Leaky Homes Exposed 

1. Standards New Zealand

What happens when the instructions telling you how to build a house are defective?  Leaky, rotting houses!  Then, when everyone follows those instructions, you get… lots of leaky rotting houses – the leaky building scandal.

Standards New Zealand writes the documents which become the minimum acceptable standards of practice for the products and services we buy.  These Standards provide consumers with protection.

The law is clear and precedence is well established.  If a Standard fails to provide consumer protection, then the Standard itself is negligent. Conversely, if a builder falls short of any Standard, and someone suffers loss as a direct result, then the building is liable.

Standards New Zealand appoints carefully selected industry experts to Standards Committees who then write the Standards. It is their duty, when accepting that position, to ensure these Standards are fit for purpose.

Standards Committees, wrote, updated, and amended standards covering how timber should be treated, what timber should be used where, and how the timber should be used.

BIA (Building Industry Authority) quoted the Standards within ‘Acceptable Solutions’, meaning that as long as your design and construction followed the standards, the building work would automatically be deemed compliant with the Building Code. It would get a Building Consent and a Code Compliance Certificate. 

Councils would refer to the Standards when approving designs and inspecting buildings under construction.

BRANZ (Building Research Association of New Zealand) would include citations to the Standards as part of the process of appraising products as being fit for purpose and meeting the requirements of the Building Code.

Architects, designers, specifiers, and builders followed the Standards, expecting that the result would be fit for purpose.

Reviewing the versions of the NZ Standards shows a systematic reduction in timber treatment concentrations since the 1952 Government Enquiry first approved the use of Boron as a treatment. By 1992, the treatment only had to protect against insects and by the time NZ Standard 3602:1995 was released, totally untreated timber was permitted.

The loss of treatment resulted in a loss of durability and damage from decay to homes. The leaky homes scandal should in truth be called the ‘lost treatment scandal’ as it was the lost treatment that allowed the extensive decay problems. Houses have always, and will always leak, and with untreated timber, they will decay. History has backed up that there was no obvious scientific basis for reducing treatment and consumers were let down.

Timber in walls required adequate ventilation, and this was written into NZ Standards up until 1995.  Without ventilation, the timber couldn’t dry out when houses leaked, and once they also allowed under-treated timber, the houses rotted.

NZ Standards failed to protect consumers. The Standards were not fit for purpose. 

When it became obvious that houses were leaking and rotting and the Standards were defective, Standards New Zealand failed to immediately correct them, and this directly allowed many tens of thousands more leaky homes to be built.

Adding back treatment and cavities would have added very little additional costs compared to expensive recladding costs facing homeowners now.  Maybe Standards New Zealand were concerned that correcting defective standards could imply liability for the thousands of faulty houses already built. Whatever the reasons, they failed us.

Standards New Zealand are not the only negligent party. It took all the Watchdogs to create the crisis, then mislead the consumers to thinking it was the builders who were responsible.   

2. BRANZ (Building Research Association of New Zealand)

When the publicly funded, approved, and recognised watchdog research organisation issues defective appraisals, you get …. defective products.  When those defective appraisals are for critical building materials and are relied on by councils, architects, specifiers and builders you get … lots of defective, leaking, rotting houses.  You get a 'leaky homes crisis'. 

BRANZ claim to be an independent research organisation funded by a levy on every building consent which owners pay for.  However, they also solicit for and receive money from commercial activities, one of which is “appraising” products and systems and charging an annual fee to keep it current. This must bring into question their independence.

In BRANZ words, a BRANZ appraisal is “a robust, in-depth and independent evaluation of a building product or system to assess whether it is fit for purpose and meets Building Code performance requirements”.

BRANZ Appraisals were, and still are, widely accepted by councils to decide whether a proposed building design, that isn’t an “Acceptable Solution” i.e., differs from the standard, is going to meet the minimum performance compliance requirements of the Building Code as an “alternative solution”. 

BRANZ was and still is, the recognised authority in New Zealand.  Architects, designers, specifiers and builders place trust in BRANZ appraisals to identify appropriate products and processes that, when followed, will result in compliant, sound durable buildings. 

BRANZ had representatives on the Standards Committees who oversaw the reductions in timber treatment and loss of ventilation.  BRANZ knew exactly what had changed in the standards.

BRANZ conducted their own research as early as 1986 showing that all windows ‘leaked’, that framing timber should never be ‘enclosed’, and even well-treated timber could still rot behind stucco. 

Products that BRANZ appraised in their “robust, in-depth and independent evaluation” include Harditex, Hardibacker, Untreated Timber, and H1 Timber - cladding that are absorbent and framing that tat failed and resulted in leaky, rotting homes. 

