Leaky Homes

I thought I would blog on the leaky home process I went through as a guide for the other poor souls who are facing the same issue.  What follows is a very brief history as the whole process took a very long time.

IMPORTANT - register immediately with the Weathertight Homes Resolution Service ("WHRS").  You have to claim within 10 years of your house being built.  Plus, under common law, you have to claim within 6 years of finding the problem.  Registering with the WHRS is regarded as making your claim and stops the clock.  In my instance, the house was built in 1998 and I registered in 2005.  The final mediation and settlement was in July 2011 which is 13 years after the house was built and 6 years since the problem was discovered, but having "stopped" the clock, the time delay did not matter (legally).

After registering, the WHRS sent out an inspector and they carried out 2 inspections with probes, producing a huge detailed report.  I went to the best leaky home lawyers in town.  They advised I hire an inspection firm and have an invasive examination (where they cut holes in the cladding) as the WHRS inspectors were not very good and had a record of badly under-estimating the cost to repair.

Was given a list by the lawyer and started at the top.  The first 3 declined saying they were too busy.  Finally found one who could do the inspection within a week.  HINT - make sure you ask the hourly rate and compare - they vary hugely.  Inspection was again conducted and found many areas the WHRS had missed.  The estimate of costs was almost twice that of the WHRS.  I hired the inspection firm to act as my project managers and to supervise the repairs. 

HINT - you could save substantial costs here if you have the time and ability to act as your own project manager.  However, he helped me redesign the house, supervised the builders and council through every critical weathertight issue (well outside my area of expertise) and ensured every thing was done properly, albeit at a huge cost and some suggestion that I was ripped off.

After some time of redesigning etc as I was not prepared to reclad in the same system and went for weather boards, funding issues, family issues (both my family and the project managers) we finally selected a large repair company.  With hind sight I can say the choice was brilliant and the foreman they put in charge was an old- fashioned chippy who would not accept a sloppy piece of work anywhere and was a great guy as well.  HINT - repair and then claim if you can afford it as until the cladding is all off, you do not have an accurate handle on the costs to repair.  Ours were out by 30%.

So, finally finished after 6 months and the family having to move out and back in.  The details and photos of the repairs and costs are given to my lawyers.  The opposing council hires the biggest firm in town, the builders hire the second biggest.  So the tennis match starts with information, delaying tactics and of course bills going in all directions.  After 2 years we finally get to mediation under the WHRS.

My lawyer warns me to keep my mouth shut and not say anything no matter how provoked unless he asks me directly.  The WHRS mediator starts proceedings (she turns out to be completely useless through the day).  My lawyer outlines our claim, then the builders' lawyer states their case and it starts as a slag off of me and everything I have done to fix my house.  The council's laywer is next and the first thing she does is to apologise to me and my family for putting us through the whole problem!  I was gob smacked.

For the next 3 hours, the builders' lawyers and building experts slandered me, impugned my every action, indulged in nit picking points of law  and made derisory offers of about a quarter of what I it had cost (all up including interest on borrowings, alternative accommodation etc).  The parties leave the room and have discussions re what they will offer/accept and so on.

We left for lunch and returned to more point scoring and insults, including one from their inspection firm saying "If you wanted too keep costs down you shouldn't have employed a Rolls Royce project manager."  My project manager went ape shit and gave him his pedigree back.  I bit my lip and wanted to point out we are talking about a large house in one of Auckland's best suburbs.

Finally, we left the room again and my lawyer said you should offer $X on a take it or leave it basis.  This was for 2/3 of what I had spent.  I was rather upset.  He advised I might get a further 10-20% if I went to a hearing of the WHRS but it would cost me about that to go to a hearing and there was no guarantee I would get the extra I wanted as the WHRS tribunal chairs tend to be lawyers who cannot make it in private practice and so tend to the poor end of the quality spectrum.  The final step is the High Court which would cost at least $100k and could be appealed.  So I caved in.  The other side accepted and the matter was settled.

The lawyer for the original builders comes over and shakes my lawyer's hand and then comes to me.  As a gentleman, I stand and shake her hand.  The council's lawyer comes over and I do the same.  I stand and said to her "I appreciated the apology.  No one other than you has ever apologised for the 6 years of hell my family has gone through."

Next, over comes the General Manager of the original builders who had sat there with his lawyers.  I remained seated, he sat down next to me and putting out his hand said "You must be relieved that is all over."  I looked him in the eye and said to him "Your firm's gross incompetence and your lawyers have cost me a lot of money; I am rather upset; I suggest you go away very quickly."  His jaw dropped and he pulled in his hand very quickly, got up and scuttled out of the room.  I should add I am the size of an All Black lock so was twice his size.  I was rather proud I had not used any obscenities or hit him.

