Payout for apartment owners represented by Grimshaw & Co

The owners of a leaky Auckland apartment building that was supposed to be fixed have been awarded a multi-million dollar payout after the first remedial work also failed.

Nearly 12 years after the original problem at the Fleetwood Apartments was detected the repair work has finally been finished.

Experts say the story should be a lesson to Auckland Council, which approved the work, and to prospective buyers of properties with a history of weathertightness issues.

But Auckland Council says it is also a lesson to builders who want to drag these cases through the court when they ought to be settled.

The 40-unit Fleetwood Apartments in Newton on the city fringe were found to be leaking in 2003, and in 2005 an "Overclad" system was put over the existing cladding to protect the building.

But by 2011 the Overclad sheets were cracking.

All the new and pre-existing cladding had to be removed and the weathertightness damage underneath fixed.

The High Court has laid the blame for the botched job with architecture and engineering consultants Babbage which oversaw the remedial work, builders Andrew Property Services (APS) which carried it out, and the then Auckland City Council which granted code of compliance.

It has awarded the apartment owners around $2.5 million to $3 million, with the final amount yet to be calculated.

Babbage "took an inattentive approach" to the project, Justice Christian Whata said.

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It failed to get a proper survey of the building done to assess the damage from the leaking before the remedial work started, and did not ensure the Overclad was installed as per the design specifications.

It later emerged there was severe damage to the building, including rusting steel framing and water damage to fire-rated plasterboard.

APS also did not make sure a proper survey had been done, and installed the Overclad with the wrong screw fixings, which caused the cracking.

Auckland Council did not get enough information about the work before granting the necessary consents.

"Had (it) been fully informed as to the nature and spread of the water damage, (it) would have refused to issue Code Compliance," the judge said.

The council is liable for 20 per cent of the final payout to owners, with APS also liable for 20 per cent and Babbage the remainder.

Auckland Council's manager claims, Sally Grey, said it agreed with the allocation of liability.

But it didn't necessarily agree it had lessons to learn about substandard remedial work.

It emerged the council had been given misleading documentation, she said.

"Questions were asked."

However she believed the council's processes were more robust today, and it was currently in dialogue with the construction sector about providing enough detail and expert analysis of projects.

The lesson for builders was to settle claims, Grey said.

Auckland Council had tried to settle the Fleetwood case so the apartment owners could move on but APS would not contribute, and the matter went to trial.

"Ratepayers can't continue underwriting solvent builders who were on site and who are still in business," she said.

However Greg O'Sullivan, founding director of property consultancy Prendos, which recommended redoing the Fleetwood work, said council approving the consents without having all its questions answered was "not a clever thing to do, really".

Prendos had warned that cheap remedial jobs on leaky buildings would fail, he said.

"It just demonstrates that people who attempted to come up with these so-called cheaper solutions for repair are actually putting people in the direction of future and more expensive repairs," he said.

John Gray, president of the Home Owners and Buyers Association of New Zealand (HOBANZ), said sadly the organisation was seeing a spike in failed remediation jobs.

"It really calls into question the competencies and the approach that's been taken to remediations in the early years," he said.

"There's a salutary warning that must go out to prospective purchasers, that they need to look very very carefully at remediated buildings whether they be standalone homes or apartments, to ensure the right people have been involved."

HOBANZ offered "health checks" of bodies corporate for prospective apartment buyers, and he recommended people use the service.

"Some bodies corporate have deliberately withheld information, they're keeping it off the books, keeping it out of the minutes."

There was a checklist of documentation buyers should get before purchasing a property in a unit title complex., he said.

"Simply, if they're not supplied by the vendor via the agent then you just walk away.

"What really worries us is that apartments appear to be a very affordable entry point, and it's attracting dare I say it the more naive buyers and first home buyers, and they're getting blindsided by all of these... issues," Gray said.

Source - Stuff