How to Avoid Cowboy Builders

October 10, 2025

It’s no secret that building or renovating can be a daunting endeavour. Between navigating the consent process, managing budgets, and choosing the right people to work with, there’s a lot at stake. Especially when you’re putting your trust in a builder for the first time.

Too many homeowners have been caught out by builders who disappear partway through a job, leave behind substandard work, or demand extra money without explanation. While genuine variations can arise on any build, cowboy builders often raise so-called ‘unexpected costs’ on homeowners as a way to inflate the bill. These aren’t just frustrating setbacks. They can derail your entire project and leave you substantially out of pocket.

The good news is that there are steps you can take to protect yourself. In this guide, we’ll show you how to avoid cowboy builders and explain why working with a member of New Zealand Certified Builders (NZCB) gives you the best chance of a smooth, stress-free build.

What is a Cowboy Builder?

A cowboy builder is someone who claims to be a qualified building professional but lacks the experience, accountability, or ethics to deliver work to the required standard. These operators often underquote to win work, avoid written agreements, and leave projects unfinished or non-compliant.

You might find them advertising on online marketplaces, offering to start “immediately,” or promising a price that seems too good to be true. They tend to avoid industry associations and rarely work under the same name for long.

Unlike qualified, licensed professionals, cowboy builders are unregulated and often uninsured. Their shortcuts can cause long-term issues for homeowners, including costly repairs, legal disputes, or even having to redo the whole project.

A cautionary tale: When trust was misplaced

A recent case reported by 1News shows how badly things can go wrong when a builder isn’t properly vetted. A Palmerston North homeowner paid thousands of dollars to a tradesman for promised renovation work. The builder took the money, started little to no work, and then disappeared, cutting off all contact. The homeowner was left financially and emotionally devastated, describing the experience as something that “really ruined me.”

Stories like this are unfortunately not rare, and they highlight the importance of doing due diligence before engaging a builder. Simple checks such as confirming trade qualifications, requiring a written contract, and choosing a verified NZCB member can help prevent these kinds of outcomes.

How to spot the warning signs

There are a few things to look out for when you’re talking to a builder, including

Reluctance to provide recent references or examples of past work

No written quote or contract offered

Requests for large upfront payments, particularly in cash

Vague timelines and unclear scopes of work

No proof of insurance, licensing or formal qualification

Limited or inconsistent contact details, with no visible business branding

If any of you spot any of these red flags, you should take a step back and look for someone else to do the work.

What should you do instead?

The good news is that there are a lot of easy things you can do to minimise the chance of things going wrong. Choose a reputable builder from the start, and you’ll save yourself a lot of stress down the track.

Work with a member of a Trade Association

The most effective way to ensure your builder is qualified and trustworthy is to choose a member of a trade association like New Zealand Certified Builders.

NZCB members must be trade qualified and go through a thorough vetting process before they’re accepted into the association. Effectively, all the paperwork and business checks are done on your behalf. They’re assessed not only on their experience but also their business practices and commitment to ongoing professional development.

“We don’t just accept anyone,” says Scott Rasmussen, Membership & Technical Manager at NZCB. “Being a Trade Qualified Carpenter is the cornerstone of our Association. We check our members are qualified, they’re experience, and that they have maintained good relationships with their clients and industry partners. We’re committed to high professional standards via our code of conduct and promote and support their ongoing education.”

NZCB members are also the only builders in New Zealand who can offer the Halo 10-Year Residential Guarantee, which adds another layer of protection for homeowners. You can search for trusted builders in your region at nzcb.nz/find-your-builder.

Ask to see credentials, qualifications and licensing

Any builder undertaking restricted work must hold a current Licensed Building Practitioner (LBP) license. You can verify a builder’s license at lbp.govt.nz.

You should also ask to see proof of the builder’s public liability insurance, and it’s worth also speaking to them about their qualifications, training, and past projects. A reputable builder will be happy to share this information.

Compare quotes properly

When you’re choosing a builder for your job, make sure you get at least two or three detailed quotes. Be wary of ones that seem unusually cheap or very vague. Cowboy builders will often intentionally underquote to get the job, and then either disappear or inflate costs once the project starts.

