Leaky buildings?

[joe90]

Hey everyone

Ok so Agents now have to tell you when buying an apartment if they know a building is leaking, right.

But what are the apartment buildings in Auckland City that are leaking or have structural problems? Cause I really don't think the agents are going to still tell the truth.

Anyone know of any leaky apartment buildings in the city?? I am looking at buying apartment's, having a little trouble trying to get something that even touches 6-7% return, that isnt a matchbox but will get there.

[eri]

there's 20-40 pages of stuff on ak apartments in about 5? threads

search for them under "auckland"

and "apartments"

[joe90]

Will do thanks allot. Please see my other Thread

Im new here.

[mortgage broker]

Look at the bodycorp notes when buying an apartment.

[Keithw]

A couple of things to be aware of should your purchase result in a leaky building claim:

Let me tell you from very recent experience with a leaky building claim, that council and builders lawyers look very closely in the body corp minutes for anything that mentions water or moisture or design issues.
If the minutes mention anything along those lines, the lawyers will attempt to say that you were aware of leaky building issues when you bought and so have contributed to the "Loss".

The point at which any water or design issues are begun to be discussed (regardless of whether they seem to be leaky building issues or not) will also be claimed as the starting point, ie the point at which you became aware of an issue, and hence have 6 years to make a claim from that point. So make sure you review minutes for at least 3 years for any signs.

As an additional fighting point they say that any building purchased after late 2002 was done so in the knowledge that leaky buildings in NZ are an issue, so you must demonstrate that you took reasonable precautions, ie a building inspection & a LIM.
Failing to do so is also contributing to "the Loss" should you be making a claim

For both of these types of issues there seems to be an expectation on their behalf off a deduction of 25% of the claim !

Further, the council is still trying to push for the idea that they owe no duty of care to a landlord, since they (LL) are running a "Commercial operation". This issue has been to the Court of Appeal in the Sunset & Byron Ave case, & the council lost, but has now been taken to the Supreme court. It would be a devistating ruling for all landlords should it ever be won. It would mean no claim for a leaky building if you are a landlord !!!


Look very carefully at whatever you are thinking of buying, whether an apartment or free standing

[SwissKiwi]

having a little trouble trying to get something that even touches 6-7% return,

I'd think you would want a higher return on that with apartments.

Apartments are not my area but I've managed 8.5% on free standing central auckland property this year - surely you should aim higher in the apartment market where you are only buying a tiny fraction of a piece of land - which you have very little control over.

[muppet]

Most councils agree to leaky home package

Jazial Crossley | Wednesday October 20, 2010
Minister of Building and Construction Maurice Williamson said most councils had agreed to the proposed leaky home rescue package that detailed they pay 25% of the repair cost for houses in their region.
The rest of the repairs would be paid 25% by the government and 50% by the homeowner and could only be accepted if homeowners agree not to sue.
“The government has no legal liability to the owners of leaky homes, but the scale of the weathertight issue is such we are stepping in to ensure home owners have a fair solution that lets them get on with their lives,” Mr Williamson said.
Councils who had joined the programme so far had about 90% of homes expected to lodge repair cost claims within their constituencies.
“Their participation will be a win for their ratepayers as well as the councils because the package doesn’t require complex, time-consuming and expensive litigation, leaving more dollars to be spent on actual repairs,” Mr Williamson said.
Home owners are under no obligation to use the scheme, and the Weathertight Homes Tribunal will continue.
http://www.nbr.co.nz/article/most-co...package-131903

[joe90]

Hmmm this really concerns me, does anyone know of a really good Lawyer who is experienced in buying apartments Auckland CBD, and know more of the in's and outs of apartments with regards to leaky and structural problems. Has anyone heard about the Heritage Hotel (old farmers building) Manhattan, H47 apartments leaking??

I am looking at 2 apartments at the moment, I will post what I paid, if I end up going through with buying an apartment etc Rent and return, I think this would be interesting for everyone to know, and then you can tell me if I paid too much haha. Im from a more of a house background weather board homes nice and solid, whack a board if there's rot haha, but thinking apartments are better as long as they don't leak and cash returns etc.

Thanks

[joe90]

Hey and thank you everyone for posting this is awesome.

