Experts fear it will take a tragedy before Government acts on leaky homes

Leaky homes loom as a potential tragedy waiting to happen, experts say.

It could take a deadly tragedy before the Government is finally pushed into treating New Zealand's leaky homes crisis seriously enough, experts say.

Leaky homes have already cost home owners hundreds of millions of dollars and driven some into suicides, marriage breakups, ill health and terrible stress.

Now a fresh crisis is looming because not enough are being repaired, University of Auckland property researcher Michael Rehm says.

Unrepaired homes ran the risk of collapse as moisture getting between the inside and outside walls potentially rotted out the structural interiors.

Yet homeowners were increasingly ignoring the risks because they feared the enormous repair costs, Rehm said.

Others likely didn't even know they had leaky houses as the damage festered out of sight.

"It will probably be an event where somebody's wall or a balcony collapses and someone gets hurt - probably a tenant in a leaky home," Rehm said.

"Then it sets off a chain reaction where the Government starts running around like a headless chicken trying to understand the real dangers."

Home owners were increasingly ignoring risks from leaky homes due to fear of the enormous repair costs. Photo / 123rf

Most alarmingly for Rehms, was that the true extent of the crisis remains unclear.

The most comprehensive study was now a decade old, with consultants PwC estimating in 2009 that up to 89,000 homes could be affected.

It forecast repairs to the highest risk homes could alone reach $11.3 billion.

Buildings at greatest risk were mostly built between the late 1980s and mid-2000s, using a plaster-style coating on their outer walls, commonly known as monolithic cladding.

Yet other building types were also susceptible.

Lacklustre building codes and dodgy building practices helped create the crisis, and successive Governments had taken steps to address the issue.

This included passing a Weathertight Homes Resolution Services Act to help leaky home owners in 2002 and 2006 and a Financial Assistance Package scheme that ran from 2011-2016.

Under the FAP scheme, home owners could claim 25 per cent of their repair costs in cases where their local council issued a code of compliance or was involved in inspecting the home.

The Ministry of Business, Innovation and Employment said claims for 12,815 properties had now been lodged and $163m in FAP payments approved.

This was helping home owners complete an estimated $653m in repairs.

Owners also had the option to sue councils, builders and others involved in their house's construction for bigger sums.

However, these options all came with a major catch.

Owners needed to officially report they had a leaky home problem within 10 years of their house's construction or code of compliance being issued.

If they realised they had a problem after 10 years had passed, they effectively "fall off a cliff", without chance to sue or seek financial help.

And spotting signs of a leaky home can be near impossible without expensive testing.

University lecturer Rehm bought a leaky townhouse despite teaching building construction at the time.

He and his partner had fallen in love with complex of 81 units after renting one for more than a year.

"I convinced myself that I would have seen something by then," Rehm said.

After buying, he joined the complex's body corporate committee.

"We collectively agreed: 'Well lets get a bit of a health check to see how things are going and make sure we don't own one of those leaky buildings you read about everybody else owning," he said.

The tests revealed the townhouses were leaky and - after a long saga - were repaired at a devastating financial cost, despite the help of FAP money.

Had the owners simply demolished the townhouses and rebuilt from the concrete slab up, it would have proven cheaper, Rehm said.

John Gray - who co-founded the Home Owners and Buyers Association in 2007 after also buying a leaky home - said his team were seeing more and more home owners caught out by the 10 year limitation.

Leaky homes advocate John Gray campaigning on the issue back in 2007. Photo / Doug Sherring

They had no choice but to foot the entire repair bill themselves.

Those who couldn't afford to pay faced the prospect of living in homes at increasing risk of "structural failure" and toxic mould.

Others were being tempted into breaking the law.

Gray had seen increasing numbers of leaky homes given "lipstick on the pig treatment" where they were illegally patched up without building consent by non-licensed builders and on-sold.

In some cases, body corporate committee members secretly commissioned illegal repair jobs on their buildings before selling out without disclosing this to buyers, he said.

This was in turn triggering a messy new round of legal claims.

MBIE said the Government and construction industry were "committed to transforming the sector" through a raft of tougher building standards, licencing requirements and faulty work penalties aimed at preventing a repeat crisis.

National Building and Construction spokesman Andrew Bayly said the Government hadn't taking the issue seriously or proposed innovative approaches to the problem.

Gray and Rehm backed measures to strengthen building standards, but said this wouldn't help owners with leaky homes older than 10 years.

Rehm would like to see the Government force owners of high risk properties to get leaky home tests done.

They could then be helped to pay for repairs by launching a generous new financial assistance package that didn't have a time limitation, he said.

Neither MBIE or Bayly would commit to a new financial package.

Yet without it, leaky homes were "a silent bomb waiting to go off", Rehm said.

THE LUCKY ONES

Retirees Meryle and Bruce Kenny lost money and suffered agonising stress because of their leaky Auckland home.

Retirees Bruce and Meryle Kenny in front of their beloved home that they had to have repaired. Photo / Michael Craig

"It was easily the toughest period of our life," Bruce told the Herald.

"Emotionally, it was hideous. I'm sure it had a telling effect on our health."

Yet the Kennys can likely be counted among the lucky ones.

The couple managed to repair their Meadowbank home and sell it earlier this month for "a good price" ahead of a move into a retirement village.

But things could have turned out very different had Auckland Council not phoned them in 2009.

Council staff rang to say the Kennys they had a monolithically clad home with no record of a code of compliance.

The Kennys were shocked. They loved their 1999-built home and had no idea it might be leaky.

The call then triggered a series of events that led the Kennys to contact John Gray at the Home Owners and Buyers Association.

Gray took a look at the Kenny's situation and found their home was one month away from crossing the 10 year limitation at which point they could no longer take legal action or seek finanical help.

The Kenny's registered they had a problem and effectively "stopped the clock". With Gray's help, they took Auckland Council to court and won a confidential payout.

By 2012, their home was repaired so well that Bruce joked it could float if tipped upside down and put in water.

He couldn't talk about the terms of their payout, but said homeowners didn't come out ahead financially.

The legal fees alone were "almost unrecoverable", while the Kennys had to move out of their house during the repairs.

Yet, without that Auckland Council phone call and John Gray's help, they 'would have been dead in the water".

"He single-handedly saved us from not being able to do anything with our house and having to live in something that was by and large worthless," Bruce said.