So, there you go.  As usual the legal system has been highjacked by the lawyers in favour of the deepest pockets rather than the victims.  My family and I were blameless here.  The building firm and the council were grossly incompetent.  Parts of our house were built in contravention of existing bylaws, parts would have collapsed within 2-3 years due to unseen beams rotting out and parts of the house were found to be dangerous.  We had to face the fact that 30 years of hard work and scrimping were now seriously at risk, we had to borrow and service a huge loan while not having a permanent job, move the family out for 6 months into a shit hole of a house (to keep costs down), face 2 years delays and loan costs, all while trying to save money for possible legal and court costs.

I am very angry and as the builder is part of a listed company I am thinking of buying some shares and start attending AGMs and asking questions that might attract the attention of the media.  I am reasonably handy with social media and that presents some opportunities as well.  My daughter said "Let it go as you'll just turn into a bitter old man."  She may be right.

Back Again

Thought I would look up my blog after a very long time - whew the last post was in February 2009!

Not a lot has happened since then as our life went on hold due to the lack of permanent work and having to rebuild a leaky home. Every bit of spare cash had to be saved to meet the interest bill on a huge mortgage borrowed to rebuild the house. Then I had to save enough to fund the lawyers and potential court cases. The house is rebuilt in weatherboards and looks fantastic and settlement has been recently reached with the asshole builders and the council. (I will blog separately on the experience. Needless to say we are severely out of pocket despite not being at fault). However, finally we could sort out some of the family issues and expenditure that had been put on hold for 6 years!

My last post referred to 2 month's work. Well! I took up the role and 3 staff in the section went in all directions within short order so the boss reorganised the section and took parts of the 3 roles and combined them into one logical role and let me stay doing it. We all looked the other way as he knew I would not do the role on a permanent basis for the pay scale applying so I lasted until October 2010 until another restructuring took the role out of that section. The way it was done would have won me some dosh in the Employment Court as I had been here so long I had a good case to argue I was a permanent employee. However, I had great fun at their HR department's expense pointing out how their publicised values etc had been severely dented in this instance. At least the HR Manager had enough grace to blush with embarrassment and say I was right.

I would love to blog on my experiences at this company and name them but they helped me out of a very deep hole when I lost my job, my house and my father all within 3 months and I could not have survived without the work they gave me. So, that buys them heaps of thanks and loyalty, even from a contractor. And the people I have worked with are, by and large, great.

Shortly afterwards (before the other contract expired) I was offered work elsewhere in the company and have been here since. This contract will last until Christmas 2011 and I think that will be it as they have restructured again (4 in 3 years) and for the first time are laying off finance people. I have been chasing permanent and contract work all over town and in the past week and am actually getting some interviews this time. Fingers crossed.

I have just had a significant birthday and am in a contemplative sort of mood this month as I look forwards and backwards and think about what sort of mark I am going to leave in the world. I went to Sydney and had a long weekend staying in the best hotel in town as a treat. However, the Rugby World Cup is on and I am putting everything on the back burner as I am enjoying the footy immensely. We are down to the final - go the All Blacks!

The Dead Hand of the RMA #2

Case #2 involved a project in shitty, poor farming country. The local farmers were ecstatic when we offered them options over their farms. Two neighbours, who were lifestylers, objected to the development - fair enough. Another party were a group of unemployed maori who were squatting about 10km up the road. We had consulted heavily with the local tribe and got their approval but this mob of squatters refused to accept the tribe's decision. Transit NZ promised to protest unless we paid for major roadworks for us to turn on/off a State Highway to our site. That blackmail cost a few million. Regional Council hearing - yes. Appeals to Environment Court.

Members of the squatter gang turn up at 1st day with kaumatua-like walking sticks in hand and demand to be heard despite not having been involved in 1st hearing. The Chair of the Court calls security and then rules they can be involved as they have special rights due to their 'love' of the land concerned! Anyone else has to have been involved in the Regional Council case to then be allowed to appeal to the Environment Court. Us skinny white boys are relieved as we could see a brawl ensuing if the decision had been otherwise and we only had briefcases to defend ourselves.

Away we go. One of the key witnesses (maori) is an expert in maori history and lore. There are a lot of local kaumatua present to hear this part of the hearing. He presents the evidence about the site. The person speaking for the maori squatters then claims the site is 'waihi tapu' (sacred). Our witness demolishes this completely. The speaker claims he is wrong because she was told by an elderly woman. We ask, "Well where is she?" "Oh she is too ill to travel." "OK," says the judge, "We will take a deposition from her." "Oh she doesn't believe in that sort of thing." The speaker than says to our witness, "Who the hell are you to tell us about our history?" Oh boy was that the wrong thing to do. He promptly reels off his whakapapa. He is related to everyone of importance in maoridom and the local tribe. The local kaumatua are going "Kia ora, kia ora" as he speaks. They recognise his right to speak on the matter and leave satisfied with his testimony. What annoys us is that if we had not had someone of his knowledge and mana, a blatant lie could have stopped our case. No evidence was ever presented to prove 'wahi tapu'.

