Changes to the Building Act 2004 came into effect from 1 January 2015. The changes are designed to better protect clients and ensure they are informed.
All builders completing new work worth more than $30,000.00 (including GST and materials) must now have a written contract with their client and it must cover certain things. If there is no contract or it doesn’t cover all the areas specifically required, the Act also includes default provisions which will be automatically included.
A builder must now provide a compulsory checklist and disclosure statement before signing the contract. This gives the client information about the builder’s skills, qualifications and insurance cover. Even if a job is worth less than $30,000.00, if a client requests this information it must be provided. Builders can be spot-fined if they do not comply with the law.
There is now an automatic 12 month ‘defect repair period’ when builders have to fix any defects that clients have told them about—unless the builder can prove that any defects are through no fault of their own or their product.
The changes also include new implied warranties under the Act that have not been met. All building work is now expected to be carried out in a proper and competent manner. It has to be consistent with the plans and specifications set out in the contract and in accordance with the building consent. All materials must be suitable for the purpose for which they will be used. If these warranties are breached, the Act covers what will happen if the breach can be remedied, or is substantial, or is unable to be remedied.
After a job has been completed certain information must be provided by the builder. This includes copies of any guarantees and warranties that apply to the materials used as well as information about what maintenance is required. This is to ensure the guarantee and warranty remains valid.
Whether you are a builder needing a written contract or other help to comply with the new requirements, or a homeowner considering employing a builder, ARL Lawyers can help you.