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Avoid being caught out by leaks

By Richard Neave, Partner & Helen Smith, Associate

First published in The Press 28 March 2009

When looking to buy a building or home, the standard Agreement for Sale and Purchase used by real estate agents and solicitors contains no specific warranties by the owner in relation to water tightness and damage.  There are some practical steps, though, which any prospective buyer should follow to minimise the risk of purchasing a leaky building.

These are:

• Be aware of the potential for leaking and water damage in any building.  Although some designs and exterior cladding, such as modern plaster cladded buildings may be more susceptible to leaking than others, in reality no building is safe from the potential for leaking.  Check carefully for signs of leaking or water damage when inspecting a building.
• Ask the seller or salesperson acting on behalf of the seller whether the building has any history of leaking or moisture and whether a watertight assessment report has been done.
• Check the local Council records to see if there have been any building consents granted for work to remedy water leaking or damage.  If the answer is ‘yes,’ ensure that a code compliance certificate has been issued.  Also check that there have been consents granted and code compliance certificates issued for work, which you know or can see has been done on the building.    The lack of a consent or code compliance certificate means the work may not have been completed correctly.  A search of the Land Information Memorandum from the local authority will usually be done as part of the due diligence by your solicitor before you complete your purchase.
• Check to see if a claim has been lodged with the Weathertight Homes Resolution Services in respect of the property.
• If you are at all concerned about moisture, leaking or water damage, then commission an independent watertight assessment from a professional.  These tests can indicate the presence of dampness, which may confirm that remedial work is required and affect your decision to complete the purchase of the building. 
• If you already own a building or home and notice water damage or think that there may be leaking, you may have a claim against others for the damage and/or the cost of fixing the problem. There are a variety of options available including the Weathertight Homes Resolution Service (WHRS) for residential homes and the Court, Disputes Tribunal or private negotiation and mediation for all buildings. 

The first step is finding out what the problem is. If you lodge a claim with the WHRS, an independent assessor will provide a report. Whatever forum you choose, it is important that you get expert help to determine if there has been leaking, moisture or water damage to your building.

You may have a claim against the Council and/or those involved in building your house; for example, the builder, plasterer or designer. A previous owner may also be responsible, particularly if they sold the property knowing about a problem and positively concealed it from you. However, just because another party was involved in the construction of your home doesn’t automatically mean they are responsible for the cost of repairs. You will need to establish what each of these parties has done wrong and how this has caused the problem.

You don’t have to wait until a claim is resolved before starting repairs.  If you are able, it is often better to do the repairs early as this prevents further damage and limits the cost of repairs. The repairs will need to be carried out properly and you will need to keep invoices and receipts for all work done. An expert will be able to advise you on what repairs are required. You should also invite the parties involved in building your house to inspect the damage before and after the repairs. If this is not possible, take plenty of photographs of the affected areas. This will limit any argument about the cause of the problem and what was done to fix it.

If you do not or cannot repair your home before making a claim, you need to limit further damage as much as possible. Any temporary repairs must be carried out properly, otherwise you might end up being responsible for some of the costs.  It is also important that you maintain your home adequately as lack of maintenance can reduce the amount, which you can claim from other people. General maintenance, including painting and cleaning out of gutters and other areas, where moisture is common, will be important.

From a practical point of view, there are time limits in which you have to bring a claim. Your ability to claim or recover the cost of repairs might also depend on whether the other parties are still in business or financially sound.

Don’t turn a blind eye to signs of water damage or leaking. It pays to move quickly and take early advice if you suspect that there is a leaking or moisture problem in your building.

Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.

• Richard Neave is a partner specialising in commercial and property law and Helen Smith is an associate specialising in civil litigation and dispute resolution , at national and trans-Tasman law firm Duncan Cotterill.R.Neave@DuncanCotterill.com; www.DuncanCotterill.com