Leaky home – what you need to know

First home buyers beware. A leaky home can bankrupt you. As many as 42,000 homes in New Zealand built between 1994 and 2004/5 leak. Fixing them has driven some homeowners to bankruptcy.

What are leaky homes

First home buyers beware. A leaky home can bankrupt you. As many as 42,000 homes in New Zealand built between 1994 and 2004/5 leak. Fixing them has driven some homeowners to bankruptcy.

It all happened thanks to the Building Act, which for a decade allowed builders and others to self-regulate. Many were built with cladding that wasn’t watertight letting water seep into the framing, which from 1995 didn’t need to be treated. This was exacerbated by the construction of Mediterranean style homes which have flat roofs, minimal eaves and other features that make them less water resistant than traditional Kiwi weatherboard homes.

The big issues with leaky homes are:

a: the rotting of structural timbers, and

b: the growth of toxic moulds such as stachybotrys chartarum.

Balconies have collapsed thanks to the rotting timber and Kiwis who live in leaky homes have reported many adverse health effects, such as allergies, aggravation of respiratory problems, eye and skill irritation and other symptoms, as a result of breathing in mould.

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How to spot a leaky home

Despite their issues, leaky homes do exchange hands. If you do have the facts and know how much it will cost you to repair the home to current building standards, then a leaky home could be a way into a suburb that you couldn’t otherwise afford. Beware, however, that even once it’s repaired, the stigma can hang around and depress the property value.

If you’re house hunting read on; here are some tips on how to spot a leaky home.

Be suspicious

We hate to say it, but every home built between 1994 and 2004/5 is suspect and you must do your homework very well indeed. Ask yourself if you’re willing to take this on. If it all turns to custard can you afford to rebuild? Beware that even homes that have been “remediated” (fixed) aren’t above suspicion.

Ask the agent

By law real estate agents must disclose if they know a home is leaky or if they suspect it could be. If not, the agent can be disciplined by the Real Estate Agents Authority.

Be careful of buying privately

It’s much easier to take a case against a real estate agent than a private seller. If you’re buying a home privately that was built in the leaky home era you take your financial future into your hands.

Always get a building inspection

Never, ever, consider buying a house of this age without getting a professional inspection. The damage is often hidden. We know it’s hard if you’re going to buy at auction to keep shelling out for inspections. But some leaky homes cost hundreds of thousands of dollars to fix and could ruin your physical and mental health.

Choose your inspector wisely

Be very careful when choosing your professional to do the inspection. Anyone can hang up their shekel in New Zealand and offer building inspections. In the case of the leaky home era, be willing to pay more to get a report from a professional who is a member of the Royal Institution of Chartered Surveyors (RICS), or New Zealand Institute of Building Surveyors (NZIBS) and has professional indemnity insurance. Don’t take short cuts and beware of other organisations with lower entry standards .What’s more, make sure as well that the report you have chosen includes invasive specialist moisture testing.

Get a LIM (land information memorandum) report and inspect the local council file

Ask a lawyer to inspect the LIM and council file before you make an offer. Homes that have been subject to Weathertight Homes Tribunal claims should be noted on the LIM. Beware, however that cases that have gone through other courts don’t need to be identified on the LIM. We know it costs lots if you have to pay for LIMs over and over again. However your home is the most expensive purchase you’ll ever make and mistakes can be costly.

Read the body corporate minutes

If you’re buying a home that is subject to a body corporate, you need to read all of the minutes right back to the beginning. Make the approval of the minutes by you and your solicitor a condition of the sale and purchase agreement. If the body corporate won’t give you a copy of the minutes, or they’re not very detailed, be careful.

Go door knocking

Knock on the door of the home if there are tenants living there, or at neighbouring properties and ask questions. Has there been any remediation work done on the home, and is there a problem with mould? The answers will help to fill in the picture. It costs nothing to ask.

Apartments leak too

Many of Auckland’s apartment buildings have leaky roofs, cladding that needs replacing and potentially damaged balconies.

What if you’ve bought a leaky home?

Finally, if all goes wrong complain. If you’ve bought a leaky home and you think you were misled by the real estate agent or given a substandard building inspection, then it is possible to get some money back by making a complaint. Real estate agents must be registered with the Real Estate Agents Authority and they can be fined for misdeeds.

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