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Bargains can lure buyers into leaky home morass


House and apartment buyers are unwittingly stumbling into the leaky building disaster, tempted by cheap properties with serious hidden defects.

John Gray, of the Homeowners and Buyers Association in Auckland, said he had just helped a solo mother escape from a deal to buy an Auckland place which needed $80,000 of remedial work, a sum she could never have afforded.

She was oblivious to the dangerous problems hidden behind walls, Mr Gray said, until his organisation stepped in.

He blamed real estate agents and vendors for lying and not telling prospective buyers about leaks.

"We are seeing some very sad stories of people being duped into buying a leaky or defective home," he said.

His organisation was taking a stand to protect unsuspecting buyers.

"The vendors and agents are relying on the caveat emptor [buyer beware] proposition.

"Unfortunately many people don't know what to ask and even if they do ask, they are not getting answers in writing."

But Bryan Thomson, head of Harcourts, said agents were upfront about problems if they were made aware of them.. But not all vendors told agents about leak issues.

"As part of our listing process, our sales consultant completes a full listing document that details all available information regarding the property," Mr Thomson said.

The seller was asked for all information on the property. If the building leaked and the seller told the agent, Harcourts must tell buyers. But if the seller withheld the information and it was not on official council files, then Harcourts had no way of finding out.

Buyers could get a building inspection report and many did, he said.

Harcourts had ongoing training for consultants, educating them about their duty of care to buyers and the importance of disclosure of any information which affected a buyer's decision, he said.

Mr Gray said many cheap houses and apartments were on the market, and buyers keen to find bargains were unwittingly drawn into the trap.

But people needed to be aware of the risks of buying such a place, and he warned against trusting vendors or their agents to tell them the full story.

Mr Gray said some people had unknowingly bought into apartment complexes with a pending remedial works project pending that could cost them more than $100,000 as their share of the price. This was enforceable by the body corporate, so they would have to pay or lose their new home or investment property. His organisation is working with more than 3000 owners of leaky homes, providing support and guidance on remedial and claims processes.

Most had had their lives destroyed by what Mr Gray called a blight on our housing stock. Many people could not afford to repair or take their claims through either the courts or the Weathertight Homes Tribunal.

Many buyers had no hope of getting government help because the houses or alterations were outside the 10-year statutory limitation, he said.

Other people were buying places which had been certified by private businesses which had gone into liquidation - like the developers and builders of the properties. "This problem won't go away for a very long time and it is striking deep at the heart of people's security, health and welfare with far-reaching social and economic effects," Mr Gray said.

"Lending for leaky building repairs is also drying up because money is harder to get."

Some owners were suffering the double-whammy of having to pay floating interest and then being unable to borrow for repairs, Mr Gray said.

The Department of Building and Housing warns buyers to ask vendors if there have been any leaks or weathertightness related problems and whether a claim has been lodged with the Weathertight Homes Resolution Service.

Check list

Department of Building and Housing warning signs checklist:

* Wall claddings which touch the ground.
* Recessed windows.
* Roofs with narrow or no eaves.
* More than one storey.
* Solid balustrades or complex roof design.
* Roofs which intersect walls.
* Decks and balconies jutting out from walls.
* Enclosed or concealed gutters.
* Inadequate sub-floor ventilation for timber floors.

- More information at www.dbh.govt.nz



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