Leaky Home Buyers Required to Investigate

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04 April 2013

posted in Caselaw | The Low Down | Leaky | Building | Property Law

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In the recent decision of Johnson & Ors v Auckland Council the High Court found the purchasers of a leaky house had not taken adequate steps prior to purchasing the property to check for weathertightness issues and hence were substantially responsible for the loss they had suffered due to the diminution in the value of the house.

In April 2009 the purchasers bought, by way of mortgagee sale tender, a house for which substantial alterations has been undertaken, including a complete recladding of the entire property. When it was discovered the house had weathertightness issues, due to the cladding being defective, the purchasers took legal action against the Auckland Council. This was due to the Council's predecessor, the North Shore City Council, having issued a code of compliance for the alterations to the house, even though the building consent relating to the alterations did not extend to the recladding of the property.

Though the Council was negligent in issuing the code of compliance, the Court found the purchasers contributed significantly to the loss they had suffered as they had failed to make enquiries and take other steps that reasonably prudent people would have taken in the circumstances. This resulted in the Court reducing the damages which would have otherwise been recoverable by 70 per cent.

The Court stressed that each case must be decided on its own facts. Here the purchasers could not rely on the code of compliance by itself as it only related to part of the work which had been done. The purchasers also knew about the widespread problem with leaky homes and as experienced owners of valuable property were alert to the possibility that the house could have weathertightness issues. The purchasers had also not taken prudent steps in the circumstances such as obtaining a building report and inspecting the Council records, which would have shown the works undertaken exceeded those provided for in the code of compliance.

POSTED BY
04 April 2013

posted in CaselawThe Low DownLeakyBuildingProperty Law

VIEWED 4229 TIMES

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