Thursday, 30 April 2015

That all houses be bomb shelters and also be made of gold

It really isn't all that puzzling why Councils run such pedantic building consenting rules if they're on the hook for all the downside costs if anybody doesn't bother getting a building inspection report later on.

Here's the NBR's Victoria Young:
Auckland Council says it has reservations over a High Court decision which means it has to pay $25 million to leaky building owners.
Claims manager Sally Grey says the decision is “complex and lengthy” and the council will take time to consider an appeal.
Justice Murray Gilbert ruled substantially in favour of apartment owners in the Nautilus apartment building case.
The lawyer who took the suit, Tim Rainey, says Auckland Council will be left with the bill as other defendants in the case have been relieved of liability or are unable to pay.
Read the whole thing. Fixing liability here and legislating around the Supreme Court ruling on leaky buildings might be important.


  1. I don't know about the Nautilus. But I, foolishly in hindsight, bought an apartment with my eyes wide open about leaky buildings. This apartment had solid concrete walls and concrete tile roof. That shouldn't leak.
    As it turned out, the North Shore Council inspectors gave it a Code Compliance Certificate, even though it did not comply with their own requirements (eg slope on decks). Water eventually got in. Auckland Council are now in the gun.
    The problem is not gold-plating. The problem is councils certifying buildings as "up to standard" when they were not.
    Should that be a council role (and liability)? Why not farm it out to insurance companies and their inspectors, as they are professionals at assessing risk?

  2. Actually concrete is very 'leaky' unless treated in special ways.

  3. Enjoyed your article and was motivated to go and read the court ruling. So I can report that the council is on the hook for nothing other than their own negligence and incompetence. You get the sense that the council at the time was very much out of its depth when it issued the consent and approval for what was a very substantial building. I can also let you know that people who purchased unts in this building did get inspection reports and did inspect LIMs etc. As the judge puts it a prudent buyer would not have found information that "disclosed any information that would alert a
    purchaser to the prospect of the defects." There was one exception where the judge says owners did contribute to their own woes, but most did not. Nor does the judge say that the council is liable for all the problems of this building. But they are liable for the results when they said the cladding was OK, when it seems it was not - and was easily seen to be not installed properly. They are also liable when they said the plans met the building code (in order to be given the consent originally), but in respect of important elements in the building there were no plans!! Possibly a bit sad for Auckland ratepayers, they inherit this cost as a result of the amalgamation.

  4. It will be very interesting to see whether AC appeal. The vast majority of leaky buildings probably weren't the fault of councils and they have ended up on the hook apparently onbly because they are the "last man standing".

    The history of the sorry saga starts in 1991 when bi-partisan legislation stripped all councils of the autonomy they had had up till then to set and administer building codes. The legal authority to set building codes and standards passed then to the Building Industry Authority, a government body set up for the purpose.

    From then until 2004 councils basically only administered the code although they still bore a ten-year liability for defects. During that period field inspectors could approve variations to the consented plan as long as the variations also complied with code. In hindsight that was probably a mistake.

    But the point is that during 1991-2004 no council could have withstood a legal challenge from a builder had they refused to consent a plan that complied with the products and methods approved by the BIA. So even if the experienced hands at a council knew that a building might end up with watertightness problems they had no choice but to approve the plan and issue the Certificate of Code Compliance if the building complied with the code.