trying to juggle work, family and his crusade. His approach to the problem mirrors his respect for the airline industry, though he does concede that his family has missed out the most.

"It is an issue," he admits. "This is a hobby gone crazy. And I only do it because I care about the housing futures of all New Zealanders, and the health of our children to come. This is a really important issue. That's what keeps me going because otherwise I would have given up a very long time ago since it's had a huge impact on me and my family."

Gray's grasp of the multitude of complex issues surrounding leaky houses, plus his sensitivity to the painful experiences of those whose houses are no longer their castles, marks him as perfect fodder for a political career (minus the sensitivity).

At an advance screening of A Rotten Shame attended by crew, Hobanz folk and a number of victims, he shakes hands and exchanges pleasantries like a United Nations envoy and introduces the documentary to the audience with the ease of a seasoned speaker in Parliament (plus the sensitivity).

But politics is not on Gray's agenda. He knows his happy place, preferring to agitate for progress through Hobanz rather than dance with the devil.

"I'm not wanting to get into the political arena because we think we can create political movement that empowers our citizens to make change," he says. "Not political change, but change around standards and empowering consumers to make good choices because they have a responsibility to themselves to do so. Then they can drive standards back into the building industry and demand more of it.

"We're saying we'll leave it to the legislators and lawmakers to make laws and regulations but it's a waste of effort trying to change the way they think."

This doesn't mean Gray hasn't rubbed shoulders with politicians. One of the defining moments in the documentary is an on-the-fly interview Gray wrenched from PM John Key that concludes with an ill-conceived comment from the Prime Minister about solving some leaky homes claims by getting people off benefits.

It caused ripples of mirth and incredulity from the special screening, in large part because it shows even the country's leader is struggling to grasp the enormity of the problem.

"It was most unfortunate that we had to resort to standing him up in that way," concedes Gray. "And in fairness to him it's a complex subject and as a Prime Minister he's not expected to know the minutiae of every topic that the Government is dealing with. But it probably was a low point for me in terms of how the Government is trying to sell its financial assistance package and not really understanding the difficulties that poses."

Now picture Gray wrapping the Prime Minister in crime scene tape, bearing in mind it's hard to dance around the issues if he's bound by the truth.

A Rotten Shame plays on TV One, Wednesday at 9.30pm.

[Song_Si]

Leaky homes package passed by Parliament
5:22 PM Tuesday Jul 12, 2011

The Government's rescue package for leaky home owners was enacted by Parliament today on a unanimous vote.

Building and Construction Minister Maurice Williamson, who put it together, said it would allow thousands of homeowners to get out of the trap they had been caught in.

"I've spent the last two-and-a-half years looking into the eyes of hundreds, if not thousands, of people with leaky homes," he said during the third reading debate on the bill.

"It's one of the most ghastly blights on the landscape of this nation, you could not help but feel for people who, through no fault of their own and who had done nothing wrong, ended up with their biggest asset in life rotting before their eyes and no way out of it."

Under the $1 billion package, qualifying homeowners will receive a 25 per cent contribution from the Government and may receive 25 per cent from their local council. They can pay the rest through bank loans.

The leaky home problem emerged in the 1990s and Mr Williamson said no one thing was to blame.

"This was a systemic failure across the entire industry," he said.

"This was designers, this was builders, this was materials, this was construction methods, this was consenting, this was inspections, this was homeowners not doing relevant maintenance...monolithic cladding used with no cavities in the building design and non-treated timber was a recipe for disaster."

Mr Williamson said money would be paid when the work had been done.

"We're not going to be handing out large chunks of money to people who own leaky homes who could maybe take the money and run, and sell the leaky home to someone else."

Labour supported the bill but MPs said it didn't go far enough and many people would miss out.

Mr Williamson said Labour spent nine years in power saying leaky homes weren't a government problem.

Homeowners who don't want to take up the offer can still go to litigation but Mr Williamson said they could end up with settlements worth less than their legal bills

[Song_Si]

some background on the leaky buildings epidemic in NZ


What’s all the fuss about?
You’ve probably heard about leaky buildings in the media, but unless you’ve been directly affected, you may be wondering what all the fuss is about.

During the 1990s a considerable number of houses were built using methods that haven't withstood the weather conditions in New Zealand. Because of the problems involving design, and installation of materials, these houses leak when it rains. In some cases the materials themselves were used inappropriately.

Once water or moisture gets behind certain cladding types, if there is no cavity between the cladding and the framework, the water becomes trapped and cannot easily escape or evaporate.

