Protection for homeowners

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Key measures protecting consumers doing home building work

1. You must have a written contract for residential building work costing $30,000 or more, including GST. We recommend you have a contract even if the work will cost less, so everyone has an understanding of obligations, requirements and expectations.

2. Before you sign a contract for work that will cost $30,000 or more (including GST), or if you ask for it, your contractor must give you:

• information about his or her skills, qualifications, licensing status, and the insurance or guarantees they provide (this is called a disclosure statement)
• a checklist that outlines stages of the build and how to protect yourself.

3. Once the building work has been completed, and regardless of the size of the job, your contractor must give you certain information or documents related to the building work. These include ongoing maintenance requirements, guarantees or warranties and any ongoing insurance policies.

4. You have an automatic 12-month defect repair period when contractors have to fix any defects you’ve told them about in writing.

5. You can take action for up to 10 years if warranties in the Building Act have not been met, even if they’re not in your contract (these are called implied warranties).

6. Contractors can be fined if they don’t comply with the law.

We’ve written this quick guide to explain these measures and remind you of other important steps in the building process.

These measures relate to residential building work only.

What the law says

The Building Act 2004

The Building Act 2004 protects consumers in relation to residential building work by:

• requiring certain information to be provided before a residential building contract is entered into
• prescribing minimum requirements for residential building contracts over a certain value
• implying warranties into residential building contracts
• providing remedies for breach of the implied warranties
• requiring defective building work under a residential building contract to be remedied if notified within 1 year of completion
• requiring certain information and documentation to be provided on completion of building work under a residential building contract.

Find out more about consumer protections in the Building Act 2004 - legislation.govt.nz

The Consumer Guarantees Act 1993

The Consumer Guarantees Act applies to services provided by the building industry but not to buildings and building materials – they're covered by the Building Act through implied warranties.

The Consumer Guarantees Act says:

• tradespeople need to work with reasonable skill and competence.
• tradespeople need to fix work that isn't competently and skilfully done, at no extra cost.
• if tradespeople can't or won't fix work, building owners can get another tradesperson to do the work, passing on the cost to the original tradesperson, if it isn’t fixed within a reasonable timeframe.

Find out more about consumer protection on the Consumer Protection website - consumerprotection.govt.nz

The Fair Trading Act

The Fair Trading Act ensures people can't mislead you about products or services. It prohibits false or misleading product advertising (for example, you see an advertisement for a bathroom cabinet for $250 and order one, but when it arrives the invoice is $350).

Find out more about the Fair Trading Act on the Commerce Commission New Zealand website - comcom.govt.nz

Follow the Building Code

Remember, all building work must comply with the Building Code, even if the building work does not require a building consent.

Building work that does not require a building consent and the "Do you need a building consent" tool for homeowners has further information.