What you need to know before you hire a builder or other building practitioner, and what your rights are if you are not happy with any work done.

Check before you hire a builder

When you hire a builder you need to check that they are licensed to do restricted building work on your home.

If you don’t check and your builder causes damage through poor workmanship:

  • your insurance cover might be affected
  • you may not be able to get a Code Compliance Certificate to show the work meets minimum requirements
  • you may have problems when it’s time to sell your home.

Check the builder is a licensed building practitioner (LBP) by asking for their photo ID licence card and by checking their details against the LBP public register(external link).

You can still build, renovate or repair your own home if you qualify under the Owner Builder exemption in the Building Act, as long as you meet the Building Code requirements.

Read Obligations and responsibilities of owner-builders and their building project(external link) on the Building Performance website to find out more.

For work that is not restricted, you can employ builders without a licence as long as you get any necessary consents and meet the Building Code requirements. 


Build It Right – restricted building work

Learn more about restricted building work, when it applies and who need to do or supervise it. For more information visit the Building Performance website(external link).


Building work must comply with the Building Code

All building work in New Zealand has to comply with the Building Code.

Recent changes to the Building Act that protect you include:

  • Written contracts for all residential building work $30,000 or over (inclusive of GST) are mandatory.
  • Building contractors have to use checklists and disclose certain information for residential building work worth $30,000 or more (including GST) when asked.
  • Minimum content must be included in all residential building contracts including certain clauses that are implied (including contracts that are not in writing).
  • There is information that a building contractor must give you after the building work is completed.

Know your rights

Builders, designers, carpenters, roofers, external plasterers, bricklayers and blocklayers, site and foundations (called building practitioners) are all licensed under the Licensed Building Practitioner’s scheme (LBP scheme).

You can now check an electronic register online to see if your building practitioner is licensed.

You now need to hire a licensed building practitioner (LBP) to carry out or supervise restricted building work (RBW) on a house or an apartment in a small apartment block. Ask to see their LBP card with a photo ID and to use the details to check the LBP public register(external link).

Restricted building work includes:

  • anything that influences the structural integrity (including walls, framing, foundations, floors and roofs)
  • weathertightness (anything outside of the building which prevents moisture entering your home)
  • fire safety system design (for attached houses or small apartment buildings).

This RBW scheme protects you and ensures that building work is done by competent tradespeople who can be held accountable if anything goes wrong.

There are different classes of licence for different types of building work such as design, site, carpentry, roofing, external plastering, brick and blocklaying and foundations. Each LBP is restricted to working within the work covered by their licence class, and they may be licenced in more than one class. Their LBP licence card will also state what type of building work that LBP may do.

Registered architects, plumbers and chartered professional engineers are also treated as being licensed to do or supervise certain elements of RBW.

See Choosing the right people for your type of building work(external link) on the Building Performance website for more information.


Disclosure and checklist requirements

You must have a written contract for residential building work costing $30,000 or more (including GST).

If the work is $30,000 or more (including GST), of if you ask for it, your contractor must give you:

  • a disclosure statement that includes key information including their name, contact details, insurance cover, and any guarantees they provide and for how long
  • a standard checklist with information about their contract terms, and how they will manage hiring contractors, and manage your building project.

A building contractor is a person or company you have asked to do your residential building work. They might be an architect, builder, plumber, electrician or any other tradesperson you are dealing with directly. If your contractor hires other workers to help complete your building work, they do not need to provide a disclosure statement (for example subcontractors).

See Consumer protection – disclosure and checklist(external link) on the Building Performance website to find out more.


Documentation for restricted building work

For any design work that is RBW, a Certificate of Work (COW) must be submitted with the plans as part of a building consent application. This states how the design work complies with the Building Code.

For RBW, the LBP needs to give you a Record of Work (ROW) for the council when the consented building work has been completed.

You should also keep any energy work certificates from any electrical worker or gas fitter working on their property. You’ll need these certificates when you apply for council sign-off on completion of the work.

