Leaky homes: 'Sunset Terraces'

Council liability for leaky homes extends beyond standalone dwellings to include multi-unit apartments. Attempts by North Shore City to limit its liability failed in the Court of Appeal.

At issue was liability for replacing rotting timber framing and the cladding on a 21-unit two-storey residential development in Mairangi Bay. Historically, the courts have only allowed damages for a property’s loss of value where the loss relates to public health issues – dwellings must be capable of human habitation.

The Court ruled that Building Code rules designed to prevent homes leaking are intended to ensure dwellings are fit for habitation over at least a 50 year period. This brings contemporary “leaky home” problems within the historical rule. It made no difference whether the residence is a standalone building or a multi-unit development.

The Court further ruled that Council liability for homes built in breach of the Building Code applied not only to the first buyer, but also extended to subsequent purchasers of a leaky property.

‘Sunset Terraces’ – Court of Appeal (22.03.10)

08.10.002