A solid quote will break down labour, materials, project milestones, and payment terms. If something is unclear, ask for clarification before you sign anything. Pay particular attention to allowances, provisional sums, or estimates for things like kitchen and bathroom fixtures. Sometimes these are listed at the lowest possible cost, which makes the overall quote cheaper but may not reflect the quality or specification you actually want. A professional builder will explain these items clearly and adjust them to suit your expectations.

It’s also worth paying attention to availability. If a builder promises to start immediately with no clear reason, it may be a sign that they don’t have steady work or are trying to lock you in quickly. By contrast, a reputable builder often had other jobs on the go and may be booked up several months or longer in advance. While it may mean waiting a little longer to get started, that delay is usually a good indication that others trust their work too.

Never start without a written contract

The type of agreement you need will vary depending on the scale of your project. But you should always expect to have something in writing. If everything is done on the basis of a “gentlemen’s agreement”, you have very little recourse if something goes wrong.

Professional builders will always use a building contract for works over $30,000 as required by the Building Act. For works under $30,000 many builders will choose to use a simplified version – such as NZCB’s Small Works and Alterations Contract – to give homeowners peace of mind even for the smallest of projects.

Typically, contracts will outline:

The full scope of work

Start and completion dates

Agreed payment terms

Dispute resolution options

Warranty and insurance coverage

Read more about why you need a building contract for every building or renovation project on our website.

Choose a Building Guarantee that stands behind the work

Builders who take pride in the quality of their work are happy to stand behind it. That’s why all NZCB members offer the Halo 10-Year Residential Guarantee – our comprehensive building guarantee designed to protect you long after the work is done.

Halo provides cover for up to a decade, including:

Structural defects such as weather-tightness failures

Workmanship or materials-related issues within the first two years

Defects that become apparent after Practical Completion

Cover even if the NZCB member is no longer trading

It’s fully transferable if you sell your home, offering added value and peace of mind for future buyers.

Only NZCB members can offer the Halo Guarantee. It’s one of the most robust residential guarantees available in New Zealand, giving homeowners long-term confidence from day one.

Learn more at halo.nz.

Do some background checking

A quick search online can reveal a lot. Look for independent reviews such as Google Reviews, past projects, and whether the business has a consistent presence across platforms. A well-established builder will typically have a website, active business registration, and a portfolio of their previous work either available online or that they can show you in person.

A quick search on the Companies Register can provide detailed information about the company, its directors and shareholders. If you’ve been given a company name or NZBN number and you can’t find it on the Companies Office website, this should ring alarm bells.

If possible, speak to recent clients or ask to view a current job. Genuine professionals will usually be happy to put you in touch with previous clients who can vouch for them.

Watch out for large upfront payments

It’s common to pay a deposit before work begins, but the amount should always be proportionate to the size and type of project. For large-scale builds or renovations, payments are typically made in stages that align with progress milestones or at regular intervals for work completed, such as weekly or fortnightly. For smaller jobs, it may be more common to pay a higher deposit and then settle the balance on completion. Whatever the arrangement, payments should always be clearly set out in your building contract and supported by a payment claim or invoice.

Why NZCB Builders are worth the investment

When you work with an NZCB member, you’re getting more than a tradesperson. You’re getting a builder who is held to the highest standards in training, business ethics, and customer care.

NZCB members are accountable to an independent organisation, backed by an industry-leading guarantee, and actively supported with resources that keep them up to date with changes in law, materials, and best practice.

“Qualified builders welcome questions. Cowboy builders avoid them.”

Already hired a Cowboy? Take action now

If you’ve already signed a contract or handed over money and now suspect something’s not right, start by documenting everything and seeking independent legal advice. A lawyer can guide you on your options and obligations under the contract or , the Building Act and other relevant legislation.

Take photos, save emails and texts, and keep records of all conversations. Contact a construction lawyer or building dispute specialist for advice. You can also reach out to Consumer Protection or MBIE.

If restricted work has been completed by someone without a current LBP licence, you may be able to report them through the Licensed Building Practitioners Board.

Time is critical in these situations, so don’t delay seeking help.

