More homeowners are reaching a point in their insurance claims where they can start rebuilding, or having major repairs carried out to their house. But what happens if the work is not up to scratch? Richard Lang and Emma Tomblin, of Duncan Cotterill Lawyers, answer this vexed question.

If you have earthquake damage that exceeds $115,000 (including GST), rather than EQC managing the repair, the repair or replacement will be managed by your own insurer, and usually by a project manager appointed by them.

Once the rebuild or repair job has been fully assessed, plans and specifications will be drawn up showing what work needs to take place, and then a building contract is signed. Unlike EQC repairs, even where the repair or replacement is being managed by the insurer, you, as the homeowner, normally enter into a building contract directly with the builder carrying out the work.

The contract specifies the obligations on the builder to carry out the work, as well as your own responsibilities. Part of the terms of the building contract would be provisions for the insurer to meet the costs of the work, up to whatever amount was agreed between you and the insurer.

The most important thing in any building contract is the plans and specifications as these define what work is being completed. It is critical that you are happy with the plans and specifications before signing the contract.

Similarly, ensure you're happy with how the work is to be carried out. If, for example, the foundation of the house must be repaired, make sure you are satisfied with how the builder proposes to do this. If in any doubt, get your own specialised advice.

The building contract will specify that the builder must undertake the work in accordance with the plans and specifications, in a tradesmanlike manner and following the requirements of the Building Act and other legislative requirements. Regardless of whether a building consent is required or not, the Building Act automatically incorporates implied warranties into the contract. These mean the work must be fit for its purpose, be undertaken with reasonable care and skill and meet the requirements of the building code.

One advantage in contracting directly with the builder is that if there is a problem with the work, including, for example, the quality of the cosmetic finishes, you have protection under the building contract. Similarly, though, you are responsible for ensuring that the building contract and associated plans and specifications correctly cover all the required work.

Most building contracts contain defects provisions, where the homeowner can raise defects within a certain period of time, say 90 days, and have the builder fix them. The homeowner's first step will generally be to notify the builder that works require remediation under the defects provisions of the contract.

If the builder disagrees, or you're not satisfied with the defect repairs carried out, most building contracts include dispute resolution procedures which the homeowner and builder could follow. Ultimately, you could sue the builder for breach of contract if the issue was not resolved. However, you need to note that the timeframe for any claim based on a contractual dispute or a non-contract claim such as negligence is six years from when the cause of action arises. The usual six-year limit may be extended in certain circumstances (for example because the damage was not reasonably discoverable until a later date), but even then the Building Act 2004 imposes a maximum period of 10 years for a claim to be brought.

Outside of the building contract, you may have remedies under warranties supplied with the products installed by the builder, or guarantees under any member organisation which the builder may be a party to, such as the Master Builders or Certified Builders associations.

You also have remedies under the Consumer Guarantees Act if the work is not up to standard. That Act contains implied guarantees that services such as building work must be carried out with reasonable care and skill, be fit for purpose and of a quality reasonably expected. If the builder fails to meet those statutory guarantees, you could require them to remedy the defective repairs. If the result is still not satisfactory, you could have the repairs remedied by another builder and recover the costs from the original builder.

Regardless of who is completing work on your property, you have a right to have the work completed satisfactorily. Make sure you get the benefit of any guarantees or warranties. Don't hesitate to raise any sub-standard work with the appropriate party, and make sure you do so within the required timeframes.

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.