Everyone can help stop the rot

Independent experts confirm that leaks in new homes are a growing problem. ANDREW LAXON updates the leaky building crisis.

What is the leaky building problem?

Many new houses leak badly, and the water is rotting the untreated timber in their wooden frames. The problem seems to be worst in houses less than ten years old - some experts say five years, since builders were no longer required to use treated timber from that date.

It is also worse in multi-unit houses built to Mediterranean designs (flat roofs, no eaves) with walls made of one-piece materials such as stucco. This kind of housing - in developments ranging from about 10 units to well over 100 - is sprouting in Auckland as developers race to keep up with a building boom. Building repair experts say the problem has disturbing similarities with the so-called "leaky condo crisis" that devastated Vancouver and the province of British Columbia in Canada in the late 1990s.

How bad is it?

No one can be sure because the problem remains hidden by homeowners worried about selling the property, builders, designers, architects and contractors hiding defects in their workmanship and procedures, and the leaks themselves, which can lie undetected for years.

But as the Herald revealed last year, the building industry became sufficiently worried to set up its own steering group to look into the problem. Then the Building Industry Association, the Government-appointed body that oversees the building code, launched an independent inquiry headed by former State Services Commissioner Don Hunn, with architect David Kernohan and civil engineer Ian Bond.

Last month a well-placed industry source estimated that one in 10 new homes - 2000 of the 20,000 built each year - were at risk of leaking and rotting. The Forest Research Institute confirmed hundreds of examples of rot, which would be representative of thousands built in the past five years.

One building repair specialist, Steve Alexander, said he was investigating leaks at 560 units spread across 49 properties, including 10 multi-unit developments.

This week the authority's independent inquiry issued a preliminary report warning that "while further research into the nature and extent of the problem must be undertaken, it may be wise at this time to accept that there is a problem and that something(s) should be done now".

What damage will the problem cause?

The most obvious is repair bills for sodden carpets and rotting floors and walls, which run into hundreds of thousands of dollars.

A study of 250 new homes with leak damage by Auckland building repair specialists Prendos put the average repair bill at $32,000.

Homeowners also face a potential health hazard from the growth of toxic moulds, such as stachybotrys, which thrive on damp conditions.

Wider risks include rising insurance premiums, falling property values for all new multi-unit properties, a loss of confidence in the building industry leading to a downturn in construction and potentially crippling lawsuits against developers, builders and the councils who approved leaky buildings.

Such knock-on effects happened in British Columbia, where the problem developed from similarly low-key beginnings.

Why are so many new houses leaking?

The authority's report confirms that it started with a dramatic change in building styles. New Zealand houses used to be made of weatherboard or brick, which allowed water to get in and out. They had sloping roofs and eaves, which allowed rainwater to drain away from the house.

But in the past 10 years there has been a revolution. Mediterranean-style homes are now built with flat roofs and no eaves.

Many have balconies inside the line of the outer walls, which act as water traps. The Prendos survey of 250 homes on 50 sites found balcony leaks on every site. Many leaked because the doors onto the outside area were not properly sealed with flashings (strips of metal designed to ensure there are no gaps where parts of a building join together).

The report says a general lack or misuse of flashings is one of the biggest problems.

What happens when the water gets in?

It becomes trapped because the outside wall is a single sheet designed to keep water out. Common materials here are stucco, fibre cement and polystyrene with a plaster coating (often known as external insulation and finish systems or EIFS).

Unlike weatherboard and brick, they do not breathe. The gap between the inner and outer wall is often packed with insulation, so the water cannot drain. It therefore starts to rot the timber framing.

Many building experts say scrapping the requirement to use treated timber in 1996 was directly responsible for the present problem.

Until then, timber had to be chemically treated against borer, which coincidentally gave protection against rot. Since the 1996 law change, the use of cheaper, untreated, timber has taken off.

Ian Holyoake, manager of EIFS manufacturer Hitex Plastering and a vocal campaigner for a return to treated timber, estimates that 80 per cent of houses built in Auckland in the past six years used untreated timber.

The report recommends that builders and developers return to the use of treated timber on wall frames or at least the bottom plate of the frame wherever water is likely to get in.

Does this mean we should start using treated timber again?

Not necessarily, replies inquiry member David Kernohan. He says the team has suspicions about the effectiveness of kiln-dried timber in wet conditions, but cannot prove there is a problem.

The industry will be able to make a better decision in about three months, when it gets research comparing the performance of treated and untreated timber from the Building Research Association of New Zealand and the Forest Research Institute.

Kernohan says a return to treated timber frames may be unnecessary. The group's report recommends the use of a protective layer between the inner and outer walls of the house. This would probably mean a sheet of plywood over the frame, leaving a gap to the outside wall. Water could drain away and even untreated timber would stay protected.

The idea is already widely used on commercial buildings and is similar to the solution introduced in British Columbia.

Who is to blame?

The report says that although some of the causes of leaky buildings are technical, changes in the economy and the housing market are equally important.

The preference for inner city multi-unit housing projects, especially in Auckland and Wellington, in the past 10 to 15 years has created a highly competitive market. Land is at a premium, so holding down prices is paramount. That leads some developers, builders and subcontractors to cut corners.

"A lot of it is cost cutting," says Kernohan. Lack of basic building skills and knowledge, especially on the relatively new multi-unit buildings, plays a large part too, he says.

The report says anecdotal evidence suggests a general decline in skills.

It also points to confusion and a lack of accountability in the subcontracting system, which means no one takes overall responsibility for a project any more.

"There can be over 50 subcontractors on a large site," the report notes. "The co-ordination and sequencing of cladders, flashers, plumbers for instance is often difficult and not given adequate priority due to time and cost constraints."

All three theories are supported by the many industry professionals who have told the Herald of shocking labour practices.

Several say the cost-cutting mentality has allowed some contractors to employ virtual "slave labour", often new immigrants who are desperate for work but have no knowledge of even basic building skills.

Can you claim insurance for your leaky home?

Probably not, but it pays to check. Insurance Council chief executive Chris Ryan says you can claim on your home and contents policy, but only if you can identify who is responsible, such as your builder.

Ryan admits this is often not much use. A common example, he says, is rot that can be traced back to the bottom plate of a timber frame - probably because the plate was soaked in the rain for three days while the builder waited to put walls above it. But proving that five years later is impossible.

Some policies specifically refuse cover for defects in workmanship.

Can you sue instead?

Yes, if you can afford it. So far it seems most homeowners have concentrated on getting their builder or developer to make repairs, but failing this you can take action.

Residents of a block of terraced houses in Rose Rd, Ponsonby, sued the builder and the council when the building rotted so badly that a double bed and a washing machine fell through the floorboards.

At Marion Square, a 40-unit block in Wellington, the body corporate has gone to court after damp infected the building, forcing whole inside walls to be removed and spreading the toxic mould stachybotrys.

The Herald has learned of other cases, including about 60 against councils for approving leaky buildings (15 of these are against the Auckland City Council).

However, the cost can be high. One group of tenants who estimate they have suffered up to $100,000 worth of damage have backed off suing their developer, as their lawyers warned it could cost them $120,000 to get the case to court in three to four years.

* If you have more information about leaking buildings, please contact us. Email: newsdesk@nzherald.co.nz Fax: 09 373 6421