Q&As
- Student’s letter is real! Some students DO invest their loan money.
- Who can help home buyers spot a leaky home?
QI’m wondering where your ethics are in relation to “Investing Your Student Loan” in last week’s column.
I’m a student and have a student loan. As student loans are paid directly to the educational institution and the student never gets any money, I’m wondering how you imagine a student could choose to invest it.
This letter is obviously a fabrication. If it’s your fabrication then its highly unethical and I will complain to the editor.
ASteady on! The letter is real — as is every letter in this column except a few when the column first started in 1998 and one I wrote several years ago when I was researching an issue and felt readers would benefit from what I had learnt.
These days, I feel bad enough about all the letters I can’t answer that there’s no way I would make one up.
As you say, student loan money goes straight into course fees or course-related costs, although students can also borrow up to $150 a week for living costs.
But some lucky students, who have savings or income that they would otherwise have spent on courses or living costs, simply take out student loans to cover those expenses and then invest the savings or income.
While the actual dollars invested might not be loan money, there’s just a money-go-round in the middle. In effect, they are investing their loans.
I don’t think anybody knows how many people are doing this. But I’ve had several letters from people who do, and I know of others.
QIn your 26 February column you suggest to a woman that she should allay her concerns about purchasing a leaky building by getting the house valued. You say that the valuer “should find any potential problems”.
This advice is flawed on two counts, based on my experience as a lawyer with many years experience who has acted for home owners in leaky home disputes and for valuers in other types of disputes.
Firstly, valuers include routine disclaimers to the effect that their valuations are not surveys, are based on what can be seen and assume that the house is sound.
Many valuers now include exclusions which exclude any liability for failing to detect that a building is leaky. These are quite justified as the purpose of a valuation is not to detect building defects.
Secondly, “leaky building syndrome” is an insidious problem. Most people are unaware, sometimes for many years, that their home is leaky.
This is because the leaking that causes the damage occurs in the space between the interior and exterior walls, rotting the framing timber.
There often are no, or few, signs of the leaking visible to the lay person until the problem has reached a really advanced stage.
Furthermore, visible signs such as damp interior walls are easily camouflaged by wily vendors who simply move furniture to cover the affected area or sell in summer after carrying out a cosmetic paint job.
Such properties change hands on a regular basis, and sellers will usually have no liability to the purchasers unless the sellers were the developers of the property.
The person who wrote to you is quite right to worry about purchasing a leaky home. There are many thousands of such homes in Auckland.
Anyone thinking of purchasing a home with monolithic appearance cladding (stucco plaster, textured fibre cement or similar) should proceed with extreme caution, particularly if the house was built between 1996 and 2004 when untreated timber framing was likely to have been used.
Such a person should, before committing to the purchase, obtain a clean report from a building consultant with qualifications in weathertightness issues. A valuation is no protection whatsoever from leaky buildings.
AMany thanks for pointing this out.
I based my comment on comprehensive valuer’s reports that I have seen, but I should have checked further.
According to Glenda Whitehead of QV Valuations, “Our reports do have exclusions. Our brief as a valuer is generally perhaps more narrow than you may have realised.
“As an industry we are very aware of the issues, and our inspections are intended to pick up some problems. But I agree with your writer that a visual inspection is not always adequate.
“If we’re at all concerned about a property, we recommend that you get a qualified engineer to undertake a full inspection, including moisture tests etc. As pointed out, this is a complex issue,” says Whitehead.
It’s quite possible, though, to be overly cautious. If you’re considering buying a house that is not of the worrying type, a clear valuer’s report — and a discussion with the valuer about possible leaks — may be enough.
After all, you could go on forever checking a property for everything from soil stability and contamination to water pressure in the shower to how cooperative the neighbours are, and never end up buying anything.
I’m not belittling the leaky building problem. It must be horrendous. But it seems mad for someone to be afraid to buy any house because of it. The next letter helps put this in perspective.
P.S. Would it be cheeky for me to point out that only a lawyer would say, “…include exclusions which exclude…”?
QAs an architect nearing retirement I was interested in your answer to the correspondent who feared buying a leaky home.
In my experience a typical valuer’s report would provide little worthwhile reassurance. To quote from a recent valuer’s report copied to me, “I could see no obvious faults … (but) … this report should not be construed as a structural survey.”
Nor are all house inspection reports of much real value. It depends on who does them.
My preference is for Members of the NZ Institute of Building Surveyors, but they are nearly all busy on (guess what?) leaky building reports — which can be expensive.
More encouragingly, most houses do not have costly leaks.
A few pragmatic hints my help: Beware of older houses if they have changed hands too often; be very cautious about plaster finishes (of many types), and over-complex designs, decks built over rooms below, and sites exposed to strong winds.
But thousands of conventional weatherboard and brick clad houses in our suburbs of course continue to give good service.
AThanks to you, too.
It’s lovely to see professionals taking time out to help the rest of us.
No paywalls or ads — just generous people like you. All Kiwis deserve accurate, unbiased financial guidance. So let’s keep it free. Can you help? Every bit makes a difference.
Mary Holm is a freelance journalist, a director of Financial Services Complaints Ltd (FSCL), a seminar presenter and a bestselling author on personal finance. From 2011 to 2019 she was a founding director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to [email protected] or click here. Letters should not exceed 200 words. We won’t publish your name. Please provide a (preferably daytime) phone number. Unfortunately, Mary cannot answer all questions, correspond directly with readers, or give financial advice.