Building failures do not settle and disappear. They compound, through levies, litigation and unsellable risk, and the St Lukes Garden Apartments case is the clearest illustration yet of what that does to the people holding the title.
Two owners at the 285-unit Auckland complex have just lost a High Court conspiracy case and been hit with a $636,000 demand for unpaid levies, plus six-figure court costs. They bought their unit in March 2013 and later received $273,937 from a 2019 Auckland Council settlement. Escalating repair costs swallowed that and kept going. Some owners at the complex now face individual repair bills of up to $800,000.
The couple argued the body corporate, previous owners, lawyers and their lender ran a deliberate scheme to conceal weathertightness problems ahead of their purchase. Associate Judge Liz Gellert rejected the claims in a June 2026 judgment and, on the court costs risk she had warned them about, noted that “that risk has now materialised”. Their verdict on the ordeal: “They’ve destroyed us completely.”
A repair bill that tripled
The scale is unprecedented. The total repair bill now exceeds $240 million, the largest leaky building remediation in New Zealand history. The escalation tells its own story. According to the December 2025 High Court decision in Body Corporate 346086 v Chan, the original estimate was $85 million. The first tender pushed stage one to $120 million. By November 2022 the figure was $195 million, driven by post-Covid building cost inflation, and by 2024 it hit $240 million.
Stage one alone took more than four and a half years, two years longer than planned. The full project is not expected to finish until 2027. When levies could no longer fund the work, the High Court appointed Deloitte as administrators to arrange external finance. Earlier invoices issued to owners in two blocks ranged from $135,000 to $196,000, payable within six weeks. That is the kind of number that changes the economics of apartment ownership overnight.
The reform that skips the buildings that need it most
This is the backdrop against which the government is reshaping who pays. In August 2025 Cabinet agreed to shift the building sector from joint and several liability to proportionate liability, reducing homeowners’ ability to pursue councils as deep-pocket defendants when builders and developers have vanished or gone bust. The accompanying MBIE Cabinet paper released in November 2025 proposes mandatory home warranties, compulsory professional indemnity insurance for designers and engineers, and higher penalties for licensed building practitioners.
The critical catch: the mandatory warranty regime is proposed only for buildings three storeys and under. Multi-storey complexes like St Lukes, the exact type that produces the biggest and most catastrophic failures, sit outside the scheme entirely. The government is narrowing council liability while leaving the highest-risk buildings least protected.
Herald Wellington business editor Jenée Tibshraeny has warned that the reform depends on insurers and warranty providers actually entering a small, high-risk market they have historically avoided, and that the government has sought power to pause making cover mandatory for up to four years. Homes built in that window could be completely exposed. Specialist lawyers have gone further, raising the prospect of “ghost buildings, abandoned by their owners” unable to fund repairs.
The cost that is easy to underestimate
The financial toll of building defects is systemic, not exceptional. A 2018 MBIE research report analysing 440 cases from 2008 to 2018 found an average claimed amount of $1.487 million, estimated 8,800 total disputes, and roughly $332 million in shares that could not be collected because liable parties had disappeared. Simple extrapolation put total estimated damages across the decade at $9.2 billion.
For apartment investors and body corporate managers, the real lesson is about deferred maintenance. As remediation specialist Craig Birch of Context has argued, decades of keeping levies artificially low created a break-fix culture where “the true cost of a leaking building is rarely the repair bill itself, it is the massive loss of equity caused by declining saleability and value”. The Unit Titles amendment requiring 30-year long-term maintenance plans, in full effect since May 2024, is forcing that reckoning.
St Lukes is the extreme case, but the mechanics apply everywhere. A settlement is not a full stop when repair costs keep climbing, levies keep landing, and the pool of parties you can chase keeps shrinking. Buyers of apartments in older complexes are inheriting yesterday’s failures, and the incoming reforms do not close that gap for the buildings most likely to fail.
Sources
- St Lukes Garden Apartments owners lose leaky building conspiracy case, face $636k levy bill (2026-07-22)
- Leaky homeowners at St Lukes Garden Apartments face invoices of up to $195k after repair costs blowout
- Leaky home lawyers fear mandatory warranties on new builds won’t be enough to protect home owners
- Major Building Act reform isn’t weathertight and risks leaving homeowners exposed
- Building Remediation: Why Patch-and-Repair Is Now a Risk