The new Building (Residential Consumer Rights and Remedies)
Regulations 2014 and the new Part 4A of the Building
Amendment Act 2013 came into force on 1 January 2015 and mean
that a written building contract is required for any residential
building work valued at $30,000.00 (including GST) or more. The
regulations also create a number of mandatory terms and minimum
'pre-contract disclosures' for any residential building
work above the $30,000.00 threshold. The new regulations are backed
up by fines which could cost contractors a minimum of $500 per
offence but up $20,000 in some circumstances.
Who is affected?
The new laws affect all contractors who carry out residential
building work (construction, alteration, demolition or removal of a
building). A contractor is any person or business who is contracted
directly by the homeowner client to do residential building work,
but does not include subcontractor agreements or design work.
'Building work' covers many different trades and is any
work for, or in connection, with a residential building or other
residential structures not occupied by people (such as retaining
walls and fences).
What are the new requirements for a contractor?
A residential building contractor is now required to provide
specific information to a client pre and post contract. A
contractor is also responsible for ensuring that the parties enter
into a written contract which includes the prescribed mandatory
terms. This means that a contractor needs to provide the following
documents for every project:
Disclosure contractor information and checklist: the
contractor information includes certain details about the building
company, the main contact person and the warranties to be
Form of written contract: a written contract
containing the mandatory terms, such as building timeframes, the
process for variations, payment and dispute resolution as well as a
1 year minimum defects warranty period, responsibility for
obtaining consents and subcontractor responsibility; and
Post completion: information and documentation in
relation to the completion of the works which includes a copy of
the relevant insurance policy, guarantees or warranties for
services, materials or products and maintenance information.
What you can do:
Contact the team at Cavell Leitch, we will discuss your needs
and can provide you with a tailored contract which can be used for
all your clients at a one-off cost. The agreement will ensure you
are meeting your responsibilities under the new laws but also
provides you the appropriate protection as the contractor. We will
also talk about how you can establish processes and policies within
your company to ensure proper disclosure and provision of
information as required under the new laws.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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