I hope someone who is considering buying into the Auckland cbd apartment market is reading these Post's too. I remember meeting a couple from Hamilton who had worked there whole lives slaving on their farm in Hamilton, they bought an apartment in the St Marys Bay apartment complex behind Belmount Quarter's, forget the name of the building, very ugly building, you could stand on the street and look up and see the penthouse level apartments with no gib on the ceiling's, cause they had been gutted, but it was so leaking so bad they had to turn the power off for the apartment, so when you walked into the apartment itself there was no light, and you had to use torches to see things, the carpet had been ripped up and the mold was growing up the wall they were stuck with a leaky apartment and a mortgage, and no possibility of renting the apartment out, it was not cool to see hard working Kiwi's getting stuck with a problem at their age like a leaky apartment complex. But it also shows you need to be very very cautious of the Sharks in the pond. And maybe that some of NZL's apartment development's just are not up to international standards yet as the building was only 3ish years old?

[eri]

hi joe,
i don't think a conveyancing lawyer is going to research the building for you as part of their standard fee, they might for an extra $200 and hour but you can do this stuff yourself

as mentioned earlier you want to get and read as many previous BC minutes as you can get from the agent

and as well as that you should contact council 1 of these 3 ways

1. for free - call their "weathertightness? section" and give them the apartment building address. they should then be able to pull up the building's files on their computer give it a quick scan for any issues. like leaks work being undertaken etc. and if the building has a full code of compliance

2. for $16 - go in to council and view the buildings file on their computer

3. for $60? - get a copy of the buildings file on cdrom to view on your own computer. this disc you can take to a builder etc if there is stuff you are not sure about

this stuff is mentioned in greater detail in previous threads that should show on searches

of the 3 you mentioned i would go for h47

[WGN ex-property manager]

Auckland is not my market, but even in Wellington (where apartments have had fewer issues) I generally advise people to look at high yielding home and incomes properties in the outer CDB fringe suburbs. Yields are the same, risks are lower, and capital gains are higher.

If I operated in Auckland I would only touch apartments at comedy level discounts of market value, and even then I'd probably run away because of the leaky building risk.

Q. If a building has started to leak, but no-one has noticed yet, what possible Due Dilligence can you do to protect yourself? Or what if the cladding is defective, but hasn't let go yet.... and begins to leak next year?

[joe90]

Hey Everyone I have decided Apartments are just not worth the land they are built on haha, good returns but you cant protect yourself from the leaks that eventually happen, 5-10 years down the track. So I have decided to stick to houses more expensive but if the tin roof leaks its on a tin roof leaking. If that makes sense. But I am looking at the below what do you guys think?


Home and Incomes....... I have noticed a huge increase in H+I's for sale, I am currently looking at this one for sale, 2 houses one site one title , RV 625K and vendors wanting silly price way above RV rental of $790 per week. Can I ask what do you guys think the sale price should be? Agent (yay gotta love them right?) has said they will only look at offers above RV. This is my first major rental investment so I am a bit confused about which price would be the best to put down on the property?

[[email protected]]

Joe90 - A standard for property investors over the years has been blocks of flats. Between 3-10 in a block and most often are purchased individually. Many of these are more than 20 years old so no leaky homes issues. Often maintenance issues and fixing up to do. But in most cases you get what you see. Not these issues that you cant see. Yields are reasonable generally, always over 6% often a lot better.

[One]

Multiply the $790 rental by 50, subtract rates, insurance, management fees unless you'll DIY, at least $4000 for maintenance, and any other costs you can think of.

That gives you annual before tax income.

You want that to be more than the interest cost of a 100% mortgage. How much more depends how much you want to gamble on interest rates staying low.

From that, calculate your offer price.

They may laugh at you - if so, you can just walk away and see if they negotiate later.

[WGN ex-property manager]

Can't comment on other markets, but in Wellington you should look for a gross rental yield of:
7% if its a quality dwelling (ie the "home" might appeal to an owner occupier one day when you sell it)
8% if its more like 2 flats
9% if its got flaws that are hard to change (like no sun, bad access, no parking etc)
10% + if its a block of flats - as these tend to be in high tenant "management overhead" suburbs.