Leaky Building
A building that suffers from moisture ingress through its exterior envelope, leading to hidden rot and structural damage — a widespread problem in New Zealand known as the leaky building crisis.
What is a Leaky Building?
The leaky building crisis is one of New Zealand's most costly construction failures. Between the mid-1990s and mid-2000s, an estimated 22,000-89,000 homes were built with defects that allowed water to penetrate the building envelope and rot the timber framing from the inside out.
The crisis was driven by several converging factors: the adoption of monolithic cladding systems without adequate drainage cavities, the use of untreated kiln-dried timber (which was more susceptible to rot than the previously used treated timber), fashionable design features like parapets, balconies, and complex roof-wall junctions, and a regulatory environment that permitted these practices.
The government established the Weathertight Homes Resolution Service (WHRS) and the Financial Assistance Package (FAP) to help affected homeowners. However, many homeowners still faced repair bills in the hundreds of thousands of dollars. The total cost to the country has been estimated at over $11 billion.
Why It Matters for Due Diligence
Buying a leaky building unknowingly can be financially devastating. Full remediation — stripping the cladding, replacing rotted framing, installing new cladding with proper drainage — typically costs $150,000-$500,000 or more. Some properties are so badly affected that demolition is more cost-effective than repair.
Be especially cautious with properties built between 1995 and 2005 that have monolithic cladding, Mediterranean-style design, flat or low-pitch roofs, or internal gutters. Always get a specialist weathertightness assessment for any property that shows risk factors. Check for WHRS claims in the LIM report.
How to Check
The LIM report will show any Weathertight Homes Resolution Service (WHRS) claims lodged against the property. Commission a pre-purchase building inspection with specific weathertightness focus. For high-risk properties, request invasive moisture testing. Check the building consent history for any remediation work. Ask the real estate agent and seller directly about any known weathertightness issues or past repairs.
Frequently Asked Questions
Should I avoid buying any house built between 1995 and 2005?
Not necessarily. Many houses from this era are perfectly sound. The highest-risk properties are those with monolithic cladding (plaster-style exteriors), flat or low-pitch roofs, parapets, internal gutters, and complex roof-wall junctions. Houses with brick, weatherboard, or other traditional claddings from this period are generally lower risk. Always get a professional inspection regardless.
Has a leaky building been remediated, is it safe to buy?
A properly remediated leaky building can be a good purchase — the cladding and framing have been brought up to modern standards. However, verify the quality of the remediation: check that building consents were obtained and CCCs issued, review the scope of work, and confirm it was done by reputable contractors. Get an independent inspection of the remediation work.
Related Terms
Weathertightness
GlossaryA building's ability to prevent water from entering the structure through its exterior envelope — the roof, walls, windows, and other external elements.
Monolithic Cladding
GlossaryA type of exterior wall cladding that presents a seamless, plaster-like finish with no visible joints — strongly associated with New Zealand's leaky building crisis.
Remediation
GlossaryThe process of repairing, restoring, or cleaning up a building or land to fix defects, remove contamination, or bring it to a safe and compliant standard.
Code Compliance Certificate (CCC)
GlossaryAn official council certificate confirming that completed building work meets the requirements of the building consent and the Building Code.
Building Code
GlossaryThe New Zealand Building Code — a set of minimum performance standards that all building work must meet, covering structure, fire safety, moisture, energy efficiency, and accessibility.
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