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Building Act Changes - Not Your Average "DIY" Material

30 April 2015

Kiwis love DIY, but even for the most optimistic-hammer swinging-weekend warrior, some jobs should be left to the experts.

In January 2015 changes to the Building Act 2004 came into force for residential building work, affecting the building contractor and homeowner, to strengthen consumer protection. The main change is that the building contractor is now required to provide written information to the homeowner, for building work (e.g. construction, demolition, plumbing, electrical and roofing) of at least $30,000, and some additional warranties.

Before entering into a residential building contract, or if the homeowner requests it, the building contractor is required to disclose to the homeowner prescribed disclosure information and a prescribed checklist:

  • Prescribed disclosure - this covers the building contractor’s details, skills, qualifications, insurances, guarantees and warranties.
  • Prescribed checklist - this is a Government form which covers information relating to: whether building consent is required, project management and the scope of the building work, payment and resolving disputes, and having a written contract.

 

The new provisions require that all residential building contracts (for at least $30,000) must be in writing and contain certain terms, including:  identify each party, the address of where the building work is to take place, the nature of the building work including materials and products used, price and payment methods, start and completion dates, and who is responsible for obtaining building consent.

If you don’t have a written contract, or if the contract fails to contain the mandatory parts, then a list of standard clauses will apply by default. Building contactors be aware, the default option is consumer focused, and you may not appreciate the position you are left with. However if you have a written contract, then some terms can be amended, whilst others are mandatory.

Certain warranties are now also implied into residential building contracts, which the homeowner (either the party to the contract or subsequent purchaser) can enforce against the building contractor. These include that the building work will be completed by a specific date as per the contract (or within a reasonable timeframe if date is not specified), and that the dwelling will be reasonably fit for purpose.

Also available is an automatic 12 month defects liability period. Essentially, any defect notified during this period must be remedied by the building contractor within a reasonable time. Whilst this is supposed to be a “no questions asked” clause, the onus is on the building contractor to prove that they are not responsible for the defect. The defect period commences when the building work is completed. It would be prudent for both the building contractor and homeowner to be aware of this date, so any defect(s) can be addressed within the relevant period.

Following completion of the building work, the building contractor is to provide the homeowner with a further packet of information, containing copies of the building contractor’s insurance policies, applicable guarantees, and maintenance requirements.

So if you have building work beyond the capabilities of a hammer swinging-weekend warrior, and a building contractor is required, ensure they provide you all necessary information before you sign the contract.

James Hakaria

 

James Hakaria is a solicitor in the Litigation & Employment team at Norris Ward McKinnon. James can be contacted at james.hakaria@nwm.co.nz

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