To find out more about what building work is restricted and what is not, see Restricted building work(external link) on the Building Performance website.


Warranties under the Building Act

The Consumer Guarantees Act doesn’t cover buildings or building materials. But it does apply to services provided by the building industry such as other trades, design work and inspection services.

You are also protected by a specific set of warranties for all building work done under residential building contracts entered into from 30 November 2004 which apply for up to 10 years. These warranties apply whether you write them in the contract or not. The contract can’t state that these warranties don’t apply.

These warranties apply to work done by subcontractors employed by the main contractor. 

As well as these warranties, you have an automatic 12-month repair period from the date of completion. During this period, the building contractor will have to fix any defects that you give notice of.

If your building practitioner goes out of business, you are not protected but you may still have legal rights against the subcontractors.

Remedies for breach of implied warranties under the Building Act are similar to those under the Consumer Guarantees Act, depending on the seriousness of the breach. If the problem can be fixed, then you may require the building contractor to do so, including repairing or replacing defective materials.

See the Building Performance website to find out more about:

A building practitioner is excused from liability if the breach is caused by:

  • events beyond human control
  • accidental damage caused by others but not subcontractors or anyone that the builder is legally responsible for
  • not carrying out normal maintenance
  • not carrying out or arranging to have done repairs as soon as practicable after a defect becomes apparent.

Private building guarantees

The New Zealand Certified Builders Association and the Registered Master Builders Association provide private building guarantees which you pay for (although some independent companies also offer guarantees to cover their own work).


Payment disputes

For payment disputes, you have access to a fast and cost effective disputes resolution scheme (adjudication) under the Construction Contracts Act (CCA). The scheme also provides a payment regime for residential construction contracts. Payments can be made in instalments (progress payments) or in one single payment. Each payment claim has to have a prescribed form with all the necessary information set out in the CCA.

From 1 September 2016, design, engineering and quantity surveying work will be included under the scope of the Act.

For more information about adjudication and the payments process, see Construction Contracts Amendment Act 2015(external link) on the Building Performance website.


Misleading statements or behaviour

You have rights to protect you from misleading statements or behaviour related to products or services made by anyone in trade. You can claim for damages or other remedies under the Fair Trading Act for misleading conduct or claims made.

Read False and misleading advertising or trading to find out more.

Contact the builder first

If you are unhappy about a builder’s work or have been misled, first try to resolve the issue directly with the tradesperson.

Read Resolve a problem to find out more.


Next steps

If you are unable to resolve your issue directly with the builder, our Resolve It tool has information to help you take the next steps. These may include going to the Disputes Tribunal or District Court.

Resolve it: Builders


Need more help?

Contact us for more guidance.


 

Common situations

Unlicensed builder and shoddy work

Ange wants to get an extension to her living room. She asks around and gets a local builder to provide a quote. She doesn’t check the LBP register to see if he is licensed. He does the work and she pays the invoice. Six months later the extension is leaking in winter and she finds out the building work is not done properly and has not been consented by the Council. She makes a complaint to the Building Practitioners Board and it turns out the builder is not licensed. She will have to get a licensed building practitioner to do the repairs and try to recover the costs from the first builder in the Disputes Tribunal. She also files a complaint with building.govt.nz.

Substitution of materials

John is getting a new bedroom extension. The plans and specifications are given consent by the Council. These specify the use of timber weatherboards. However, the builder uses cheaper fibre cement sheets instead and tells John that this will save him some money. When the Council comes to inspect the final building work to issue a Code compliance certificate, the change in the cladding is a variation that required a formal approval and does not meet the approved plans. There is also the possible issue of weathertightness .

Not producing records of work

Brad has not paid the builder the final payment for his work and so the builder withholds the record of work (ROW) and does not give a copy to him or the council. Brad wants to check the ROW before he makes the payment and also ensure the council has signed off the Code Compliance certificate. Brad makes a complaint to the LBP board to get the issue resolved after reaching a standoff with the builder.