Du Val Group problems: Owners of Lakewood Plaza units pay millions after water mains burst

Owners of apartments in Manukau’s 17-level Lakewood Plaza, managed and partly developed by Du Val entities, are paying millions to fix water damage after the mains burst on an upper floor three years ago.

The final and fourth instalment is due next Thursday after multi-million dollar repairs following the November 14, 2021 disaster when water cascaded through the building from the level 11 burst mains, forcing hundreds or people to be evacuated.

Last Friday, Du Val group was placed in receivership and management after the Financial Markets Authority went to the High Court to have PwC appointed.

“It’s been devastating. Where’s the insurance? We thought that would cover this sort of accident,” said one upset Lakewood Plaza owner whose tenanted place was vacant for months for repairs to flooded fittings, floor coverings and walls.

He acknowledged Du Val as the block’s managers had paid 80% of his rent for the months his unit near the ground remained empty but said being asked to pay for repairs left him angry.

Owners were asked to pay for the “flood restoration project” at the block where repairs were estimated in a June 2023 Excel spreadsheet to take 33 months and cost $11,414,000 although an owner said the total levy was $3m.

Minutes from an extraordinary body corporate general meeting last October 2, issued by Strata Title Administration, put the sum at $3.4m to be collected last and this year in four instalments.

Another owner said he would pay $30,000 for repairs.

“The body corporate agreed to millions of dollars in repairs. It has been ridiculously expensive.”

Lakewood Plaza has around 500 residents in 151 units. Photo / Tom Dillane

Owners were told by the block’s body corporate that the party responsible for the fault - when identified - would pay.

One owner is convinced a court case will mean he gets his money back.

On August 5, Du Val told one owner its building facilities and property management team at Lakewood Plaza “still remains operational and is still managing your property to a high standard. Rent will continue to be receipted”.

Du Val, Downey Construction and others built the tower. But Du Val manages all apartments.

An April 9 written report from Commercial Services and Reports as agents for the Lakewood repair project described the extensive nature of work.

Photo / Tom Dillane

Floors had to be vacated as work progressed, according to the ‘water repairs project’ which went to the body corporate committee.

Works were then under way from levels three to seven, having progressed further up the building before that.

Bathroom demolition and repair, gib removal and replacement, gib stopping, bathroom tile replacement, shower waste works, internal painting, bathroom fit-outs, electrical, wardrobe doors and shelving replacement, carpet, stairwells, metal framing remediation, installation of new shower glass, bathroom mirrors and common area carpet tiles were listed.

John Mainwaring, committee chairman and owners’ representative on the block’s body corporate, issued an update in April which covered problems in the block.

Apartments were empty during repairs but owners continued to be charged management fees, he conceded.

Lakewood Plaza when it was under development.

“We acknowledge concerns from some owners about DPM’s management fees on vacant apartments during flood restoration works. Despite raising this with DPM, we’ve been advised it’s outside the body corporate’s scope,” Mainwaring wrote to owners.

He also indicated the hope owners would get millions back: “In the past month, our flood restoration project has seen considerable progress across multiple fronts. A highlight has been the promising advancements in our legal approach aimed at future cost recovery,” he wrote.

Instead of the final levy being charged on July 1 this year, that had been delayed “offering everyone a little more breathing room”.

Some windows in the relatively new tower block have defects: “We have had reports of up to 16 apartments experience water ingress through the window joinery during severe major weather events,” he also wrote.

The flood recovery bill might continue: “Please be mindful of the potential for additional special levies in the future ... Rest assured; all special levies collected will be included in our litigation efforts once they conclude. Our goal is to recoup these funds, though we must acknowledge that recovery is not guaranteed,” Mainwaring wrote.

A High Court decision in 2020 said the Lakewood Plaza Limited Partnership was formed to build and sell the 17-storey apartment building. Downey Management had 40%, Du Val Developments had 40% and Steelgrave Investments had the remaining 20%.

When the Herald asked Charlotte Clarke about damage in 2021, she said only a few units were affected, mainly on level 11.

Residents were evacuated from Lakewood Plaza in late 2021.

Some residents remained out of the new block days after Fire and Emergency New Zealand attended in 2021, the Herald reported that year.

Du Val said in a statement the building was covered by body corporate insurance, which covered the loss of rent.

Clarke said the building facilities management company was Du Val Portfolio Management. The Companies Office shows no company registered under that name.

Damage from the water was limited to a few apartments on the northern end of levels nine to 11, she said in 2021.

The rest of the building was largely unaffected, she said.

However, as matters unfolded levels throughout were affected.

Questions were yesterday put to Du Val’s Charlotte and Kenyon Clarke, Owen Culliney and John Dalzell about the damage, repairs and owners paying.

No response was received.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.