Leaky apartment nightmare could cost owners $20m

The repair claim of the Hobson Gardens owners relates mainly to water penetration through the cladding. Photo / Brett Phibbs

Defects at the huge Hobson Gardens apartment block in Auckland could cost up to $20 million to fix, making it one of the country's most expensive leaky blocks.

Residents facing the repair bill for the two-tower, 97-unit block in Hobson St are rallying to bring a massive law suit against those involved in putting up their apartments.

"The estimated $14.5 million repair work figure was determined by a professional quantity surveying company but it is not a definitive cost, and tender costs could reach $20 million," body corporate minutes informed residents.

So they engaged Mark Williams, of leaky building consultants Prendos, and specialist lawyers Matt Josephson and Peri Hoskins, of Grimshaw & Co, to take on their battle.

The owners say they will have to spend about $1 million by the time their case reaches the High Court at Auckland and a further $1 million if it goes to a full four-month hearing.

Mainzeal Construction, which put up the block, and architects Archimedia, which designed it, are two of the residents' targets, with the Auckland City Council, for issuing code compliance certificates stating the building complied with the law when it was finished about 12 years ago.

Peter Gomm, Mainzeal's chief executive, said his firm had held discussions with Hobson Gardens' owners, but the scope of the repair had not yet been ascertained.

"We take the issues very responsibly and we're trying to get it sorted. We're trying to keep it at a very professional relationship," Mr Gomm said.

Apartment owners initially considered calling Mainzeal back to the site to fix the block, but decided the risk was too high.

Residents at a body corporate meeting said, "A question was asked if Mainzeal could be requested to provide a tender for the work.

"However this was considered as unwise. Mainzeal took shortcuts during the original construction and there was no certainty they would not do the same thing during remedials."

Paul Grimshaw, Grimshaw & Co partner, said the case was certainly one of New Zealand's largest. "The proceedings are directed towards the key parties involved in the construction of Hobson Gardens - the builder, architect, council and project manager.

"The law in this area is clear. All these parties owe duties to the owners to ensure the apartments are constructed in accordance with due care and skill so as to comply with the provisions of the Building Code."

Proceedings have also been issued against project managers Carson Group. Asian developer New Bay, which later became First Concept, is no longer trading but is named in the action. Mr Hoskins said the company had not taken active steps to maintain itself on the Companies Office register.

The claim relates mainly to water penetration through the cladding.

A four-month court action has been allocated but no date yet set. The case is expected to be heard next year unless settlement is reached, although Mr Hoskins said no mediation dates had been set and he believed the case would go to court.

The twin-tower cladding has to be removed and a new, waterproof, system installed, he said. Expansion and contraction of roofing materials because of changes in temperature meant this had to be fixed, and all windows had to be removed from the blocks and replaced.

* Major leaky cases:

Farnham Terraces, Parnell: $15 million to repair.

Nautilus, Orewa: Could be up to $19 million to fix.

Sacramento, Botany Downs: Claimed $19.2 million.

Hobson Gardens, Hobson St: Up to $20 million.