By - 5 Dec 2011
In a recent decision of the Weathertight Homes Tribunal, Keven
Investments Ltd v Arthur & ORS, both claims against the vendors
were dismissed.
First claim dismissed: that the vendors were developers
The vendors had arranged to have a home built for themselves on
a property where they were also redeveloping commercial premises.
This commercial element was found to be insufficient to conflate
their role to that of a developer, rather than simply a land owner
arranging to have a home built.
Second claim dismissed: breach of vendors' warranty
This is welcome confirmation that the warranty in the Eighth
Edition of the ADLS standard agreement has been successfully
redrafted. In contrast to interpretations of the onerous warranty
in the Seventh Edition, vendors are no longer taken to have given a
blanket warranty that building work completed during their
ownership complies with the Building Code.
The Tribunal found that the essence of the warranty in its
current form is that:
- "they obtained the necessary resource and building consents
for any work done that required such consents; and
- they carried out the work in accordance with those
consents; and
- at the end of the job they obtained a Code Compliance
Certificate."
Vendors who have had building work done may still be caught out
if the work is:
- not carried out in accordance with the building consent
- proves to be defective causing damage.
If you have carried out building work, you should therefore
always seek legal advice before selling your property.
Unfortunately for the claimants in Keven Investments Ltd v
Arthur & ORS, their claim against the director of the
insolvent building company also failed. There was no evidence of
his personal involvement in the defective building work.
The Tribunal's decision in this case is under appeal to the High
Court.