In 1998, a change in the New Zealand standard for Timber Treatment (as referenced in Acceptable Solution B2/AS1) allowed the use of untreated kiln-dried timber in wall framing. If this untreated timber framing gets wet, the timber starts to rot. Likewise, steel framed buildings and treated timber can also be affected if they remain wet long enough. This causes, in some cases, extensive damage to the fabric and structure of the house.

A side effect of leaking buildings is the risk to human health. Some moulds that grow on damp timber and other materials can cause respiratory and skin problems.

more at: Consumer Build website including tips on what to look for if considering buying a house

[anski]

Leaky-home owners should get a second opinion from a building consultant before they sign up for the Government's compensation package, an expert says.

The deal becomes available from today after the Government said it had reached a loss-sharing agreement with the eight main retail banks on loans for repairs.

Homeowners and Buyers Association chief executive Roger Levie said the bailout would cover only the bare minimum of repairs and might not protect against further leaks.

He urged those who applied for the deal to get an independent quote on the repair cost.

"Homes will be repaired to a standard which is the minimum required to obtain a building consent," he said. "We also expect that the scope will be confined to weathertightness issues ... unfortunately these defective homes often have structural problems as well. We are concerned that homes repaired under the scheme could suffer from secondary failures and the process will not fully restore the value of these homes."

The Government was negotiating with banks over the loss-sharing arrangements. It initially proposed a 100 per cent guarantee for defaulted loans but wound it back.

It is expected the Government will now cover 15-20 per cent of the banks' shortfall if a homeowner defaults. The homeowner may then be required to pay back the Government.

Bankers Association chief executive Sarah Mehrtens said homeowners would have to meet lending criteria.

"Eligibility and affordability are key elements of the package," she said. "Customers will need to carefully consider which option best suits their needs."

Department of Building and Housing weathertight services group manager Jeff Montgomery said those who had already begun repairs and lodged a claim with the Weathertight Homes Resolution Service would be eligible for the package.

About 4000 applications were with the service.

A new homeowner, who bought a property with knowledge of leaks, could also apply, as long as the house was constructed within a 10-year limit, he said.

THE DEAL

The Government and local authority will each pay 25 per cent of the cost of leaky-home repairs, and the homeowner must get a loan from the bank to pay the rest.

Signing up to the deal means homeowners forgo the right to sue contributing councils and the Government.

It must be up to 10 years since construction or alterations that lead to the leaks.

Auckland, Wellington, Christchurch and Tauranga councils have all said they will participate and other affected councils are considering the deal.

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Councils who did not sign off the building work will not contribute, meaning property owners will have to find 75 per cent.

The problem affects apartments, townhouses and stand-alone homes, mostly built between 1992 and 2005.

A PricewaterhouseCoopers report in 2009 estimated up to 89,000 homes were affected.

The Government says the package will cost $1 billion over five years and estimates 23,500 households are eligible for the deal.

Leaky-home owners warned to take care | Stuff.co.nz

- Stuff

[anski]

Originally Posted by Song_Si

Leaky homes package passed by Parliament
5:22 PM Tuesday Jul 12, 2011

The Government's rescue package for leaky home owners was enacted by Parliament today on a unanimous vote.

Building and Construction Minister Maurice Williamson, who put it together, said it would allow thousands of homeowners to get out of the trap they had been caught in.

"I've spent the last two-and-a-half years looking into the eyes of hundreds, if not thousands, of people with leaky homes," he said during the third reading debate on the bill.

"It's one of the most ghastly blights on the landscape of this nation, you could not help but feel for people who, through no fault of their own and who had done nothing wrong, ended up with their biggest asset in life rotting before their eyes and no way out of it."

Under the $1 billion package, qualifying homeowners will receive a 25 per cent contribution from the Government and may receive 25 per cent from their local council. They can pay the rest through bank loans.

The leaky home problem emerged in the 1990s and Mr Williamson said no one thing was to blame.

"This was a systemic failure across the entire industry," he said.

"This was designers, this was builders, this was materials, this was construction methods, this was consenting, this was inspections, this was homeowners not doing relevant maintenance...monolithic cladding used with no cavities in the building design and non-treated timber was a recipe for disaster."

Mr Williamson said money would be paid when the work had been done.

"We're not going to be handing out large chunks of money to people who own leaky homes who could maybe take the money and run, and sell the leaky home to someone else."