BRANZ appraised these products for use virtually without limitation and without appropriate testing, with no anecdotal evidence of performance, or with no thorough review of relevant literature.

The sheer volume of failures, and the fact that these BRANZ appraisals are no longer in place is clear evidence that they were defective and BRANZ’s scientists were either incompetent or negligent, or maybe even fraudulent?  This has resulted in immense financial and emotional harm to homeowners.

When industry experts started confronting BRANZ with evidence and recommendations, BRANZ held firm and didn’t withdraw the defective Appraisals, resulting in thousands more leaky homes being built. BRANZ and its Insurer knew full well that withdrawing them was an admission of liability so that couldn’t happen.  Never mind that more defective houses would be built as a result.

BRANZ, as one of the watchdogs, had to consort with the others so all watchdogs had the same story. This way they would get protection and divert liability - this is the coverup by BRANZ, Standards New Zealand, Councils and the BIA we talk about in other articles.

The courts so far have held that BRANZ has a successful proximity defence from owners  (i.e. owners can't sue BRANZ as there was no direct connection or contract).

Why did BRANZ push through these appraisals?  

As a supposedly independent body of professionals and scientists, they had a duty of care to protect the public and make sure that what they appraised would work.  Was it because issuing appraisals increases sales, profits, and salaries?  They would certainly have received money from James Hardie and the timber producers?  Who knows, but these watchdogs should be hanging their heads in shame. 

You can read more in these articles and can find the relevant publications in our document library.

BRANZ Are To Blame Part 1

BRANZ Are To Blame Part 2

3. Building Industry Authority (then DBH and now part of MBIE)

Homeowners, builders and councils were failed by the BIA who then covered up their mistakes with more deception and lies. 

The BIA were a statutory body with the duty of care to ensure that Territorial Authorities (e.g. local councils) and Certifiers had processes and procedures to ensure the requirements of the Building Act were complied with.  

The BIA:

• conducted determinations (to settle interpretations of compliance),
• proposed to Parliament any changes needed to the Building Act, Code and Regulations,
• appointed, trained and audited the authorities (mainly local councils) to approve building consents, inspect building work and the issue Code of Compliance Certificates (CCC) certifying that the houses were built in accordance with the requirements of the Building Code.

The BIA issued “Acceptable Solutions”, which were specific building products, and processes that held the status of ‘deemed to comply' with the Building Code.  Any building design that matched the Acceptable Solution had to be accepted by councils.

Acceptable Solutions referenced relevant NZ Standards, which then brought the defective NZ Standards into ‘deemed to comply’ status. In this way, the reduction in timber treatment and other critical factors, such as loss of ventilation became ‘deemed to comply’. Councils were legally required to accept this unless they had sufficient evidence to dispute the Acceptable Solution with the BIA.

These Acceptable Solutions included using solid stucco plaster with no cavity for drainage or ventilation (B2/AS1 1992).  This despite BRANZ Report rp031-1 (1983) stating that framing should never be enclosed, and MP3640:1992 stating that timber must be adequately ventilated. 

As you will read in other articles and documents, the BIA failed to properly advise, train or audit the councils with the result that they incorrectly allowed H1 and later untreated timber to be used behind unventilated absorbent claddings such as Harditex and stucco.  Thousands of homes rotted and thousands more now have a CCC which is defective, because the houses don’t comply with the Building Code.

The BIA was warned in 1999 about the impending leaky home crisis.  However, as a series of emails between Doctor Rot, Phil O’Sullivan of Prendos, and the BIA show, they ducked, obstructed, diverted and failed to make the obvious changes that would have saved thousands from misery. 

Instead, the BIA claimed they did not have the power to make changes and issued media statements that the problem was a lack of weathertightness, rather than untreated timber and no cavities.

To avoid exposure to liability, the BIA delayed changing Acceptable Solutions B2/AS1, B2/VM1, E2/AS1 and E2/VM1, causing five more years of defective homes to be built.  The BIA did start, then abandoned, a revision of B2/AS1 in 2002, which could have saved maybe 40,000 homes from being wrongly built.

The BIA exercise the power to make “Determinations”, which are binding judgements in disputes between councils and homeowners.  There is a huge conflict of interest when the dispute involves houses built using defective Acceptable Solutions issued by the BIA, then peer reviewed by the BIA.  Any truthful determination exposes BIA negligence.

When Parliament enacted the Weathertightness Homes Resolution Homes Act, owners could claim only if they could prove that defects had caused the damage.  The BIA administered this Act, which was again a conflict of interest.  If the BIA had never allowed undertreated timber and no ventilation, the defects in the buildings would have caused little damage.  This was never argued in the WHRS - it was all put back on the builders and the councils.

