New Zealand Back to Real Estate News Homepage to RSS for this country

NZ Property News

NZ $6m to fix leaky high-rise

Property Here - Tuesday, May 21, 2013

Share to:

Owners of the 97-unit twin towers must pay up to $75,000 each after Mainzeal collapse.

Raj Sharma invested his life savings in an apartment at Hobson Gardens and has paid thousands in legal fees over the leaky building. Photo / Michael Craig
Raj Sharma invested his life savings in an apartment at Hobson Gardens and has paid thousands in legal fees over the leaky building. Photo / Michael Craig

Each owner of leak-struck twin tower high-rise Hobson Gardens faces paying $50,000 to $75,000 to get their unit fixed after the collapse of Mainzeal Property & Construction.

Ratepayers could be stung a second time by the owners who got a secret Auckland Council settlement and are now suing the council again after the fix-up went wrong, internal documents show.

Repairs costing about $15 million to the two-tower 97-unit block at 205-215 Hobson St near Spaghetti Junction were well under way in February when Mainzeal collapsed, leaving the owners in the lurch. Mainzeal built the defective blocks and was being sued around 2011 but an eleventh-hour deal stymied court action. The company returned and a new exterior facade and joinery was being applied when the Waitangi Day receivership was announced.

Owners are seeking another contractor to finish work on the towers where some scaffolding remains and forced sales are threatened because some owners are impoverished.

At least one owner is begging the body corporate not to sell his apartment because he cannot raise the $70,000 demanded. A newsletter sent to owners after a meeting last month spelt out the seriousness of the situation.

"Each of us will need a substantial amount, somewhere between $75,000 and $50,000. The final vote empowered your committee to proceed with a further levy, enough to get the building completed," said a newsletter from body corporate chairman Peter Till.

Owners have quotes showing repair work would cost $6 million but a further $400,000 is being sought to take on a legal battle against various parties including Auckland Council.

"We have got a good case against the parties we took action against previously, including the council," the newsletter said in reference to an earlier confidential multi-million dollar settlement over building approval for the block.

Raja Sharma invested his life savings in an apartment after immigrating with his wife. He has complained about spending thousands of dollars on legal and other fees to fix his place.

The owners' court case against the council and others is due to be heard early next year. They have engaged Matt Josephson of lawyers Grimshaw & Co to take the council to court and architects Peddle Thorpe are managing the tender for a new contractor to fix the block.

Repairs will take about six months, owners were told.

BNZ and ANZ have indicated they can lend for repairs "provided the individual's circumstances were reasonable. They know that we are a substantial group of people," the newsletter said.

The building has been made watertight and will "keep us secure for a limited period" and owners have until the end of June to pay the body corporate so works can resume. Work will restart around August.

"All of our property values are decreasing markedly - the latest council valuation [is] about 30 per cent of the value it would be for an equivalent unit in good repair."

Materials which Mainzeal was to use are in warehouses and containers, the newsletter said, and the new contractor could buy that.

"The building definitely still leaks," owners were told.