|By Philip O’Sullivan|
|Whilst we welcome this Government initiative to assist the owners of homes affected by ‘leaky building syndrome’, we do not think the scheme as now passed into law will resolve the problem for many homeowners.|
The aim of the Act is for the parties to reach legal settlement. In that regard, the scheme may be reasonably successful. However, it should have been aimed at ensuring the affected homes are properly repaired.
The underlying cause for the sudden growth of the ‘leaky building syndrome’ is the demise of Boron treated timber. Non-ventilated monolithic claddings had a proven level of performance over Boron treated timber. The same claddings, when installed over ‘chem-free’ or H1 LOSP treated pine are now failing.
Unless these claddings are removed and installed over a drained and ventilated cladding, further failure is likely.
At Prendos, we undertake many investigations and subsequently oversee repairs to affected homes. We cannot reliably predict the level of damage until the cladding is removed and thus the cost to repair is uncertain.
The Resolution Service assessors will be inexperienced with this work and will almost certainly fall into the trap of under-specifying repairs or under-estimating the cost. The uncertainty will add cost to the dispute, whilst reducing the levels of settlement.
Once a homeowner finally reaches settlement, they are on their own. Settlements, whether mediated or adjudicated, will invariably be considerably less than the repair cost. Without the proper checks and balances, owners may undertake a lesser repair because they may not want to fund, or be unable to fund the balance. People are also vulnerable to the contractor who can ‘do it cheaper’.
So there is a very real danger the whole process of failure, investigation and dispute will be repeated. This is the British Columbia experience. We don’t want to go down the same path.
We believe that homes that need repairs, as confirmed by the Resolution Service assessors, be notified to the local Council so that the recommendation and repair process (building consent) can be recorded and then be available for future owners.
Many, if not most homeowners using the service will engage legal counsel. The likely savings would be the assessor or mediator, though there is a nominal charge. The low settlement that may well result, means the overall loss could be greater than if the traditional litigation-mediation pathway was followed. There is also the disadvantage in not being able to choose your own expert or mediator. A good mediator is expensive, but the cost is usually only for one day and it is shared among the parties.
A longer term concern is the evaporation of money for settlements. The insurance industry is withdrawing cover and companies within the building industry may well choose to close down and restart as a new entity to avoid liability.