Thinking of building or renovating? The Building Amendment Act
2013 now prescribes what information must be contained in a
building contract, what information must be disclosed to a consumer
and other new consumer protection measures. Make sure you are aware
of these changes before signing on the dotted line.
In the wake of the leaky house crisis and the increase in
building activity in major centres such as Christchurch and
Auckland, the residential building sector has come under the
In response to this, Parliament reviewed the Building Act 2004
The review identified the need to, among other things, clarify
the responsibilities of builders to consumers and better equip
consumers to transact with confidence for building work.
On the completion of the review, the Building Amendment Act 2013
(the Amendment Act) was passed by Parliament on 27 November
The Amendment Act introduces new consumer protection measures
and provides incentives for the building sector to improve their
accountability to consumers. Prescribed information must now be
supplied to consumers throughout the building process aiding
consumers to be better placed to make informed decisions about what
builder they use to complete the work.
The consumer protection measures provided for in the Amendment
Act came into force on 1 January 2015 and include:
The supply of prescribed information before a residential
building contract is entered into.
Mandatory written contracts for residential building contracts
over $30,000.00 (inclusive of GST) or more.
A checklist to be provided to the client of a residential
building contract where work is valued at over $30,000.00
(inclusive of GST) or when requested by a client.
Minimum content requirements that must be included in all
residential building contracts.
Implied warranties for residential building works.
Information that a building contractor must provide to a client
after the completion of building work under a residential building
Defective building work to be notified and remedied within 1
year of completion.
Providing remedies for breaches of warranties
Infringement fees for breaching the contract, disclosure or
Consumers will greatly benefit from the additional transparency
and supply of information.
This added transparency may avoid disputes between parties as
many building contracts will now be in writing allowing both
parties to have a better understanding of their rights and
obligations under the contract before the commencement of work.
The period you have to notify the builder of any defects after
the completion of building work, commonly known as the "defect
period", is now 1 year as opposed to a different period set by
each individual builder. If a defect is discovered, a builder is
now under an obligation to inspect and remedy a defect in a timely
manner which should go some way to reduce the length of time a
consumer has to wait for the defect to be remedied and requires the
builder to engage with consumer.
The Amendment Act also sets out remedies where there is a breach
of the provisions Amendment Act providing consumers with a clear
course of action should things go wrong.
The provisions in the Amendments Act cannot be contracted out
of, meaning that consumers must get the same information from all
builders and building companies allowing them to easily compare the
While regulation will not fix all of the issues within the
building sector, it does provide incentives for building
professionals, tradespeople and consumers to behave in ways that
will contribute to a productive efficient and accountable
Over time it is hoped that the provision of information will
steer consumers away from the unreliable poor performing builders
resulting in a market driven refinement of the sector.
Your house is a substantial investment and it is therefore
important that you understand and are happy with the terms of a
building contract when building a new home or undertaking major
renovations, before you sign any agreement.
Our Private Client team at Wynn Williams are always happy to
assist you with a review of your building contract or answer any
questions you may have.
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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