The Sting in the Tail of the Leaky Building Crisis: Cover-up Repairs and Vendor Warranty Issues

Recent investigations of properties that have changed hands as a result of recent growth in the property market reveals a nasty sting in the tail of the leaky building crisis that may catch out a number of homeowners – both vendors and purchasers.

While the number of ‘leaky homes’ that remain within the relevant limitation periods for claims in relation to the original building work dwindles, we have seen an uptick in disputes arising out of cover-up repairs and/or issues with vendor warranties in sale and purchase agreements.

Recently, we have seen an increase in the number of homes which are being sold with no disclosure of weathertightness issues or having been the subject of ‘maintenance’ prior to sale, in an attempt to disguise any issues from prospective purchasers. This applies equally to buildings which we would describe as ‘typical’ leaky buildings and buildings which may appear to be more traditional in their design and construction but have nonetheless experienced weathertightness or other issues.

If care is not taken with these homes, the result can be a long and expensive litigation process for all involved. For homeowners, some practical steps can be taken to avoid getting dragged into litigation.

  1. When in doubt, get a Building Consent.

The Building Code (Schedule 1) permits certain works to be undertaken without a Building Consent, including repair and maintenance provided that comparable products are used. However, if there is any evidence of building components failing to meet durability requirements of the Building Code, a Building Consent will be required. As a consequence, the majority of works carried out to repair known issues (including weathertightness issues) will require a Building Consent.

Obtaining a Building Consent for works relating to weathertightness or durability issues can save significant headaches at a later date. Allegations of breach of vendor warranties for failure to obtain a Building Consent are becoming more common and are costly to resolve. From a building surveying point of view, these disputes typically end up requiring reasonably extensive destructive testing, forensic analysis, reporting and preparation of evidence, and could often be avoided if the vendor had taken care.

  1. Get legal advice.

Statements made in the course of sale of a property can come back to bite vendors at a later date.  We have been involved in a number of claims which involve allegations of misrepresentation as to the condition of the property. If you have any concerns about the condition of your property, we always recommend taking legal advice as to the relevant disclosures that should be made. Working with your lawyer to understand what you should or should not say, in conjunction with technical advice, can help protect you as a vendor. We are able to recommend lawyers with experience in this area, or if you are on the other side and are concerned about the conduct of a vendor, we can equally assist with recommending lawyers who have experience in that area.

If you have any questions related to weathertightness issues, whether a consent is required for remedial works, or about the condition of your property generally, please reach out to us.

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