Top agent won't sell leaky units

By ANNE GIBSON

A top real estate agent is refusing to sell apartments in a leaking inner-city building with an extensive history of problems.

Martin Dunn, managing director of apartment specialists City Sales, says he is legally obliged to warn prospective buyers about serious leaks at the Nautilus apartment block at the bottom of Hobson St in Central Auckland.

"We couldn't sell Nautilus apartments without full disclosure about the problems in the building," Mr Dunn told the Herald.

"In heavy rain, the cladding becomes a transparent membrane and the interior wall structure becomes completely apparent."

Mr Dunn said his firm was negotiating a sale to one buyer when the full extent of the building's problems were revealed. It refunded the $8000 commission and walked away from the deal.

The top-selling apartment specialist, who is a former chairman of the Real Estate Institute's licensing and investigating committees, said he could be in breach of the law if he interested buyers in the nine-level building without revealing its flaws.

He was sure all agents understood their legal obligations to reveal leaks if they were aware of them - and equally confident that buyers knew agents must tell them about any problems.

Herald investigations have confirmed that the Nautilus has a long history of defects in its finish and structure.

A council report shows water seepage into the building left walls rotting and covered in mildew.

The Nautilus in Hobson St has no connection with the planned Nautilus apartment development in Orewa.

A director of Nautilus Developments, the company behind the Hobson St building, said many repairs had been made and the building was being put right.

Rodney Melville-Smith, who owns a $1 million-plus Nautilus penthouse and a level-eight apartment, said large cracks in the exterior wall were being fixed, the leaking roof had a new membrane and a new exterior membrane was being applied to the walls.

"Most of the problems were relatively minor but it's just that there were a lot of them," he said, unveiling a long list of non-complying issues.

"I've now got a code compliance certificate for my apartments."

Mr Melville-Smith admitted that water came in through the bedroom and lounge ceilings, that the building's exterior cladding had obvious cracks and that owners of about 32 units were paying for major repairs.

"There's hardly a new building in Auckland which doesn't leak."

But he disputed Mr Dunn's claim that the exterior cladding became transparent, saying the grid image which appeared during rain was only the joins between the Hardiboard sheets.

That would be fixed when the new exterior membrane was applied and the building painted.

A report on Nautilus filed by Building Code Consultants principal Kelvin Walls with the Auckland City Council three years ago shows major safety, structural and water problems with the apartment-boutique hotel building.

The report said the building breached the Building Code and Building Act 1991 on durability, external moisture, means of escape, spread of fire, access routes and safety from falling.

The council found water seeping through boundary walls into the parking area causing mildew and rot in some of the framed walls.

Ranch-sliders leading to balconies allowed water to get in, cladding was faulty, seals between balcony tiles and exterior cladding were poor, concrete steps were malformed and dangerous and problems with the rear stairs were "too numerous to mention".

Officials warned that "various walls on the top floor and columns supporting the roof lack adequate support" and demanded immediate repairs.

At one stage the council demanded evacuation of occupants on level nine because the building was unsafe. The lift was not certified and problems with a fire wall dogged the property.

The apartments were developed by Auckland businessman Greg Davison, who finished work there in the mid-1990s.

The building, formerly Energy House, was built in the 1940s but modified and enlarged to take the units.

Problems beset the developer and building from the start and Nautilus Developments was eventually put into liquidation in September 1998 owing creditors $2.3 million.

Its directors - who include Mr Melville-Smith and Mr Davison - were last week reported to have paid Nautilus liquidator Bernie Montgomerie an out-of-court settlement on the eve of a case against them for reckless trading and failing to maintain books and records.

Mr Melville-Smith would not discuss the payout this week, but disputed the amount owed, saying trade creditors were only $800,000 in the red.

* If you have information about leaking buildings,
email the Herald or fax (09) 373-6421.

Further reading
Feature: Leaky buildings

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