KEY POINTS:
Leading leaky building consultants have hit back at a Consumers' Institute report that strongly criticised their contracts and price estimates.
The institute evaluated four firms that specialise in providing advice to homeowners whose places are suffering weathertightness issues.
It raised questions about the contracts and work of the
specialists Prendos, CoveKinloch Consulting, Babbage Consultants and Alexander & Co.
Three of the four firms said the institute was wrong and defended their work. Only Alexander & Co was happy - so delighted that it sent the article to clients to promote its business.
The institute was unimpressed with three of the consultants.
"We think three of them - Prendos, CoveKinloch and Babbage - breach the Consumer Guarantees Act in various ways," the institute reported in the August edition of Consumer magazine.
Alexander & Co provided a written contract that acknowledged the provisions of the act, it said, but it was the only one that did.
Phillip O'Sullivan of Prendos said two-thirds of repair costs were for fixed items like scaffolding, tarpaulins, cladding removal and replacement.
But it was difficult to assess other aspects of the job. A fixed price for repair estimates was impossible and final costs did vary.
The Prendos contracts had standard contract conditions and the firm's fees were on a par with the rest of the industry.
Ted Armitage, operations manager at CoveKinloch, said his firm's contracts did not break the law, charges were in keeping with standard rates and firm cost estimates were given, prepared by an independent quantity surveyor.
Phil Grigg of Babbage said the Consumer article was both unfair and untrue. Lawyers said Babbage was not breaching any act, he said.
Nor did Babbage charge anywhere near $250 an hour for consultants. Price estimates were difficult because consultants did not know what they might discover behind walls.
Consumer accused the firms of attempting to limit the liability by saying the work was commercial, not residential and therefore outside the scope of the act. Because the contracts covered residential buildings, they were covered by the act, the institute said.
This aspect was a potential breach of the Fair Trading Act, which prohibited false or misleading representation on conditions, warranties, guarantees, rights or remedies, the institute said.
Prendos and Babbage said providing a guarantee would jeopardise their professional indemnity insurance so the institute went to Canterbury University law professor Duncan Webb who said companies might not be able to get cover for liability under the act and would have to meet these costs themselves.
The institute said: "So while they don't have to give a specific guarantee, these leaky-home experts are still required by the act to stand behind the quality of their remedial design work."
Some experts charged up to $250 an hour for senior staff, the institute report said, while another charged $100 an hour.
People should check leaky-home experts' contracts with a lawyer before they signed them. They should also get prices for the best- and worst-case scenarios on fixing their places.
But the biggest single criticism of leaky home experts was what the institute called the estimating trap.
"We've seen an example where the accepted tender for a building repair was more than double what it was estimated to cost. The experts should make it clear that there were significant uncertainties about costs, it said.
But it was much easier if leaky home victims fixed their places before making any legal claim. "That way, you can claim for the full cost of repairs" and all consequential costs.
CONSUMER GUIDANCE
The institute recommends:
* Fix your place first, then seek compensation.
* Get a lawyer to check any experts' contract.
* Get a quality assurance plan from the experts.
* Beware of the "estimating trap" on repairs.