Labour supported the bill but MPs said it didn't go far enough and many people would miss out.

Mr Williamson said Labour spent nine years in power saying leaky homes weren't a government problem.

Homeowners who don't want to take up the offer can still go to litigation but Mr Williamson said they could end up with settlements worth less than their legal bills

I am afraid that in the past many of the home owners collected compensation, then sold the houses on without either doing repairs or advising buyers they were leaky.
Once a claim has been paid out no further claims can be made.
I have a friend who works for a major real estate company, that sold a leaky home in the belief it was not, (on the basis of what the seller told him) however he was found to be in the wrong & had to pay out a substantial amount in compensation because the sellers had fled to Australia !!

[Song_Si]

My last house (Wellington) was built, along with 27 others, in a new subdivision at Owhiro Bay 1999-2000.
Houses had mainly been owner-built, some built by the subdivision developer (the dodgy ones).
At the time we bought, 2003, some houses already showing signs of 'leaky building' all ones with the monolithic cladding and being stripped/rebuilt/repaired. By 2008 about 12 either had, or needed, remedial work. What a nightmare, of course the development company had been dissolved the owners had no comeback on the builders.
We'd looked at many houses before buying, and steered away from anything with that cladding and the 'style' they tended to have - no eaves was common. As I used to run alot in the area I'd see many houses in the early stages - first external giveaway was being able to see the outline of the framing inside the wall - on the outside, as dampness worked through the paintwork.
Place we bought was one of two built by an English couple who built two - one for their son on next section, and they had cut no corners, architect-designed and built well above building standard minimums. They sold one when the realised a three-level house on a hill section was not ideal for people in their 70s. We still paid for an independent building report; as they'd bought the property and started from scratch they had kept every document relating to the section excavation (on a hillside), all the periodic building inspection reports, and details of all materials used incl the timber treatment schedule.
Made it easier to sell when we could pass all this info, plus a new valuation and building report, to potential buyers.
I'd be very wary of buying any house built in the l-h era; secondly, I'd never trust any NZ real estate agent. Independent valuations and thorough building inspections are money well spent.

[Song_Si]

Originally Posted by anski

John Gray: A rotten business

A new TV documentary about the leaky homes disaster reveals the carnage exacted on Kiwi owners. Barney McDonald talks to campaigner and host John Gray.

This show now available online (in five parts), part one with links to 2-5, at:



John Green, Director of the Building Disputes Tribunal appears in and provides commentary on the leaky building crisis in 'A Rotten Shame'. John Gray (of HOBANZ) presents this compelling and shocking documentary, investigating the leaky building disaster in New Zealand.

A Rotten Shame on Vimeo

[anski]

Specialists in leaky-building litigation have raised difficulties with the Government's $1 billion financial assistance package announced last week.

Paul Grimshaw, founding partner at Grimshaw & Co, is sceptical about whether victims will get much help from the 50:25:25 scheme where homeowners, the state and councils fund repairs.

"It remains to be seen as to how many owners will qualify for the package. Apartment owners are unlikely to because in most bodies corporate at least 75 per cent agreement is required and it will be difficult to get that kind of agreement to the Government package.

"It is also disappointing that those owners who are outside the 10-year period will not qualify for government assistance.

"I suspect most owners will continue through the courts to recover 100 per cent," Grimshaw said.

But Building and Construction Minister Maurice Williamson says now that all parties have agreed to the package, more leaky homes will be fixed instead of homeowners spending thousands in costly litigation.


"I am proud that this Government has been able to deliver owners of leaky homes a positive, alternative way of getting their home fixed so they can move on with their lives," he said last week.

Tim Rainey of Rainey Law welcomed the package, which he said was good but not quite in the way the Government intended.

"It is certainly good news for the many homeowners who have kept their eyes firmly closed to the possibility that they may own a leaky home. The fear of being left totally on your own with no options is now gone.

"Affected homeowners are guaranteed some help as long as they bring their claim within the 10 years."

He said any homeowner or body corporate built after July 29, 2001 - 10 years before this scheme - should apply for an assessor's report, whether they think their home is leaky or not.

"It is also good news for anyone who has an existing claim which has not been settled or adjudicated. The scheme allows those homeowners and councils to tap into a significant source of money which should make it easier to negotiate a settlement of claims.

"I do not think that in most instances the scheme will be used as an alternative to litigation because it leaves too much for the homeowners to pay to have their leaky home repaired.

