Remediation

Leaky-building fixes must claw back value

15 February 2018

Leaky buildings bring misery to homeowners. But a fix done the right way – technically excellent, and market aware – can more than double the pre-remediation value of a home with weather-tightness problems.

The leaky-building crisis will run for some years yet. Many cases are still in the courts and only a fraction of the affected homes – some estimates put the number at 110,000 and the likely repair bill at $30 billion – have been fully fixed.

Homeowners who get a leaky-building diagnosis face significant costs – $200,000 and upwards per apartment in multi-unit complexes aren’t unusual – and what can be years of difficult decisions.

In the multi-unit complexes Context fixes, the body corporates have to navigate legal, insurance, and financial issues. A key early-stage decision is who to take advice from on the best way to fix the problem. This might seem straightforward - just a case of finding qualified professionals who can fix the damage and the leaks. But many bodies corporate tell us that advisers have very different approaches – and most do little to address the market value of post-fix properties.

Value-improvement is a key pillar of our approach. One recent project is a case in point: when the complex got its leaky-building diagnosis apartment values averaged $300K, but this more than doubled, to $700K, when our work was done.

This kind of increase doesn’t happen by chance. Our approach, born of solid experience of remediation projects, marries building science and construction know-how with smart design to ensure that all work that needs to be undertaken contributes to a new and improved building design. We believe it delivers the best possible results for bodies corporate and individual owners; it's not painless, but it is worth it.

We urge bodies corporate to grill potential advisers on how their remediation-strategy will affect value once the scaffolding is down and the last coat of paint is dry. And how they will ensure every last piece of poor design and workmanship that led to the leaks in the first place are resolved.

Finally, as our article on the broader leaky-building subject puts it, make sure you pick advisers who are people you like and trust. It’s likely to be a long and bumpy road so you want a team you can work with, one that will tell you the truth in a language you understand.