Months later the Court rules in our favour and later also rules in our favour re costs. One neighbour says "OK you won and here is my cheque for my share of the costs." The other neighbour decides to appeal as do the squatters. We win appeal plus costs. Neighbour falls silent and as she has no financial assets, she ducks for cover. The squatters then want a further appeal. Despite being out of time to file they are allowed to continue. The points of law are laughable and are thrown out at the appeal hearing. They try again to appeal. Finally the courts say enough. Of course we never see a penny in costs.

All up, the court hearings, legal fees, expert witnesses costs etc - $5 million plus a few more million for Transit NZ.

This time we built the project. The impact of the RMA process we had undergone was threefold-

1. We had a virtual monopoly in the region as no one else could afford to build a competing facility; and
2. Our charges were higher than necessary to recover the costs of the consent process; and
3. Because of the costs of getting consents to build a competing facility and because of our level of charges, it encouraged competitors to open illegal facilities without any of the environmental safeguards we had to build in.

What a time wasting joke.

You Want to Know About the Dead Hand of the RMA?

Have heard the Greens and Goof (sorry Goff) wittering on about the proposed RMA changes. I have been involved in 2 big RMA cases and am very cynical about the whole process. It is a process designed to make lawyers rich and to keep inadequate local body planners in work.

Case 1 was a very large infrastructure project in a part of the country screaming out for both the investment and for the work it would bring. There were the usual nut cases (unshaven women in tie dresses), some neighbours with legitimate concerns and the company that would lose out by no longer having a monopoly. The company funded all the objectors to the District Council hearing. We won. They promptly appealed to the Environment Court.

Most people do not realise that cases appealed to the Environment Court are heard 'de novo'. In other words, the whole case has to be presented again as if the District Council hearing had never happened. Witnesses had to be brought from all around the world to re-present their evidence. In most other sorts of legal process, appeals are usually only allowed on points of law, not on the facts. This means that appeals (the actual hearing) are considerably quicker.

The opponent company again funded all the objectors. Their lawyers were told to delay as long as possible as every week's delay was worth over a $1 million in revenue to the opponent company. How do I know, the lawyer boasted to anyone who would listen in the bar at the local hotel and within my earshot. With that sort of encouragement, a hearing set down for 6 weeks took 6 months. And the decision? Exactly the same as the District Council hearing but $2 million later in costs and about $12 million in charges paid to our opponent over and above our proposed solution. But, by then everyone was so exhausted that despite having the consent, the project was canned.

The Shit Hits the Fan

My father was an old-fashioned accountant and he died last year at 91. Up until the last 6 months, he could read a balance sheet and set of accounts better than any one I have ever met or read. At 90 he sent me an analysis he had done on one of his investments and it was stunning. He had picked up on something that no one else in the market had figured out and I was embarrassed that I couldn't have done the same.

I have just gone through the family investments doing a monthly update and have looked at every investment really hard. At least 15% of a very substantial portfolio is now at serious risk with another 10% 'frozen' in a relatively good finance company for 5 years. My father had only lost $5,000 in 70 years of investing (Equiticorp) and has received parts of that back. To lose the amount now likely to go would have finished him off.

He would have also been distraught at the current economic disaster, having been a child in a single parent household through the depression followed by 6 years as a serviceman. Talk about a blighted life through childhood and into his 30s. While I miss him immensely, in many ways I am glad he is not here to see the current economic situation and to see so much of his hard work and thrift 'stolen' by the near-criminal management of finance companies. He would have also been worried for us kids and for my mum.

It Just Gets Worse

Just read Chris Lee's weekly article on his web site http://www.chrislee.co.nz/ Have followed him for many years since his articles began appearing in the local freebie newspaper in Wellington when I lived there. Boy he has been on the mark for so many years.

He has been a great critic of finance companies and he has been proven largely right. This week he is talking about how he had always thought the Scottish, Dutch and Swiss banks were the smartest in the world and unlikely to be ever caught out but here they are now having to bailed out by their governments. My earlier blog about how most bankers did not understand their own risk products strikes me as one of the main reason and of course greed.

I and many like me face the problem of having had our investments ruined, the value of our houses have dropped and will be unsaleable for a number of years and we will not be able to get jobs to make up the difference in income. It is starting to get very scary for a baby boomer.

The New Year

Here we are in 2009. Got a call from another division of the IT company I was contracting to and offered work for another 2 months - phew! Paying off those Xmas bills though the wife and I were very careful this year given the situation with finances and work.

The weather has been great and a break staying with friends in Wellington was just wonderful. But, the air-conditioning on my car decided to break down on the day the temperature hit 36. It was a long hot drive back home at the end of our holiday. Then I got a $1,500 bill to fix the car. Some much for 'frugal' being the theme for 2009.