Build with confidence – choose a certified builder

Cowboy builders are still out there, but you don’t have to fall victim to their tactics. By taking simple steps to verify credentials, insist on contracts, and choose a builder affiliated with a professional body like NZCB, you can avoid the risks and build with confidence.

Every homeowner deserves a builder who takes pride in their work, stands behind it, and communicates openly from start to finish. That’s why NZCB exists.

Find your NZCB builder today: nzcb.nz/find-your-builder

Need more advice? Check out these resources

How to choose the right builder

Find your builder

Halo 10-Year Guarantee

Government and Industry Resources

Find an LBP

Choosing a building practitioner

12.1	Part G of the Schedule contemplates that the Parties will elect who is responsible for arranging the contract works insurance. If the Parties have not made that election or if their intention is unclear, then the Owner must arrange contract works insurance if the Building Work involves changes, alterations, renovations, restoration, repairs or maintenance to existing structures, and the Builder is responsible for arranging contract works insurance if the Building Work involves constructing an entirely new stand-alone structure. Irrespective of who arranges the contract works insurance, the excess on a contract works claim is payable by the Owner. Given that such insurance typically expires on Practical Completion, the Owner must ensure that the Building is insured from that point onwards.
12.2	The amount insured must be at least as much as the Original Contract Price, plus an allowance for Owner-supplied materials, expediting expenses, removal of debris, professional fees, increased costs during construction, increased costs during reconstruction, and materials in storage (off the Project site). Unless otherwise agreed, the allowances for these items shall be those shown in Part G of the Schedule, and if no allowance is made in that Part for any item then the allowance must be reasonable in the circumstances.
12.3	The Owner must arrange contract works insurance against loss or damage to the Owner’s existing structures made available by the Owner to enable the performance of the Building Work, or existing structures adjacent to the Building, and to the Owner’s contents. This insurance must be for the full replacement value, and for consequential loss arising from loss or damage to those structures and contents.
12.4	The Builder must arrange public liability insurance for loss or damage to any property, or illness, injury or death to any person, that arises from the performance of the Building Work.
12.5*	In the event of loss or damage to any part of the Building which is not caused by the Builder or any party for whom the Builder is responsible:
	a.	The Builder is not required to carry out any restoration work at the Builder’s own expense.
	b.	The Builder will restore all loss or damage to the Building and the restoration work will be treated as a Variation.
	c.	The restoration work will be paid for from the proceeds of the contract works insurance.
	d.	If the delay in confirming insurance cover after loss or damage to the Building has occurred is such that the Builder can no longer reasonably afford to maintain spare capacity to perform the Building Work when required, the Builder may suspend the Building Work as if clause 20.2 applied, and if the Builder has not cancelled the contract in the meantime, the Builder shall not be obliged to resume the Building Work until the Builder’s commitments reasonably allow for a resumption.
12.6	If this Contract is completed on-line, and either Party has selected the option to apply for a contract works policy marketed under the “REDi” brand, then an application for such a policy will be automatically generated from the information entered into the Schedule of this Contract.
12.7	The insurance broker responsible for arranging the REDi contract works policy and the underwriter(s) to whom the application is submitted together with their respective representatives or agents are authorised to obtain from, and disclose to, any other party any information they consider relevant to the assessment of the application for the policy.
12.8	For the purpose of section 12 of the Contract and Commercial Law Act 2017, the provisions in this Part 12 are intended to create obligations enforceable by the insurance broker and the underwriter(s) referred to in clause 12.7 and their respective representatives or agents, whether or not they are parties to this Building Contract.

