Worried About the Mesh in Your Foundation? GUEST BLOG - Carmel Jagger
WHEN I HEARD ABOUT THE ISSUES WITH MESH I WAS WORRIED..
I am like most of you, a homeowner that has had to face the issues with insurance and obtaining my entitlement. I have managed to achieve that and had a new home built as a result. It was a long hard battle and it was absolutely exhausting.
So when I heard about this issue with E500 Mesh I was worried. Here is what I understand.
If you had a new slab foundation laid between early 2012 through to early 2016 then you are right to be concerned about the standard of steel mesh used.
One of the first things to know is the Commerce Commission issued a “STOP NOTICE” on three steel suppliers in March and April of 2016. The three suppliers are:
- Brilliance Steel
- Euro Corp
- Steel & Tube
Each of the three companies signed enforceable undertakings with the Commerce Commission whereby they could continue to market their product once it had passed testing via a IANZ accredited laboratory.
The testing follows a prescribed format which is expected to form part of a future MBIE clarification on standardisation. The purpose of the testing methodology is an attempt to ensure a uniform approach within the industry.
All test results are to be forwarded to the Commerce Commission, and their investigation is ongoing. (http://www.comcom.govt.nz/fair-trading/enforcement-response-register/?start=20)
Fletcher Building and United Steel passed testing and are not part of the investigation.
WHAT ABOUT THE BUILDING CODE?
MBIE has advised that houses with foundation slabs containing steel mesh which does not meet the required standard still meet the Building Code. This is because those homes still conform with structural and life safety requirements of the Building Act.
As a homeowner it pays to be aware that the Building Consent Authority does not have an obligation to check compliance of materials and issues a Code Compliance Certificate irrespective of the standard of the steel used.
WHAT ABOUT MY INSURANCE?
Private insurers issue policies once Code Compliance is achieved. So what does this mean for property owners with the sub-standard mesh?
Despite having an insurance policy your insurer can rely on an exclusion clause in your policy. This is a clause that means defective materials are not covered by the policy.
Tim Grafton (CEO Insurance Council of New Zealand) made direct reference to this during an interview on Radio New Zealand. Mr Grafton stated “if there’s a severe earthquake that damages the slab … your insurer will not pay for damage to the slab”. He further stated policy holders “should” contact their insurer directly.
It seems clear to me that homeowners should not ignore this risk in the hope it will go away and won’t come back to bite us on the proverbial.
MBIE’s apparent sole concern, in my opinion, is about meeting the requirements of the Building Code. If you ask me this misses the point! To me the point is insurers can refuse to cover damage to foundations in a future earthquake event using the defective materials clause as their ‘get out of jail card’.
As many of us know there is a clear obligation on the part of ALL policy holders to disclose pertinent information to their insurer. This means at some point, if your home has steel supplied from one of the three companies in question prior to the enforceable undertakings being given, this information may need to be disclosed to your insurer.
One question that comes to my mind is at what point are we fairly obligated to disclose this information to our insurer when the facts are not fully known and/or verified? The Commerce Commission investigation is still ongoing and we have no knowledge whether the outcome of the prescribed format for testing is showing uniform results. Without this information can we be sure the failed tests are in fact accurate? This question is one for the legal fraternity to answer and individuals may wish to get their own legal advice.
In the meantime, I think it prudent that individuals obtain information from their builder to evidence the source of the steel used in their foundation i.e. copies of invoices from the company providing the steel and written confirmation from that company stating which manufacturer supplied the steel used.
NOTE: Steel Mesh Class Action