Buyer’s rights

I am settling a new build in two days’ time and tenants are moving in immediately after. When the building inspector went back for a final check, he found the new kitset shower had a small leak. We advised the seller’s lawyer it needed to be fixed, even though it had been signed off by the council. The recommendation from the inspector was to remove the shower and reinstall it properly. The construction manager stated he was a master builder repairer and knew what he was doing. He said it was not uncommon for new showers to leak sometimes. He said the repair process was putting sealant around the shower with patching applied around it to complete waterproofing. I am concerned this leak popped up on the second and final inspection. What are my rights if the shower is still leaking six months down the track? 

A

Your rights are mainly set out in the Building Act 2004 and in the agreement for sale and purchase (ASP) that you entered into for the purchase. There are implied warranties set out in section 362I of the Building Act where you enter into a contract for the construction of a residential building or a contract to buy a residential house from an “on-seller” (which is essentially a developer who arranges for the house to be built with the purpose of selling it). While we do not know your exact contracting arrangement it is likely that the Building Act warranties would apply to your situation. If this is the case, there would be warranties implied into the ASP that the vendor will have carried out (or have arranged for the work to be carried out) in a proper and competent manner and with reasonable skill and care, in accordance with the plans and relevant consent, and in compliance with the building code. If the shower begins to leak six months after settlement, then that may be because of a breach of one or more of the warranties above. Where those warranties have been breached, you are able to give the vendor a chance to rectify the issue and, if they refuse to do so, arrange to fix it yourself and recover the costs from the vendor.

What the appropriate fix to any defect is depends on the circumstances of each case. Sometimes a repair will be possible and other times a full replacement of the defective works might be required. You may also be able to claim other consequential damages such as the loss of any rent during the period of the repair. If the vendor does not agree to carry out the works or pay for the cost of doing so, then you can file a claim in the Disputes Tribunal to seek to recover the costs. The Disputes Tribunal has a limit of $30,000 it can award (if it is above that, a claim in the District Court would be required).

Shane Campbell
wynnwilliams.co.nz