4.1	This is a building contract in which the total price payable for the Building Work is not fixed, specified, or known at the time of entering into the Contract. Instead, the progress payments and the Final Contract Price are to be calculated by reference to the actual costs incurred by the Builder in carrying out the Building Work, plus a Margin for the Builder’s Off-site Overheads and profit. The Parties may have chosen to enter into this form of building contract for any number of reasons, including that it is too difficult for the Builder and/or the Owner to accurately predict the precise scope of the Building Work at the outset, or the Building Work involves innovative systems or materials the cost of which is largely unknown, or to avoid the administrative burden of having to recalculate a fixed contract price each time a component of the work changes, or simply because it is their preference to do so. While this inevitably involves some uncertainty as to what the Final Contract Price will eventually amount to, it has the advantage that at the conclusion of the Building Work the Owner will have become liable to pay no more and no less than the value of the Building Work and materials the Owner has actually received.
4.2	The progress payments and the Final Contract Price payable to the Builder shall therefore be calculated by reference to the hours of work expended by the Builder and the Builder’s employees and contractors in carrying out the Building Work, plus the materials and other direct costs incurred by the Builder in carrying out the Building Work, using the rates set out in Part F of the Schedule. Onto those amounts shall then be added the Margins for the Builder’s Off-site Overheads and profit, calculated by reference to the percentages shown in Part F of the Schedule.
4.3	The Builder shall be entitled to charge for and recover all costs that the Builder would not have incurred but for the Building Work, and that are reasonably necessary to carry out the Building Work to the standard required by this Contract, plus the relevant Builder’s Margins. Those costs include (without limitation):
	a.	The Builder’s own labour and labour performed by the Builder’s employees and contractors.
	b.	Products or services from subcontractors or specialist trades.
	c.	Professional advice such as architecture and engineering.
	d.	Building materials and consumables.
	e.	Hireage of tools, plant, equipment, appliances or vehicles.
4.4	The cost of labour shall be calculated using the labour rates set out in Part F of the Schedule, or where no rates have been specified in any particular case, at the prevailing market rates for the personnel in question. The labour rates set out in Part F of the Schedule apply to normal working hours and days, and in calculating working hours no deduction shall be made for work breaks that are reasonably necessary for the consumption of food or beverages or to ensure the continued health, safety, productivity and efficiency of the relevant personnel. Where in order to comply with the Builder’s obligations under this Contract it is reasonably necessary for the Builder and/or the Builder’s employees and subcontractors to carry out Building Work outside of normal working hours or on weekends or public holidays, and the Builder is required to pay penal or overtime rates as a result, those penal or overtime rates shall be included in the calculation of the cost of the Building Work.
4.5	All the costs of the Building Work apart from labour shall be calculated by reference to the invoice issued to the Builder for the relevant item, or if no invoice was issued, by reference to what the Builder actually paid. Where such costs cannot be separately identified or accurately ascertained through timesheets, invoices or otherwise, the cost of those items shall be calculated having regard to the prevailing market price for the relevant items.
4.6	The rates set out in Part F of the Schedule shall be adjusted for any increase in the rates charged by subcontractors that could not reasonably have been foreseen by the Builder at the time this Contract is signed by the Builder, and which would otherwise have the effect of eroding the Builder’s profit margin. The Builder must be able to substantiate the increase by reference to written evidence such as quotations, communications or invoices from the relevant subcontractor, clearly demonstrating the rates that were first advised to the Builder when Part F of the Schedule was completed, and the rates subsequently charged. The Builder shall whenever reasonably practicable, resist any rate increases and procure subcontracts on the basis of fixed rates that cannot be increased during the course of the Building Work.
4.7	If any of the subcontractor rates set out in Part F of the Schedule decrease for any reason (other than rebates or discounts provided to the Builder as a result of such factors as loyalty, volume of business, enticement to form a new or long term trading relationship, or membership of a trade association or cooperative company), the decreased rate(s) shall be used in the calculation of all progress payments and the Final Contract Price from the time that the decrease takes effect.
4.8	Either prior or subsequent to the Parties entering into this Contract, the Builder may have given or may give to the Owner or the Owner’s representative(s) an estimate, indication, projection, guess, intimation, prediction or similar communication (together referred to as an “estimate”) as to what the Final Contract Price or any component of it is likely to turn out to be. It is common for building owners to request an estimate and it is common for builders, in good faith and out of a desire to be helpful, to comply with that request, or indeed to offer an estimate unsolicited. The Parties acknowledge that even the most carefully calculated estimate can in hindsight prove to be grossly pessimistic or optimistic, and it is impossible for the Builder to accurately predict what the final outcome of the Project will be, given that so many factors are outside the Builder’s control.
4.9	The Parties have chosen this form of contract rather than a fixed price contract because they have agreed that the Final Contract Price will be determined by the hours of work and the materials and other direct costs that are ultimately involved, and the margin applied to those items. By definition, those hours and those costs cannot be known in advance. The Parties therefore expressly record that any such estimate that may have been or may be provided by the Builder – assuming the Builder used the term “estimate” or some reasonably equivalent expression – shall only represent the Builder’s best guess, based on the Builder’s experience and what the Builder knows about the Project itself to date. The Builder agrees to take reasonable care in calculating any estimate that may be given, and to keep the Owner regularly informed, by the provision of periodic invoices or otherwise, of the amount paid and payable to the Builder in respect of the Building Work at any given time.
4.10	A price estimate is fundamentally different from an undertaking, promise, commitment, statement, assurance, warranty or representation (together referred to as a “representation”) that the total contract price will amount to, or will not exceed, a stated or fixed sum. If the Builder has given such a representation, then that will bind the Builder in accordance with its terms. However the representation must be reasonably inferred from the wording used. For example if either of the Parties has, without full knowledge of the legal significance, mistakenly described an estimate as a “quote” or used some other wording that might suggest a representation that would be enforceable in law, then that will not constitute a representation if the Parties did not intend it to have that effect.

