Leaky building remediation — issues to consider

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The industry is waiting with bated breath the soon-to-be-announced new package from the Government on dealing with the leaky building crisis.
The focus of most commentators will be how, and in what proportion, the Government, the councils and the home owners fund the multi-million dollar remediation of existing leaky homes.

For builders, the issue of liability will also be crucial. The previous proposal required only that the home owner did not sue the council, leaving everyone else still “in the gun”.
Taking on a leaky building remediation is like stepping into a minefield — you never know when one will blow up in your face. When your best efforts as a building professional fail to fix the problem, you will then be liable for it, even if it wasn’t yours in the first place.

There is a lot of suspicion and reluctance in the industry to tackle these fixes. Everyone knows that once you step onto a building site you attract liability.
The RMBF has put together a team that will be watching with interest what the Government comes up with, and will be working to ensure that the liability issue is addressed, such that members can take on these jobs with the confidence of knowing they will not be blamed for making an honest attempt to fix a systemic problem.

Part of the Government’s package has to be to “draw a line under” the problem with existing buildings so that all parties can move on.
Whether you should be involved in remedial work must be considered on a case-by-case basis. Remediation is now recognised as a specialist area in itself, and many builders have already set themselves up as experts in this space.

If a funding package is available, then it is likely that more builders will want a piece of that work.
However, there are ways to limit your exposure. If the remediation proposal has been designed by a professional, and you work under the supervision of that professional and build only to the design, then you should be able to avoid liability.

It is worth considering getting an indemnity from the design professional, although this may be like pulling teeth!
A major problem with leaky homes is how difficult it is to assess the extent of the damage. Often it comes to light only when the job has started. For this reason any leaky job should ideally be done on a charge-up basis.

Despite the fact that home owners themselves often don’t know the extent of the damage, they will expect fixed-price certainty from you — another good reason to ensure adequate testing has been carried out and detailed drawings and a scope of works has been prepared before you enter into a contract.
If you become involved in remediation, no matter how detailed the documentation is that is given to you, you should ensure that everything you do is documented ruthlessly, including taking photos every step of the way. A picture really is worth a thousand words.

Other factors to consider as to whether you really want to get involved in remediation include:
• Did you build the property in the first instance? If you are likely to be drawn into the remediation process anyway, via litigation, then you may be motivated to be proactive.
• Any work you do will start the clock again in terms of the 10-year limitation provisions of the Building Act 2004.
• If you tout yourself as able to design the solution, are you willing to “gear up” with the best equipment in order to meet the market expectation for analysing homes, eg, thermal imaging?
• Be prepared to stand firm on quality in the repair process. Quick fixes may leak again.

Watch this space, as the RMBF will be continuing to roll out advice and guidelines on how builders can be part of the solution without sacrificing themselves or their business in the process.

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