Many leaky apartments facing second lot of repairs

Lyn Gillingham.

Many owners of big apartment blocks are going through their second leaky building repair project, after the first fix-up failed.

Lyn Gillingham, chairwoman of the new Auckland branch of the Body Corporate Chair's Group, said a large number of those attending the inaugural meeting last Thursday evening were facing a second major repair.

"The topic of leaky buildings clearly resonated with those who came and we had people travelling from Tauranga, Orewa and Hamilton. The majority of chairs attending were either currently involved in, or had been through, a leaky building remedial process.

"An alarming number were going through it for a second time. Many questioned the role of councils and the fact that so many of the contracting parties they were dealing with could effectively hide behind limited liability provisions in their contracts," she said.

About 60 people attended.

Brian Duffy from Contrado Consulting said the building industry was in a boom phase and those going into remedial projects now were likely to have difficulty getting architects, contractors and sub-contractors. Prices were also likely to be higher than expected.

Gillingham said one common theme was how concerned building owners were to protect their investments, often at the expense of future owners, as they do not take action or seek appropriate advice when problems are first identified.

"Being labelled a leaker can be viewed as the kiss of death. The reality, however, is that failing to deal with issues earlier can result in far more expensive repairs further down the track," she said.

"The fact that leaky buildings are still being constructed, or remediation work is failing is also cause for alarm as many of these buildings and their owners do not qualify for the Government's Financial Assistance Package scheme."

Three of the major banks - Westpac, BNZ and ASB - have put in place an escrow arrangement which Michelle Hill of Kensington Swan discussed at last Thursday's meeting.

The escrow arrangement meant money was held by an approved agent such as a law firm, payments were strictly for remediation purposes and only made after tight certification procedures.

Owners paid interest on their loans but the money was held in an interest-bearing deposit account.

Gillingham said many people who attended were interested to hear more about that.

"This can alleviate the necessity for some owners to sell at heavily discounted prices as they cannot fund remedial contributions."