The BIA appeared to adopt the belief that it wasn’t up to them to force appropriate standards onto the construction industry. Market forces would eventually force manufacturers and builders to work to higher standards, that is, once sufficient evidence in the courts established who was at fault because of houses failing, consumers will demand better standards and manufacturers will have to up their game.

The BIA drew criticism in Nov 2002 about their failure to keep the central government advised of the extent of the crisis.

We have many emails, obtained under the Official Information Act showing the discussion between the BIA and other parties and demonstrating their reluctance to accept advice and the reality of the situation.

More details and proof to come.

Some of these emails are available on our document library and we have more to post once our legal team clear the way.

4. Local Councils (Territorial Authorities)

It defies belief that councils approved the defective designs and construction that left thousands of homes leaking and rotting. But they did. Homeowners, and the ratepayers continue to foot the bill for councils’ failures. 

Councils had full responsibility to make sure that your home was built in accordance with the Building Code and complied with requirements for Durability and Moisture Ingress.

They failed us dismally, conspired to cover up their errors and continue to make it difficult and expensive for owners of homes with leaking monolithic cladding to fix them.

In some ways, one must feel a level of pity for the councils who were virtually set up, then shot down during and after the Leaky Building Scandal.  They also wrongly believed that a BRANZ Appraisal meant something and could be relied on when assessing alternative solutions.  Big mistake. 

Appointed by the BIA to implement the Building Code on the ground, the local councils were probably undertrained, undermanned and underqualified to take on the task.

On the other hand, the way that the councils have tried to offload the blame and costs onto homeowners has been an appalling abuse of power and authority that continues to this day.  

They (well actually their long-suffering ratepayers), have been held financially accountable by the courts for some of the leaky homes scandal costs but were it not for their negligence and coverups, the scale of the scandal would have been far less.

The councils were 100% responsible for deciding whether a building was going to comply with the Building Code.  If they agreed that the design was to an Acceptable Solution, then it would automatically comply.  If it wasn’t, then the council had the responsibility to assess that the work will ‘on reasonable grounds’ be compliant.  They could then approve it as an alternative solution. The applicant was responsible for supplying proof however councils relied heavily on defective BRANZ Appraisals in making their assessments. 

They clearly did not do their evaluations properly, nor did they inspect properly, allowing tens of thousands of houses to be built which didn’t comply with the Building Code for Durability or Moisture Ingress. The bulk of the costs of this are now on the homeowners.

Once a CCC is issued, the council virtually guarantees the house for the next ten years. So you can understand why they started making very hard for owners to get CCC for houses built with untreated timber and no cavities. 

One of their biggest failures was not responding quickly and appropriately to the advice from the BIA in 2002 that untreated timber should not be used.  As soon as this was known, they should have informed everyone currently building or in the consent process, and refused CCC for houses not built with the correct timber.  But, can you imagine the liability issues?  Better instead to stealthily introduce new controls, make it hard for owners, and admit to nothing. 

The conspiracy of coverup from the BIA, Councils and BRANZ resulted in five more years of defective houses being built, with builders being blamed for the defects and homeowners picking up most of the repair and legal cost, and emotional suffering. All for something outside of their control.

In other articles, we go deeper into the Councils’ significant contribution to the leaky homes scandal, what they did wrong, what they didn’t do and what they continue to own up to..

5. Central Government

When central government creates a disastrous situation, then sits back and does nothing, letting the crisis explode  

Central Government passed the Building Act in 1992 and established the Building Industry Authority to oversee its implementation.  

The Building Act was introduced to reduce compliance costs and speed up the building consent and construction process on a uniform basis across the country.

The Act also allowed for private Certifiers to manage consents, inspect buildings that included Acceptable Solutions, and approve for councils to issue Code of Compliance Certificates.  This was a central government disaster as there was no effective insurance available for the private certifiers, and the liability for their mistakes went back onto the councils (i.e. ratepayers).

As stories of leaky buildings emerged, the BIA appeared to do little, and central government did even less. Finally, when the problem could no longer be ignored, the Hunn Report was commissioned to investigate.  This took time and the fundamental changes to stop leaky homes from being built took even longer.

Anecdotal evidence is that central government at the time delayed decisions that would stop leaky homes from being built because it would be too expensive and embarrassing to admit that there had been mistakes made at central and local government levels. 

Better to blame the builders for building houses that leaked. 

Better to conjure up the Weathertight Homes Resolution Service to distance the Government from the actual defects causing leaks.  

More detail and evidence on this to come.

Tags: Watchdogs, Standards New Zealand, Timber Treatment, Ventilation, Cavities, Certificate of Code Compliance, CCC, BIA, MBIE, BRANZ, Councils, Negligence, Acceptable Solutions, Untreated Timber