Leaky Buildings: The Application of the Consumer Guarantees Act 1993

Abstract

In recent years there has been a mounting concern about the damage caused to New Zealand houses and apartments by water penetrating the outside cladding and becoming trapped. The media have coined the term “Leaky Building Crisis” to describe the problem.

This article examines the homeowners’ rights of redress for a leaky building under the Consumer Guarantees Act 1993, an Act which provides consumers with rights of redress against suppliers and manufacturers for non-compliance with a set of statutory guarantees. It concludes that the Act offers a high level of consumer protection but only applies to a portion of owners of leaky buildings. This limitation in the coverage of the Act is of considerable concern and cannot easily be justified on policy grounds.

Keywords: leaky, building, defect, product, service, consumer, guarantee, warranty, redress, suppliers, manufacturers, non-compliance, statutory guarantee, protection, consumer, policy, building law, building

JEL Classification: L74, L7, N67, K00, K11, K12, K13, K19, K2, K20, K23, K29, K32, K39, K4, K42, K49, K40