Major new consumer protections are introduced to the Building Act in a new part: Consumer rights and remedies in relation to residential building work. Scheduled to come into force from late-2014, this part:
This section does not cover design work or the relationship between the head building contractor and subcontractors.
For building work above a certain sum or at a client’s request, the builder must provide certain disclosure information, including a checklist. A builder who doesn’t hand over the required information can be fined up to $2,000. A builder who knowingly gives false information or leaves out key facts can be fined up to $20,000.
Information may include:
The building checklist may include:
For building work above a certain minimum sum, there must be a written and dated contract, and it must meet any requirements set out in regulations.
In residential contracts, the following warranties are implied and are taken to form part of the contract:
Builders can’t contract out of this. It applies to the work of the builder and of anyone – employees and subcontractors – the builder is responsible for.
The client may require the builder to fix the work and repair or replace defective materials. If the builder does not fix things within a reasonable time, the client may have the work done by someone else and recover from the builder all reasonable costs incurred or they can cancel the contract.
Where the breach of warranty is substantial or cannot be fixed, the client may get compensation from the builder for any reduction in value of the building work below the price they paid, or they may cancel the contract.
The client may also obtain damages from the builder for any loss or damage resulting from the breach (other than loss or damage through reduction in the value) that the builder should have known was possible.
Builders can’t contract out of these provisions.
Within 1 year of the completion of building work, if a defect is found and it can be remedied, clients can notify the builder and ask them to remedy the defect.
The builder must remedy the defect (including repairing or replacing defective materials supplied by the builder) within a reasonable time.
The builder may also have to pay the client for any loss or damage to the client resulting from the defect (other than loss or damage through reduction in value) that they should have known the defect could cause.
This applies only to contracts entered into after this section comes into force in 2014. It doesn’t apply if the problem wasn’t the fault of the builder or anyone the builder was responsible for or if the householder neglected maintenance or failed to act as soon as the defect became apparent.
As soon as practicable after completing building work under a residential contract, the builder must give the client and the TA the documentation listed in regulations. This might include things such as guarantees relating to the work and maintenance requirements.
The term ‘compliance document’ is replaced in the Building Act by ‘acceptable solution or verification method’ or, in a few cases, replaced by ‘acceptable solution’ alone.
The Building Amendment Act 2013 also makes many changes regarding dams.
This is a brief summary only. For full details, obtain a copy of the Building Amendment Act 2013. It will be available online at www.legislation.govt.nz.