As it is a little wet and cold outside (at the time of writing), in this article I want to explore the issues created by water leaks in buildings.  These issues seems to be arising more frequently at the moment.  It is not entirely clear why – it could be a coincidence, better knowledge, falling building standards or other factors.

Over the past year or two we have dealt with a number of client matters where water leaks have caused serious problems.

These matters include:

  • Landlord and tenant issues where the tenant suffered health issues and terminated the lease and sought compensation;
  • A property where a long term leak caused significant damage that wasn’t obvious; and
  • A purchaser that purchased a property that had suffered from mould and contamination from repaired water leaks.

Water leaks cause obvious physical damage that needs to be repaired.  Less obviously, water leaks can also lead to a range of expensive and complicated legal issues.

In this article I will explore some of the many issues that can arise from water leaks.  The goal, as always, is to provide information and insight in order to make you a better property investor.  This applies whether you are buying your first home or developing property for a living.

Finding the Leak

The first issue is always finding (and stopping) the leak.

Sometimes this can be tricky.  This is particularly so when the leak occurs in a multistory building.  There are often pipes inside walls and ceilings and water leaks may originate a number of levels above where the damage is visible.

In response to this there are some specialist businesses that claim to be able to trace and detect leaks.  Often these services are cheaper and more reliable than a standard plumber that doesn’t have the same level of specialist expertise and equipment.

Typically, once found, repairing the leak is a relatively small part of the problem.

Physical Damage

Once the leak is found and repaired this is not usually the end of the matter. 

Leaks, particularly if they have persisted for a long time, may have caused all sorts of damage.

Plasterboard is easily damaged by water and as a result areas of plasterboard may need to be replaced and repainted.

Long term leaks, particularly in bathrooms, can lead to significant rotting of structural timbers.  One client faced a $20,000 bill to essentially strip out and replace a bathroom because a long term leak behind the shower had caused rotting to timber studs and joists.

Mould

However, physical damage is usually the easiest part of the problem to resolve.

Water leaks can clearly lead to the growth of mould both inside wall spaces and in other areas that are not well ventilated.

This mould can be expensive to repair and remediate and can also cause significant health issues for occupants of the property if not addressed quickly.  Mould can also spread to carpets, furniture and clothes requiring expensive remediation.

Microbial Contamination

An even more insidious problem is that of microbial contamination.  A water leak can provide the right environment for bacteria to multiply and spread. 

This bacteria, if not treated, can cause ongoing health issues for occupants of the property.  There is increasing scientific literature to support this link.

In one recent case, the vendors of a property had ongoing health issues for three months before settlement.  Their symptoms may be the result of a water leak in their ceiling that wasn’t property remediated.

Allocating Responsibility for the Leak

When leaks occur in shared buildings allocating responsibility for the damage caused by the leak can be tricky.  This involves carefully assessing where the leak occurred, where the boundaries between lots are and what common property may be involved.  In such cases there may be a building insurance policy taken out by the owners corporation so the argument is really about who will pay the excess on the insurance claim.

In one recent case, the owner of the apartment where the leak originated is in the process of selling their apartment.  Can affected neighbours hold the new owner responsible – or do they have to resolve the issue before the neighbour sells?

However, this isn’t the end of the complications that can arise.

A landlord may be responsible for adverse impacts on a tenant.  This may be as simple as the tenant terminating the lease.  Or, for example, is the landlord responsible for the adverse health impacts on a tenant or damage to their belongings from mould – even if the source of the water leak was another apartment?

Another recent case raised the issue of whether the managing real estate agent should be liable for not responding to tenant complaints and landlord instructions to investigate and remedy a mould issue in a timely manner.  This resulted in early termination of the lease and claims for the cost of remediation of the tenant’s possessions.

Concluding Thoughts

In short, a little bit of water can cause serious issues – in terms of repair, treating mould and bacteria and also questions of liability.

If you face evidence of water damage in a property you own or are looking to buy hopefully you will be better informed and better able to ensure that a little water leak doesn’t become a major issue! This applies whether you are buying, selling or renting property.

If you have any leak related legal issues or other questions in relation to property law matters you can book an appointment to speak to me – click here. Like leaks – legal issues are better addressed sooner rather than later!

Lewis O’Brien