No room for shoddy work

Developers in New Zealand that build shoddy properties, even if they used contractors, are being forced by the courts to pay for substandard work...

Two multi billion dollar landmark court rulings have been announced against major projects in Auckland where property owners were left with leaks that did not materialise until well after the building was finished.

'It is significant that developers are being held liable despite the fact that they used another company. These two cases are fact-specific but it's got to be good news generally for homeowners,' said Lawyer Matt Josephson of Grimshaw & Co.

He said that it means developers' personal assets, such as their houses, were no longer automatically protected and could be used in claims for settlement in big disputes.

In the first case the court ruled that prominent developer Greg Nielsen must pay £427,000 for creating poorly built leaky townhouses in Newmarket. Mr Nielsen, who sought legal aid but ended up representing himself, has been involved in many Auckland leaky-housing complexes.

In the second case the court ruled against North Shore developer/project manager Brian Gailer for his role in the leaky 10-unit complex Kilham Mews near the Northcote shopping Centre. A settlement hearing is pending but judgment of more than £356,000 is expected to be made against him.

Order for the payment of £640,000 to £676,400 is being sought, of which Mr Gailer is expected to pay £498,400 and North Shore City Council the rest.

'It has always been the case that those involved in building of leaky homes who have been negligent in the way they performed their function have been exposed to liability and now the courts are finding even directors of development companies liable,' explained David Heaney of legal firm Heaney & Co.

Until now developers have successfully escaped footing the bill for leaky homes by winding up project-specific companies once buildings are up and sold, well before leaks are discovered.

Auckland City Mayor John Banks has criticised developers, builders and contractors and has promised to name and shame them and said it was wrong they were getting off scot-free.

John Gray, President of the Homeowners & Buyers Association which is dealing with 4000-plus leaky-building victims, welcomed the decisions but said that councils should not signing off shoddy buildings.

Source: www.propertywire.com