A month-old insurance package aimed at keeping leaky homeowners in the market has Bay of Plenty builders in the signing up process.
The WaterTight Warranty guarantees repairs made to leaky homes.
The warranty costs, but it can add $100,000 to the value of a formerly leaky home, says Builtin managing director Jim Rickard.
Builtin NZ is the company that administers the independent warranty. “It covers the repairs up to $500,000,” says Jim.
“If it’s $200,000 you are talking about $3500 for the guarantee, if it’s $500,000, it’s about $8000.
From their research, the real benefit is the new buyer of a formerly leaky home knows the repairs have been done and if there are any problems the new owner can get it sorted out.
“It’s helping keep those house prices up where people ideally want them,” says Jim. “Even people who don’t have a leaky home are struggling to sell them because they look leaky.
“We know from overseas experience that a home with a warranty is going to sell and a home with a warranty is going to sell for more than one without it.
“We are talking hundreds of thousands – for a big home in Auckland we are talking another $100,000 to the value of a house.”
Builtin is Tauranga based, in the same building as Certified Builders.
The company has a close association with Tauranga and the Bay of Plenty area.
There is one Tauranga builder signed up and two more going through the application process, says Jim.
A requirement is builders have to have experience in undertaking remediation work, they have to be a licensed building practitioner and they have to be financially stable.
“With the amount of homes out there that will require repair work, there are going to be companies and individuals offering to do this work who aren’t qualified, and who won’t be around in two or three years when their works fails,” says Jim.
“That’s why having an independent warranty from an investment grade rated insurer should be an essential part of every homeowner’s repair plan.”
The number of leaky buildings in New Zealand is between 42,000 and 110,000, with a potential cost of up to $23 billion.
Until now, owners of leaky homes have often been unable to re-sell because of the associated risk, or are forced to sell at substantially reduced prices.
Real estate agents and sellers are finding that even homes assessed as not being leaky are struggling to attract buyers, if they are of a style associated with leaky buildings – typically including those with monolithic, plaster-based cladding.
Other design features associated with leaky buildings include Mediterranean styling, parapet or flat roofs and closed balustrades.
“Since the launch last month we’ve had daily enquiries from both builders and leaky homeowners interested in how the warranty works,” says Jim.
“We expect to extend coverage of the warranty to other regions, in particular the Waikato, Queenstown and Canterbury, in the coming months.”
One of the first builders granted approval to offer the WaterTight warranty is Platinum Pacific Reclad Limited, a specialist in weathertight remediation work across Auckland and the Bay of Plenty.
“There are plenty of cowboys out there claiming they can do this work, so for us, being a WaterTight Approved Builder is a mark of quality in the work we do,” says company owner Martin Bamford.
The warranty’s insurer is CBL Insurance Limited, a Standard and Poor’s rated company with nearly 40 years of experience underwriting builder warranties.
CBL has more than a million homes under warranty worldwide, including almost 10,000 in New Zealand under its Homefirst brand.