"But it does not have to be used as an alternative because you can, if it is done carefully, pursue both litigation and the scheme at the same time."

The scheme would result in more potentially leaky homes being identified and repaired.

"That will probably see more legal claims in the short term because it makes sense to at least see if a better deal than 25 per cent or 50 per cent can be obtained by negotiation," Rainey said.

Gareth Lewis, a partner at Grimshaw & Co, criticised the new scheme for being too complicated. "A significant amount of work is required to identify whether any particular homeowner is eligible. It requires that homeowners sign lengthy contracts with the Government in which they give up significant rights.

"We advise homeowners not to sign these agreements without taking legal advice. ... There are many fish hooks in the scheme for homeowners.

"The option of claiming through the courts is a lot simpler. It allows the homeowner to claim for the full cost of repairs together with consequential losses and general damages for distress. The option of claiming through court also provides more flexibility to the homeowner in that they have a choice as to what they do with the money recovered.

"Unfortunately, the new package is not available to homeowners who cannot obtain bank funding for their 50 per cent contribution," Lewis said.

Structural engineer John Scarry said: "The Government, and hence taxpayer, should be paying for the repairs, and then the Government should sue liable materials suppliers and others for billions.

"Much mention has been made of the $1 billion cost to the Government of this aid package, but there is no cost. Getting off with only 25 per cent of repair costs for just some of the affected houses, by the time GST at 15 per cent is considered, plus the PAYE tax on the workers, and supplier and contractor taxes on profits are paid, the Government will be showing a profit."




Experts pick holes in leaky building deal - National - NZ Herald News

[Song_Si]

just my opinion, but I think any of these places that are 'officially' leaky should not be allowed to be sold.

It's cheap - but leaky
By Celeste Gorrell Anstiss
5:30 AM Sunday Aug 7, 2011


With an asking price of just $50,000, this New Lynn apartment could be Auckland's cheapest property.

The one-bedroom residence comes with a car park, shared outdoor pool, bbq area, gym and sauna. It is close to public transport and schools, and has happy tenants who are happy to stay on and keep paying rent.

But if you think it sounds too good to be true, it probably is.

The advertisement bluntly describes the property as an "opportunity for the brave".

Ray White estate agent Damian Piggin confirms No 10 Crown Place is a leaky building - and a lengthy court battle lies ahead. The body corporate wants to sue Auckland Council for the full cost of repairs. Piggin estimates the case could drag on for three years.

Property lawyer Tony Steindle said prospective buyers should not count on court settlements, because council sometimes were not bound to pay people who knowingly bought a problem property.

"A conservative investor wouldn't factor in a windfall," he said.

Steindle added prospective buyers should get their hands on builders' reports, quotes and the minutes from body corporate meetings and watch for red flags such as disputes between the owners and questions over the cost of the repairs.

Best case scenario, the repairs could be completed quickly and the apartment could be sell at a profit in a few years, Steindle said. "I've seen people do it, but it's not for the faint hearted."

Piggin said identical apartments in the block were selling for around $180,000 before the structural issues were discovered.

A few weeks ago, one sold for just $50,000 after nine months of the market.

He said there was a huge potential for a risk-savvy buyer to profit in the long run.

"It's highly probably the council will lose," Piggin said. "It's always a hard one, though - these buildings end up with a bit of stigma."

[anski]

I was saved from buying a potentially leaky home after the New Zealand Herald published an article back in May 2001, at the time I was visiting New Zealand with the intention of buying a home in Auckland.

I am so grateful I was made aware of the situation & it saved me from making the most expensive mistake of my life.

Prior to reading the article I had intended buying a modern Mediterranean style plaster clad home. Fortunately I was sensible & purchased a brick home built in 1931.

However all those poor souls that bought new homes during these years found to their dismay at a later date that their houses had watertight issues, not all homes were effected buy many were.
Nowadays buyers avoid them like the plague unless they can buy them at a significantly discounted price & have deep pockets & no fear of the unknown.

This article appeared in the NZ Herald today just highlighting the government has set aside $11 billion (let us not for a moment forget that this money is coming from all of us paying housing rates & income tax)
The irony is that if you & I have houses that are not leaky but requiring repairs we have to foot the bill ourselves.

The Government has paid more than $2.2 million to consultants to set up its leaky homes financial assistance package - a scheme that has paid out only twice in its first seven months.

Anyway I will let you read the article yourselves & feel free to discuss it


$2.2m paid to consultants to settle two leaky home claims - National - NZ Herald News

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