John Banks hit the nail on the head - sorry about the unfortunate choice of words, but there's really no other way to put it - when he said tens of thousands of leaky-home owners are facing "great depression, sickness and almost certain bankruptcy".
As Mayor of Auckland, he knows that many everyday Kiwis have done so, already.
And that many, many more will unless John Key gets off his backside and shows some
However, when we look at the foundations of the leaky-home issue, Mr Banks isn't altogether squeaky-clean. But we'll come to that.
For the Prime Minister to see the proof of Mr Banks' comments, he only needs to step out of the front door of his Parnell mansion and walk down Gladstone Rd. He'll find some of the worst examples of leaky homes at the foot of the hill.
In fact, here's an offer: when Mr Key gets back from enjoying New Year at his (presumably weathertight) bach in Hawaii, I'm more than happy to meet him on The Strand and show him through a townhouse or two and let the residents tell him just what Mr Banks is on about.
Auckland's Mayor was speaking after talks between the country's local councils and the
Government fell over just before Christmas. The Government, represented by Building and Housing Minister Maurice Williamson, hung up the phone on the councils - and the homeowners. Let's see why.
The country's mayors (represented by Mr Banks and Wellington's Kerry Prendergast) believe homeowners should pay 50 per cent of repair costs for leaky homes, local councils 25 per cent and the Government 25 per cent.
The Government says homeowners who drop legal action (a major concession for many
thousands of folk who have been left - sorry again - high and dry by everyone from builders to building certifiers to timber companies, not to mention public authorities) would shoulder 64 per cent and councils 26 per cent.
The Government says it could chip in 10 per cent. It might also guarantee loans to ensure owners had access to funds at lower interest rates for those on small incomes and might let older folk pay the bill through their estate. Wow, how generous. You might have shuffled off, Granma, but the Government will still get its money.
Now, let's look at the size of the problem.
PricewaterhouseCoopers completed a report in July - curiously, Mr Williamson didn't release it until Christmas Eve - calculating repairs at $11.3 billion. It identified 42,000 severely affected dwellings, built from 1992-2008. It estimates 22,000 to 89,000 homes are affected.
The report suggests only around 3500 leaky homes have been repaired and around 9000 failures have now gone beyond the 10-year period of legal liability. For them, it's tough ... city.
Even Mr Williamson had to admit: "The PwC report shows the damage is much larger than anyone had previously wanted to acknowledge."
What led to this national disaster? Depends on who's pushing their barrow.
PricewaterhouseCooper's coy phrase is, "The leading causes of the crisis included ill-judged regulations in the 1990s and the use of untested materials and building techniques". We go into more detail below but in brief:

  • The 1991 Building Act reduced controls and standards (such as allowing the use of
    untreated timber and monolithic claddings) under the assumption that building quality would be mostly assured by market-driven forces.
  • In 1998 the standard for timber treatment was changed, allowing the use of untreated kiln-dried timber in wall framing. If this gets wet, the timber starts to rot. Steel framed buildings and treated timber can also be affected if they remain wet long enough. Some moulds that grow on damp timber and other materials can cause respiratory and skin problems.
  • In 2002 the Building Industry Authority (now the Department of Building and Housing) appointed an overview group. It identified the causes of leaky buildings and made many recommendations.

Major causes were modern cladding systems - you'll have seen them on Mediterranean-style buildings, usually textured wall surfaces made out of plaster on polystyrene or fibre cement sheet. These were often used outside their specifications or installed incorrectly.

Poor construction did not allow for water deflection, drying and drainage. Culprits included design features such as recessed windows, flat roofs with narrow or no eaves, solid balustrades, complex roof design, balconies jutting out from the walls and water penetration through the claddings.

And this was the 90s. As that report noted, the free market ruled. The mood was, the


Government shouldn't be poking its nose into what sort of wood or fibro builders wanted to use. Councils shouldn't be employing thousands of clipboard-carrying building inspectors. Signing off on drains and driveways could be contracted out to independent certifiers.

That, at least, was what the government of the day thought. The Bolger then the Shipley governments we're talking about. Whose cabinet ministers numbered, amongst others, John Banks and Maurice Williamson.

Independent certifiers to set up their businesses all over New Zealand with a paper standard but no practicable oversight of their work. Virtually none were insured against faulty, inadequate work, or similar shortcomings that would rebound on the homeowner, or the poor sucker who bought the house off the original homeowner some years later. In practice, the councils had to accept the certifiers' say-so - but it had no check, or control, or comeback on them. And nor did the homeowner.

Nor could the homeowner know that the certifier might have been a mate of the builder, or had passed dozens of potentially shonky buildings for the bloke.

