Test and check before buying a leaky house of horrors

Having a thermal inspection carried out on a home can help reveal the property's hidden secrets.

Your home purchase is meant to be the beginning of "happily ever after". But it can fast turn into a house of horrors for people who buy a leaky home, or choose a property that used to be a meth lab.

The best way to protect yourself is with solid independent research. Get a building report from an expert who belongs to an industry organisation. If the home has been tenanted or you're concerned about its past occupancy -- and you have a hunch something isn't right -- pay for a methamphetamine test. It should cost less than $150.

Weather-tightness and moisture testing with thermal imaging will cost more than $500, but can save you years of torment.

Get a land information memorandum (LIM) from the council and read the entire file, in case it shows up something unexpected. Make sure you understand your insurance cover.

Meth labs

Hundreds of properties in New Zealand are used by people making illegal drugs -- most of them in rented properties. If the police find out, they'll issue a Notification of Hazardous Chemicals Contamination and tell the local council, which in turn will usually issue a notice to clean the premises.

The fact that the property is contaminated will subsequently appear on the LIM. The property's value will be diminished and it may be impossible to ever overcome the stigma.

That's not the only problem with buying a meth-contaminated home. The clean-up to remove toxic gases from a house can cost from $10,000 to $50,000.

Unscrupulous owners may try to keep the problem quiet and on-sell the house in an "as is where is" condition, with no come-back. If the real estate agent knows about the contamination, however, they must tell the buyer.

This doesn't always happen, a case in point, the Real Estate Agents Authority (REAA) fined Ray White Henderson agent David Sharma in 2013 for failing to warn prospective buyers that a house he was marketing was contaminated. The buyers took their 2-year-old son into the home to view it. The REAA has also heard other cases of non-disclosure.

Some insurance companies cover decontamination, but only if it occurs when you own the home, not if you've bought it already contaminated -- and not if you were the meth cook.

Leaky homes

In the 1990s and early 2000s plaster houses were all the rage in New Zealand. The trouble was that bad designs, inappropriate materials and shoddy construction meant that many houses and other buildings built during this era began to leak.

More than 40,000 Kiwis bought leaky homes and many have lived to rue the day. If real estate agents are aware that a property they are marketing is one that could leak, they are required by law to tell the buyer.

Living in a leaky home can seriously affect your health. Toxic mould can grow inside the cavity of the house and cause irritated eyes, swollen faces, itchy throats, coughing, headaches, nausea and other symptoms. The cost of fixing the problem can run into hundreds of thousands of dollars.

There are a number of systems to test for leaky homes, which can include invasive tests to determine if the framing wood is treated.

Natural disasters

The other big horror for owners is natural disasters. Just ask homeowners in Canterbury -- many thousands are still waiting for payouts from insurance companies more than four years after putting in their claim.

The biggest worry is that you're not adequately covered by insurance. Since the Canterbury earthquakes most insurers no longer offer open-ended replacement insurance. Instead, homeowners must estimate the value of their homes and are covered for replacement up to and including that figure.

Temporary accommodation cover is also essential. This may cover you for six months to a year if you can't live in your own home during a rebuild. Many Christchurch homeowners found this time to be too short and have ended up paying rent at the same time as paying a mortgage and rates on the damaged property.