Looking Beyond the Cracks – Rory Crosbie

December 16, 2013

The physical damage to land and buildings in the greater Christchurch area has been well documented following the February 2011 earthquake.

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Article originally published in the Canterbury Times November 2012

Buildings that were significantly damaged have already been demolished and most will be replaced. For the moderately damaged properties that remain, repairs are now underway. During the completion of earthquake damage repairs, non-earthquake related building defects are being discovered.

Owners of damaged properties are relying on their insurance companies to cover the cost of repairs. The larger insurers have teamed up with project management organisations (PMOs) as their agents to provide building management expertise in the claims process.

PMOs are working closely with the case managers to coordinate and manage the claims and building process. Some PMOs are currently handling up to 7,000 claims.

When scoping repairs PMO’s have to consider geotechnical conditions, structural remediation of both earthquake damaged and prone buildings, and now for most a first, weather tightness defects.

As the repair process gathers momentum, our Christchurch office has been called on by a number of PMOs for weather tightness advice. Initially while undertaking repair work they discovered damage under the cracked and seemingly sound claddings from weather tightness defects. It was clear this damage existed prior to the earthquakes.

More recently detailed examination and timber sampling, supported by laboratory analysis has been provided by Prendos, to determine when the damage occurred.

Discovery of weather tightness defects during repairs can result in a stalemate between the claimant and the PMO and insurer. The question arises, who pays for weather tightness repairs? For pre-existing damage the cost lies with the building owner. Dual funding of projects, with the inherent conflicts of interest and risk of disputes, is best avoided.

As Prendos works with these project managers, their level of skill in identifying risk features and associated signs of failure increases. Initial opinion was that the “leaky building problem” was an Auckland issue. It is now realised to be a nationwide problem.

Some pro-active PMOs are keen to avoid difficult repair scenarios. They have realised that properties under their care contain high-risk weather tightness features and as such are likely to have significant weather tightness defects. This is of no surprise as many properties throughout New Zealand contain similar highrisk features and were constructed when untreated timber framing was in vogue. Desktop weather tightness risk assessments by PMO’s have identified that approximately 10- 15% of the properties under their care are at risk.

For owners of property less than 10 years old additional funding is possible, either through the government’s Financial Assistance Package for leaky homes, or through gaining compensation through the justice system. For those outside the 10-year limitation, there is unlikely to be any avenue for legal recourse or financial assistance. This adds a further and unwelcome burden, as owners try to restore their buildings and their lives.

Prendos is now carrying out initial weather tightness assessments on at-risk properties prior to earthquake repair works being undertaken. This assists the PMO and insurer in their decision making process. Insurers in some instances are using our initial assessments to negotiate cash settlements. When greater information is required we provide more detailed invasive inspections and reports.

This approach has the advantage of avoiding the later impasse and likely conflicts during earthquake repairs. More importantly it gives all parties the opportunity to consider their choices and make their decisions before theclaims are settled.

Rory Crosbie – Southern Regional Manager

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