Leaky-housing horrors put focus on standards

By ANDREW LAXON and CATHERINE MASTERS

The leaky-housing crisis could force builders to meet higher standards through registration or compulsory insurance.

A building industry committee, set up last year by the Building Research Association of New Zealand to deal with the problem, is considering both ideas to raise standards.

Poor workmanship by builders has been blamed for leaks and rot in houses built in the past decade. Other factors include design changes away from eaves and pitched roofs, lack of space inside walls for rainwater to drain away and a switch since 1996 to untreated timber, which rots faster.

A Weekend Herald investigation showed one new house in 10 may be vulnerable, some having serious leaks and rotting timber frames.

A $1 billion repair bill is predicted, as is a health threat from toxic mould thriving in the damp.

The weathertight buildings steering group's chairman, Adrian Bennett, said the group was looking at registration - which would force builders to meet certain industry standards - or compulsory insurance for builders, to protect homeowners.

However, both could also cause problems for the industry and its clients.

Registration would probably cut the number of builders available.

There would be arguments about which standards builders should meet, and at what level, to earn the right to be registered.

Under current law, anyone can set up as a builder and there are no minimum standards for the building profession.

Mr Bennett said attempts at compulsory insurance had struggled in Australia, where insurers seemed reluctant to provide cover.

Dr Bill Porteous, chief executive of the Government-appointed Building Industry Association, said it was unproven that either option would help because many factors were possible contributors.

"For instance, do you pick out territorial authorities and say they're not inspecting properly and that's how these things happen, or the builders because they're not building it properly?"

It might be that building materials were not satisfactory, or installation instructions were unclear, or that other countries' designs became inappropriate in wet and windy New Zealand.

Or, it was possible people instructing their designers or builders were not being as wise as they might be because of their budget, Dr Porteous said.

The association had set up an independent overview group to look at the issues "from every angle" but an interim report was not expected for several months, he said.

The Consumers Institute chief executive, David Russell, said the institute had no idea of the scope of the problem. But the issue of who paid for repairs could become "very interesting", with bills of possibly between $30,000 and $50,000 a house.

The certifier of a house, sometimes the local authority and sometimes the builder, had a 10-year liability for its structural integrity, Mr Russell said.

Insurance companies might have underwritten a certifier but if the certifier had gone out of business or did not have the money to pay, the insurance company might find itself up for the bill.

Household policies covered only unexpected events, not gradual deterioration, so people could end up in "deep trouble" with debt, he said.

The other problem was the resale value of the houses. People would look carefully at the watertightness of houses with a Mediterranean plaster finish.

"And the more expensive the house, the more nooks and crannies it has, the more designed it is, the more likely you are to have problems," Mr Russell said.

The Acting Minister of Consumer Affairs, Jim Anderton, said yesterday, through a spokesman, that he was promoting an amendment to the Fair Trading Act which should help consumers by giving them three years from when they discover they have been misled to raise breaches under the act.

"Until the bill that was passed last year, a claim could only be raised within three years of the representation being made. This is important for the supply of many goods associated with buildings because problems may only arise over time."

The changes will not be retrospective.

* If you have information on leaking buildings, contact us by email (newsdesk@nzherald.co.nz or fax (09-373-6421).