The leaky building crisis is still impacting many homeowners in New Zealand. The crisis, which began in the late 1990s and early 2000s, was caused by widespread building defects in the construction of many homes and apartment buildings. The defects resulted in water damage, mould, and structural problems in many buildings and houses.
Is the leaky building crisis still impacting New Zealand homeowners?
Over Two Decades And Counting
Although the leaky building crisis has been ongoing for a quarter-century, many homeowners are still dealing with the consequences, including significant repair costs, declining property values, and health problems related to mould exposure. The government and industry have taken steps to address the crisis, including changes to building regulations and compensation for affected homeowners, but the problem continues to affect many New Zealanders.
It is estimated that tens of thousands of homes and buildings in New Zealand have been affected by the leaky building crisis.
Let’s take a look at some of the current issues surrounding leaky buildings…
Can I Borrow Against a Plaster Clad Home?
Mortgage lenders in New Zealand may be willing to loan money for a plaster clad home, but the loan approval will depend on various factors, including the age and condition of the home, the value of the property, the financial standing of the borrower, and the lender’s own risk tolerance and lending policies.
In the case of homes that were built during the leaky building crisis, some lenders may be more cautious about lending for properties with a history of building defects, especially if the defects have not been properly remediated.
It’s important to note that even if a mortgage lender is willing to provide financing for a plaster clad home, the loan may come with conditions, such as requiring a professional inspection or appraisal of the property, or requiring the borrower to provide a larger down payment or obtain additional insurance coverage.
It is recommended that prospective buyers of a plaster clad home seek the advice of a qualified building inspector and a financial advisor before making a decision to purchase, and before approaching mortgage lenders to secure financing.
What About Insurance?
Insurance coverage for plaster clad homes in New Zealand may vary among insurance companies. Some insurance companies may be willing to provide insurance coverage for plaster clad homes, while others may decline coverage or limit the coverage they provide based on the age and condition of the home, as well as the nature and extent of any building defects.
It’s important to keep in mind that even if an insurance company is willing to provide coverage for a plaster clad home, the coverage may come with restrictions or exclusions for certain types of damage, such as water damage or mould, that may be more prevalent in homes affected by the leaky building crisis.
It is recommended that homeowners of plaster clad homes review their insurance coverage carefully and discuss any concerns or questions with their insurance broker or provider to ensure that they have adequate protection for their property. In some cases, homeowners may need to obtain additional insurance coverage or endorsements to fully protect their property and financial interests.
For expert construction law advice contact Wynyard Wood.
If you are involved with a building project and need legal assistance, talk to one of our construction law experts. We can help you objectively review your circumstances, and what next steps are most appropriate for your situation.