Developer faces mass lawsuit

By ANDREW LAXON

New Zealand's biggest terraced housing developer is facing a multi-million-dollar lawsuit and repairs to more than 350 homes in the most far-reaching case of leaky building syndrome to date.

The Weekend Herald has learned that more than 150 owners at the $30 million Sacramento development in Botany Downs are preparing to sue Taradale Developments for faults which include leaks throughout the site and rotting stairs with mushroom-sprouting mould.

Homeowners at three other Taradale sites in Auckland and on the North Shore are calling for investigations into previously unreported leaks which experts fear may turn out to be as bad as Sacramento's.

Auckland Mayor John Banks warned yesterday that all ratepayers could end up paying for "Flash Freds and jerry-built developments", as the councils which approved them were dragged into costly legal disputes.

The latest revelations come as thousands of worried homeowners and an equally nervous building industry wait for the findings of an independent inquiry next week.

The 40-page report for the Building Industry Authority, due to be made public on Tuesday, is expected to confirm an interim finding in May that New Zealand faces "a major systemic breakdown" in the building industry unless action is taken fast.

Two major changes to the Building Code - a compulsory water-draining cavity inside outer walls and a return to greater use of chemically treated timber, which is more resistant to rot - are being considered.

Experts have already estimated that one in 10 new homes is at risk of rotting and the repair bill could easily top $1 billion.

This week the founding director of leading leak investigation firm Prendos, Greg O'Sullivan, told the Weekend Herald that his firm alone was dealing with about 2000 apartment units at 21 sites nationwide.

The second-biggest firm, Alexander & Co, previously said it was dealing with more than 500 units on almost 50 sites.

In the past week the Herald has established that some of Auckland's biggest and newest developments are leaking and starting to rot.

Eden Two, a 97-apartment site in Mt Eden, has rotting balconies after only 18 months, and more than 100 residents at the leaking Silverfield Terraces site in St Lukes might have to leave their homes if repair workers discover toxic mould inside the walls. Both sites were developed by the Redwood Group.

Today the Weekend Herald can reveal that Taradale, which describes itself as the country's largest developer of terrace and condominium-style housing, has major problems.

A report prepared in April for 153 owners at its flagship Sacramento development shows extensive leaks, breaches of the Building Code and an overall failure of the exterior cladding system and design details. Advanced decay is established in the exterior staircases and is likely in many other walls and decks.

The report warns that the staircases must be repaired urgently before they rot through and collapse.

But residents and industry sources familiar with Sacramento said Taradale had not repaired the stairs because it was arguing with builders about who was responsible.

Owners are now finalising a legal claim for damages against Taradale by having experts strip out walls in selected units to determine the extent of the damage - and the size of their claim.

No estimates have been made, but based on a typical $30,000-a-unit repair bill, the claim could easily reach $5 million.

At other sites:

* A report prepared for owners at the Grange in Albany - Taradale's second-biggest development with 105 units - reveals widespread leaks and the start of rot caused by cracks and poor design. The body corporate has resolved to seek legal advice.

* Owners at the three-year-old, 61-unit Vista Rosa site in Mt Albert are preparing to chip in more than $300 each for an expert report, after two rotting walls had to be replaced and the toxic mould stachybotris was discovered.

* Residents at the 44-apartment Norfolk Pines development in Albany are calling for a second report, based on problems at Sacramento and the neighbouring Grange site, after a first visual inspection found leaking decks requiring $13,000 of repairs.

Yesterday the head of Taradale, Tim Manning, said he was "totally gutted" by the widespread leaks at his developments across Auckland.

"We used top architects and top builders. I'm not quite sure how we've got to this."

Asked about the urgent repairs to the staircases, he said he was sure that if human safety was involved, they would have been fixed.

How the rot set in

* In April the Weekend Herald reveals the extent of the problem across thousands of new homes.

* Leaks uncovered in developments at Botany Downs, Grey Lynn, Mt Albert and Wellington.

* A Building Industry Authority interim report predicts "a major systemic breakdown" if the industry does not act.

* In August, the Herald reports the Quest apartment-tower faces an $800,000 leak-repair bill.

* The building authority warns people could be killed or injured because of rotting balconies.

* This week the Herald found the 18-month old Eden Two development has rotting balconies.

* More than 100 residents at Silverfield Terraces in St Lukes might have to move if repairs find toxic mould.

* Today the Weekend Herald reports one leak-investigating firm alone is checking more than 2000 apartments nationwide.


* If you have information about leaking buildings,
email the Herald or fax (09) 373-6421.

Further reading
Feature: Leaky buildings

Related links