Just like the forces which combined to create, in the title of the New Millennium movie,  A Perfect Storm.

Which is why, as Kerry Prendergast says, the Government is not shouldering enough of the burden. "The Government of the time changed the legislation that allowed different practices ... that allowed the use of untreated timber. They argue they don't have a legal liability; they certainly have a moral and ethical liability.

"We are talking about upwards of 90,000 New Zealanders living in homes that leak; we're talking about not just the psychological problem with that, but of course significant respiratory problems."

There have been a couple of attempts to set up tribunals to sort out the mess and get repairs made, but most experts - such as Prendos, the valuers and original whistleblowers, or the Light House Group of Auckland campaigner John Gray - confirm that, most often, it all ends in tears. The developer's gone bust. The builder or the certifier wasn't insured. It wasn't the architect's problem that they didn't put the downpipe where it was on the drawing. Fix it and then fight about it, they say - if you can afford it.


And no one wins apart from the lawyers. "If we could get rid of the liability issue it meant they didn't have to go through years of torture through the courts paying horrendous legal fees," Ms Prendergast concludes.

Mr Williamson falls back on the leaky old excuse: "The Government wasn't involved in the process. Local authorities were, as the consenting authority and those who issued code of compliance, and therefore they are being found liable ..."

No, Minister. The National Government, of which you were a Cabinet Minister, wrote the rules and made the councils play by them.

This Government is getting quite a track record for not being involved in the process.

The Local Government Minister doesn't think it's his job to get involved with writing the rules for Auckland's regional and local councils: that's for his appointees on the Auckland Transition Authority. The Land Information Minister doesn't want to decide how to spell Wanganui. Or is it Whanganui? Oh, that's right, he thinks it's both. And who is the Minister of Land Information? Good heavens, it's our forthright old mate, the Hon. Maurice Williamson.

So Mr Banks and Ms Prendergast may be hopeful of seeing the Prime Minister to plead the cases of thousands of New Zealand citizens who have lost, or are losing, their most important asset. Few would bank on any action or sympathy from the top of the Beehive or the top of Parnell.

Bank on it? Now there's an idea. If the cost of repairs is $11.3 billion, and the Government were to do the decent thing and divvy up a quarter of the cost, they could kickstart the fund with the $2.2 billion that the Aussie-owned banks had to cough up in back taxes just before Christmas. After all, where did a fair whack of those Kiwi profits came from?

So it's time for the Prime Minister to take a stroll down Gladstone Rd, talk to some leaky-home owners. And then give his minister Maurice Williamson a swift kick and an order to pick up the phone and call the mayors again.

Leaky Homes: what's all the fuss?


. Consumerbuild is a partnership between the Department of Building and Housing and Consumer NZ.

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.

The inquiry into the problem

In 2002 the Building Industry Authority (now the Department of Building and Housing)

appointed a Weathertightness Overview Group to investigate the weathertightness of buildings in New Zealand. The group visited a number of affected buildings and met with many representatives from different sectors of the building industry. In its final report,

(commonly known as the 'Hunn Report') it identified the causes of leaky buildings and made many recommendations.

Main factors in leaky buildings

No one factor was identified as the single cause of leaky buildings, but a number of causes were identified:

Modern cladding systems

. 'Mediterranean' style buildings using monolithic cladding systems, such as textured wall surfaces made out of plaster on polystyrene or fibre cement sheet, are promoted as providing a sealed and waterproof outer skin and being low maintenance. But often, they have been used outside their specifications or have been installed incorrectly.

Inadequate construction

that did not allow for deflection, drying and drainage or had insufficient durability and included features such as:

- recessed windows

- flat roofs with narrow or no eaves

- two or more storeys

- design features such as solid balustrades, complex roof design and envelope shapes where roofs frequently intersect with walls on upper floors

- balconies that jut out from the walls

- penetrations through the claddings.

Insufficient details

in the Approved Documents (these contain Acceptable Solutions), which are produced to help people meet the requirements of the New Zealand Building Code. A number of inadequacies were identified, particularly in Acceptable Solution B2/AS1 (about timber durability) and E2/AS1 External Moisture (keeping the weather out). These have since been amended. Problems with the administration of the Building Code by councils and building certifiers have also been identified.

Lack of technical knowledge and skills

when houses are designed, detailed and built - modern systems require a greater level of care and skill which has not always been applied.

Untreated kiln-dried framing timber

is susceptible to rot when moisture penetrates the building envelope.

The Building Industry Authority issued several public warnings reminding people of the dangers of unsafe balconies, decks and balustrades. For further information on warning signs and risk factors, see