Buying a Home? Here’s How to Protect Yourself From a Leaky-Home Disaster

24 Nov

Buying a home is exciting — until you discover hidden dampness, mould, rot, or framing decay. Some buyers only learn the truth months after settlement, when the cost of repairs can run into the hundreds of thousands.
Here’s how to protect yourself.

1. Never Skip a Proper Building Inspection

A cheap or rushed inspection can be incredibly expensive later.
Your builder’s report should include moisture testing, cladding and roof assessment, window checks, guttering condition, and commentary on high-risk features.
If your inspector raises concerns — investigate further before committing.

2. Be Especially Cautious With High-Risk Homes

Extra care is needed with:

monolithic cladding (plaster/Harditex)
homes built 1995–2004
flat roofs
properties with minimal eaves
complex designs or internal gutters

These aren’t automatically “leaky homes,” but they require stronger due diligence.

3. Ask for Records — and Read Them Carefully

Request:

repair and maintenance history
past building reports
moisture testing records
prior insurance claims
consent documentation
council file notes

If something doesn’t line up, assume there is a reason and investigate further.

4. Protect Yourself With Smart Contract Conditions

It is vital for any prospective home buyer to protect their interests, whether purchasing through a private treaty, tender, or auction. Ensuring you have the necessary information and legal protections in place can prevent falling victim to a “leaky home” situation — like the High Court case involving Davinder Singh Rahal’s company, where nearly $900,000 in damages was awarded.

For Non-Auction Purchases

Whenever possible, the Agreement for Sale and Purchase should include protective conditions:

Builder’s Report
A professional builder’s report is essential. A good inspector can identify potential weathertightness issues, structural problems, hidden moisture, and cosmetic cover-ups.

LIM Report
A LIM discloses building permits, zoning, resource consents, known hazards, and council records — all critical for identifying risks.

Comprehensive Due Diligence Clause
This clause provides broad protection and allows you to investigate all aspects of the property and its surroundings.
If anything significant arises, you can decline to proceed.

Auction Purchases

At auction, the sale is unconditional as soon as the hammer falls.
There are no conditions afterwards, meaning all due diligence must be completed before auction day.

Before you bid:

obtain the builder’s report and LIM
have your lawyer review the title, terms, and documents
confirm finance approval
understand the auction conditions fully

Buying blind at auction is a recipe for disaster.

Learn More About Buying Safely

See our full guide:
https://rossholmeslawyers.com/purchasing-a-property

We Can Help

We assist you with your home purchase:

Ross Holmes http://www.rossholmeslawyers.com