STUFF – West Auckland artist Gary Stewart is one of the latest leaky building owners to join a class action against cladding maker James Hardie. He turns 65 this year, so the idea of raising a mortgage to reclad his unit, one of several dozen in a block in a semi-industrial area of the suburb of Henderson, doesn’t appeal. “I’m mortgage free,” Stewart says. “But because of this leaky building I’m going to have to a mortgage of $180,000, which is not what I want for my golden years. But he admits, “I’d be lucky to get a 10-year mortgage at my age. The only income I would be able to declare is the pension”.
Stewart is on the body corporate of 2 Hulme Place, and now he and other owners have signed up to Parker’s class action, which James Hardie is defending. He is speaking publicly about his decision to join the lawsuit in the hope of encouraging others to join, unimpressed that with unknown thousands of leaky buildings out there, the Supreme Court only gave until the end of this month for people to sign up to Parker’s case, notice of around six weeks.
Stewart faces a $2300 fee to join the class action, and then a $10,000 contribution to the cost of taking the suit for this year. The case may not get to court until next year, meaning more money is likely to be needed.
“If you can’t come up with the money for a lawyer, you can’t get justice,” Stewart says.
“They may not be big sums of money to Alan Gibbs, but they are big sums of money for me.”
In any leaky building complex block are owners with money, and those without.
When the body corporate at Stewart’s place called a special vote to get the units reclad, it knew that some unit owners might be forced to sell, or at the very best, borrow until the reclad was done, before having to sell their home.
“They may still be out on the street, but at least they won’t be out there with no money,” Stewart says.
Owners who can’t raise finance after a body corporate votes for a reclad may end up losing their homes.
Mortgage adviser Karen Tatterson from Loan Market says bridging finance in such circumstances is hard to find, though if people have plenty of equity and sufficient income, banks may give people interest-only loans to complete recladding.
Critically, many have extra costs, such as having to rent a place during the reclad.
Selling an unfixed leaker is hard.
Tatterson gave the example of clients of hers with a leaky apartment in Howick.
In its current state, it is practically unsaleable, except to a cashed up investor, as banks are not keen to lend on risky, unfixed leakers, Tatterson says.
But for those like her clients who can manage to get finance, it is possible to undo some of the losses their leaker has caused them.
“It’s probably worth $500,000 now. They spend $300,000 fixing it, and it will probably be worth $1 million when it is finished.”
Doing nothing isn’t an option.
Stewart’s home was built just 15 years ago, but if nothing is done, one day conditions will get so bad council inspectors may condemn it.
Nobody knows how many unfixed leakers there are in Auckland, and other urban centres.
Stewart says he and other owners were living in denial until testing last year revealed the truth.
There was black, toxic mold, and, it turned out, no insulation, he says.
With the government assistance package for homeowners having closed, Parker says the class action is the last option left to many leaky building owners.
“New claimants continue to come forward from all over the country. Many have often only just heard about the Cladding Class Action and haven’t realised the 10-year Building Act limitation longstop and the general 15-year limitation longstop do not apply to this claim.”
The class action already contains building owners from Auckland, Wellington, Christchurch and some from small towns, indicating just how widespread the problem is, and how many leaky buildings remain unfixed.
And even after all this time, there are building owners in denial, or who have feared to get their places checked out. “A number of owners have approached us unaware of any weather-tightness issues with their properties,” Parker says. “After experts have investigated and found problems, those owners have joined the claim.
But so far only around 85 people have joined. It’s not the only class action leaky building case heading to court. While Parker’s focuses on Harditex and Titan Board, lawyer Adina Thorn has begun a case against Carter Holt Harvey alleging its Shadowclad cladding product was defective. Thorn is also building a book of clients to take a case against Auckland Council, and another against James Hardie. Work on sites like the leaky townhouse complex at Kahui Place is generating evidence for use in Thorn’s James Hardie lawsuit.
Just before Christmas a video crew and forensic building expert were on site gathering information. Stewart is pretty black about the failures, including by governments and local councils, that have left people with him with liabilities of hundreds of thousands of dollars, and he thinks, have now turned their backs on the problem.
“The market will deal with it in the long term, but it doesn’t care about the little people,” he says.