Lessons our builders should have learned

By ANDREW LAXON

Imagine finding out that you're pregnant one week, and that you're being assessed $15,000 for your leaky condo the next. Imagine sitting beside your premature baby's incubator six months later, watching him fighting to breathe, and thinking that things couldn't get much worse. Imagine then going home to find your building has complete envelope (cladding) failure, and your individual special assessment is now up to $40,000.

Imagine, after weeks, finally bringing your now five-pound baby home, only to find that his crib and blankets have been soaked with water leaking through the ceiling. Imagine living with dusty, noisy construction for more than a year, and wondering how that has affected your baby, who's constantly woken by jackhammers and drills that make his crib shake.

Imagine having to call the emergency doctor to your house, in the middle of the night, for your sick baby, and him not being able to find your building because he thought nobody could possibly be living in such a war zone.

- Condominium owner Stephanie Henders, November 30, 1999.

When the Canadian province of British Columbia held an inquiry into its "leaky condo crisis" three years ago, stories like this poured out.

Homeowners told of stress, debt, family breakups, sickness, bankruptcy and even thoughts of suicide.

"Because of this disaster, we have had four owner bankruptcies to date, with the expectation that this is the tip of the iceberg," said owner Randy Young, whose strata (body corporate) faced a C$430,675 ($582,104) repair bill.

"Although we are proceeding with applications for second and third mortgages, most of us are in no position, financially, to take this hit. It isn't just the additional mortgage. We cannot sell our homes. For those of us with substantial equity in our homes, this asset has disappeared."

John Murphy told of pressure from fellow owners to keep quiet.

"I'm still getting flak for bringing my building out of the closet. Most other buildings have the same keep-it-secret mentality. They think that by keeping it quiet, they will save personal embarrassment, and somehow preserve their home property investment value."



Commissioner Dave Barrett agreed. In a thundering report, he called the leaky condo crisis "a human tragedy - a silent and prolonged disaster"in which homeowners had been betrayed.

"The consequences of this disaster are devastating and pervasive."

The Barrett commission estimated there were serious leaks in about 25 per cent of British Columbia's condominiums (multi-unit apartments or developments) built from 1980-99. Experts later estimated that more than half leaked, and one report put the problem rate as high as 90 per cent.

By March this year, condo values in British Columbia had plummeted by up to two-thirds and building consents were still less than half their previous level as public confidence collapsed.

Canada's experience is effectively the blueprint for New Zealand's leaky building crisis. When the building industry here belatedly woke up to the problem in March, it called in experts from Vancouver to lead a "weathertightness" conference in Auckland.

The Barrett reports (two inquiries were held in 1998 and 2000) were closely studied by the independent inquiry team under former State Services Commissioner Don Hunn.

The checklist of problems and consequences in both countries is alarmingly similar - widespread leaks in new, multi-unit, timber-framed buildings, caused by poor design and building practices which fail to allow for local weather (locals say it rains even more in Vancouver than in Auckland).

Both found the building failures have led to repair bills running into tens of thousands of dollars - sometimes hundreds of thousands - for each owner, followed by a merry-go-round of finger pointing within the building industry, lawsuits and calls for someone to be made accountable.

The Barrett inquiries also found that units showed signs of decay in as little as three years and buildings were being repaired twice for the same fault.

New Zealand is already experiencing the same problems.

Not all the factors at work in Canada apply here. Property values still seem unaffected, and demand for new apartments continues to grow as the housing boom still outranks buyers' concerns about leaks.

Financial problems in Canada were driven by the collapse of a widely used builder's guarantee scheme, which left many owners forced to pay C$35,000 ($47,000) in repairs with no way of finding the money. In New Zealand, most owners still expect the builder or developer to pay - although increasing numbers are forced into expensive legal action when this fails to happen.

And at this stage, New Zealand homeowners are even more wary than Canadians like John Murphy about speaking out in public. The Herald has talked to many homeowners who feel trapped in their leaking terraced homes and apartments but do not want to talk on the record - either to protect their property's value or for fear of the reaction from fellow owners.

The official inquiry was frustrated by this reluctance, which it saw as a huge obstacle. Hunn recommended a public inquiry, partly as a way to encourage those homeowners to come forward in a recognised public forum.

Internal Affairs Minister George Hawkins initially ruled out the idea but yesterday appeared to leave the possibility open.

While British Columbia remains the nearest direct comparison, there are many others in North America. A study in Seattle found that 20-25 per cent of multi-unit residential buildings had leak problems, with repair costs estimated at US$100 ($213) million.

Local insurance adjuster Mike Spengler emailed the Herald this week, estimating that the cost of claims for "water intrusion losses" would probably head into billions of dollars.

Although Seattle's problems were similar to British Columbia's, the city's moisture damage subcommittee has decided not to adopt the complicated rainscreening techniques used to solve the problem in Vancouver.

Local politicians reasoned that if buildings were keeping out water 75 per cent of the time, the system was working fairly well. Architects and builders who had problems with the other 25 per cent of buildings would probably struggle even more if confronted with a more technically demanding system.

A similar debate is going on in New Zealand as the Building Industry Authority investigates making Vancouver-style draining cavities compulsory. These essentially create a gap between the outer wall and timber framing to allow water to drain away, but some experts fear many builders will not apply them correctly.

The leaky buildings report notes that polystyrene-based "chilly bin claddings" - officially known as EIF (Exterior Insulation and Finish) systems - are effectively banned in Vancouver, North Carolina and Georgia, where they have been linked with extensive leak problems.

The widely used cladding has not been identified as a culprit in New Zealand, where blame has focused on the inability of workers to fit claddings properly rather than any weaknesses in the products themselves.

But in North Carolina, the claddings have been blamed for leaks in thousands of homes, leading to official investigations and a growing wave of legal action. Manufacturers maintain the product works if applied correctly, but many critics say it is flawed because there is no margin for error.

In the United States, the debate has already shifted from whether many new buildings leak - research suggests that 29 per cent do, 6 per cent of them seriously - to the consequences, known as "toxic mould syndrome".

The most famous case yet involves heiress Melinda Ballard, who in 1998 moved with her husband and son into a US$6.5 million ($14 million), 22-room mansion in Dripping Springs, Texas.

The house turned out to be severely infected with toxic mould, including the dangerous stachybotris, which is increasingly turning up in leaking New Zealand homes.

The family were eventually forced to leave. Ballard claimed the mould was responsible for her son's asthma and her husband's memory loss. In June last year a US court awarded the family US$32 million ($69 million)

The US insurance industry is now braced for billions of dollars of claims. Environmental crusader Erin Brockovich has filed her own lawsuit, claiming she and her family suffered health problems from mould in their home.

In New Zealand, experts believe toxic mould will become a major problem, but are reluctant to make predictions as so little is known about the fungus and its alleged health effects.

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

Further reading
Feature: Leaky buildings

Related links