Two first-time buyers have picked up a three-bedroom house townhouse in the wealthy Auckland suburb of Devonport for an ultra-low price. The reason? The property was being sold for land value only.
The property on Seabreeze Road was built at the start of the leaky homes era and was offered to the market without warranties.
Harcourts agent Jane Hastings had pitched the property as a demolition opportunity, noting in the listing that buyers were getting a “free house” with the purchase of the land.
“We actually don’t know if it is leaky. No one’s done a building inspection, but it just looks like it is. As soon as you advertise a property [like this], people assume it’s leaky anyway.”
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The cloud hanging over the property clearly didn’t deter the buyers, a young couple who had only inspected the house the night before last week’s auction.
They ended up paying $850,000 after a tussle with another bidder.
Hastings said the couple had been looking at units in the same price bracket but were won over by the opportunities offered by the Seabreeze Road home. “The location is fabulous. They’re really happy because they bought themselves a house – one that they’ll slowly renovate,” Hastings told OneRoof.
“I think the husband is a builder [and] he’s going to do bits and pieces. He’s also got a cousin who is another builder who is going to help.”
She added: “The vendor lived in it happily for 23 years.”
The agent says the previous owner lived in the Devonport home happily for 23 years. Photo / Supplied
The good feelings surrounding Seabreeze Road are the exception when it comes to New Zealand’s lingering leaky home problem, with thousands of homeowners still dealing with the fallout from the building scandal.
John Tookey, a building industry expert and a professor at AUT’s School of Future Environments, told OneRoof leaky buildings could still be causing headaches in New Zealand 100 years after they were first built.
The first homes from the leaky homes era were built more than 30 years ago, and many still have weathertight issues. “You’re likely to see 50 years as a minimum until this starts to tail off,” said Tookey. “High end up to 100?”
The problem relates to certain homes built from 1991 when the Building Act was relaxed to allow homes to be designed without wall cavities. Defects in the design of monolithic clad homes over the following 14 years allowed water to penetrate the cladding, decks or window framing, creating underlying rot and mould. The passing of the 2004 Building Act was in response to the unfolding scandal.
While many of the affected homes have been remediated or demolished, some owners still have no idea what problems lie beneath the cladding of their homes. Other homes may have been remediated more than once, but have failed again, said Tookey. More and more will need demolishing as time goes on, he said.
“Leaky era” homes that have never been assessed or repaired may be most at risk. “If it has been leaking for at least the last 20 years, the damage that’s likely to have been done will be extensive and potentially progressive, and ultimately could compromise the structure,” he said.
Professor John Tookey: “You’re likely to see 50 years as a minimum until this starts to tail off.” Photo / Supplied
Surveyor Steve Alexander, who advises on building defects, has inspected leaky homes that are beyond redemption. “About two years ago I found a property that was so badly water damaged and with such widespread decay that it had to be demolished, retaining only the concrete floor and a retaining wall,” he said.
“This had remained undetected for a very long period of time because people had done cheap cosmetic remedial works making the house look nice on the surface.
“The unfortunate owners had bought this unaware of what lay under the surface. It had been progressively renovated and made to look pretty on the outside. And that’s what deceived the buyers.”
Alexander said leaky homes were “undoubtedly” still a problem. “Some people just have buried their heads and haven’t wanted to know about it. So they’ve just done nothing,” he said.
Both Alexander and Tookey noted that rising house prices and a push for urban density had given some of those affected a way out.
“The market has increased property prices quite a bit over the years, and so it becomes economical for somebody to demolish completely and redevelop the site,” Alexander said.
Remediation work on an apartment block in Auckland. The leaky buildings scandal engulfed thousands of homes, as well as some high-end developments. Photo / Brett Phibbs
Barrister Michael Thornton, who is a specialist in leaky building litigation, estimated there were around 80,000 homes that built been with weathertightness issues, of which 10,000 have been through a litigation process in court or the Weathertight Homes Tribunal to recover their losses.
“Even if those are really only ballpark figures, you start from a position that there must be a lot of properties that are currently affected that didn’t go through a litigation process either in the courts or the tribunal to recover money and therefore get fixed. So a long-winded way of saying there must still be a lot of properties that are affected,” said Thornton.
Failed remediation was an issue, he said. This is where owners have tried to patch up buildings early on, but those remediations have failed.
“We have seen failed remediations because the science of remediation has evolved. Early on in the leaky building problem, there was often a view that you could complete targeted repairs,” Thornton said.
“The industry came to realise you couldn’t do that. Or you’ve simply done it in a way that hasn’t fixed the underlying problem and it has failed again.”
Owners who go down the remediation route need to be careful about the work they do, said Thornton. “Where we see big problems is when owners have done limited remediation to properties, often without obtaining a building consent.”
If purchasers discover this, they can sue for breach of warranties. “The breach might amount to an ability for the purchaser to recover the cost of repairing the problem, which you would have incurred if you’d got a building consent in the first place.”
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