13.1	Part H of the Schedule contemplates that the Parties will elect who is responsible for arranging the contract works insurance. If the Parties have not made that election or if their intention is unclear, then the Owner must arrange contract works insurance if the Building Work involves changes, alterations, renovations, restoration, repairs or maintenance to existing structures, and the Builder is responsible for arranging contract works insurance if the Building Work involves constructing an entirely new stand-alone structure. Irrespective of who arranges the contract works insurance, the excess on a contract works claim is payable by the Owner. Given that such insurance typically expires on Practical Completion, the Owner must ensure that the Building is insured from that point onwards.
13.2	The amount insured must be at least as much as the Original Contract Price, plus an allowance for Owner-supplied materials, expediting expenses, removal of debris, professional fees, increased costs during construction, increased costs during reconstruction, and materials in storage (off the Project site). Unless otherwise agreed, the allowances for these items shall be those shown in Part H of the Schedule, and if no allowance is made in that Part for any item then the allowance must be reasonable in the circumstances.
13.3	The Owner must arrange contract works insurance against loss or damage to the Owner’s existing structures made available by the Owner to enable the performance of the Building Work, or existing structures adjacent to the Building, and to the Owner’s contents. This insurance must be for the full replacement value, and for consequential loss arising from loss or damage to those structures and contents.
13.4	The Builder must arrange public liability insurance for loss or damage to any property, or illness, injury or death to any person, that arises from the performance of the Building Work.
13.5	In the event of loss or damage to any part of the Building which is not caused by the Builder or any party for whom the Builder is responsible:
		a.	The Builder is not required to carry out any restoration work at the Builder’s own expense.
		b.	The Builder will restore all loss or damage to the Building and the restoration work will be treated as a Variation.
		c.	The restoration work will be paid for from the proceeds of the contract works insurance.
		d.	If the delay in confirming insurance cover after loss or damage to the Building has occurred is such that the Builder can no longer reasonably afford to maintain spare capacity to perform the Building Work when required, the Builder may suspend the Building Work as if clause 20.2 applied, and if the Builder has not cancelled the contract in the meantime, the Builder shall not be obliged to resume the Building Work until the Builder’s commitments reasonably allow for a resumption.
13.6	If this Contract is completed on-line, and either Party has selected the option to apply for a contract works policy marketed under the “REDi” brand, then an application for such a policy will be automatically generated from the information entered into the Schedule of this Contract.
13.7	The insurance broker responsible for arranging the REDi contract works policy and the underwriter(s) to whom the application is submitted together with their respective representatives or agents are authorised to obtain from, and disclose to, any other party any information they consider relevant to the assessment of the application for the policy.
13.8	For the purpose of section 12 of the Contract and Commercial Law Act 2017, the provisions in this Part 13 are intended to create obligations enforceable by the insurance broker and the underwriter(s) referred to in clause 13.7 and their respective representatives or agents, whether or not they are parties to this Building Contract.