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Renovation tips and mistakes to avoid

  • April 30, 2019

Renovation tips and mistakes to avoid

Kiwis love a good renovation project, but it can be hard to know what you don’t know before you start.
With that in mind, we’ve pulled together a list of common pitfalls and ways to avoid them. And, if you’re not sure about the best way to do something, just ask your NZCB builder – they’re only too happy to help out.

Don’t cheap out on materials

When you’re looking at your reno budget, we know it can be overwhelming. But try not to panic and save money by buying cheaper materials. Often they won’t last as long, or may be more difficult to use, which ends up using more labour time. Another common pitfall is to assume overseas materials are cheaper. Most New Zealand council consents specify materials, so any unusual brands or materials may end up costing you more in the consent process! Essentially, if your builder recommends a particular type of material – trust them. And if you need to trim your budget, talk to your builder and they can recommend where it’s possible.

Get your builder to do the measurements

That old saying “measure twice, cut once” became common for a reason. When it comes to building, even 2mm can make a difference! If your measurements are out, it can throw out your entire project. If in doubt, get your builder to measure.

Don’t start demolition without a plan

It’s all good and well to think to yourself “Hmmm, I wonder what’s behind that wall?” and pick up a sledgehammer or crowbar, but if you don’t have a fully formed plan, it can end up being very expensive to fix!

Consider lighting – both natural and artificial

First-time renovators often forget to consider lighting. Think about the way you use a room – do you need task lighting as well as feature lighting? A statement light fitting can make a room, but you also need to be able to see the vegetables you’re chopping!
Consider natural lighting, too. Where does the sun hit? Are there any windows? A skylight can make a world of difference to an otherwise small, dark room.

How big is your doorway?

If you’re renovating a high traffic area, consider a wider doorway than normal. This will allow more than one person to enter/exit at a time, which can be useful for kitchen and living rooms.

Go green now!

Considering the environment when renovating is usually a great way to save yourself money in the long run (and feel really good about doing your bit for climate change). But it’s cheaper and easier to build green thinking in at the start of your project, than to add it later. Consider insulation and ventilation, materials, utilising the sun, and waste disposal unit or compost. Building waste is also an issue in New Zealand, so chat to your builder about ways you can recycle or reuse materials or reduce wastage. (Sometimes it’s as simple as tweaking a measurement so you only use one sheet of ply or GIB instead of one and a bit).

Don’t skimp on quality windows

When it comes to windows, you get what you pay for. Think about how annoying a sticky or squeaky window is! You’ll never regret paying for a higher quality item when it’s something you use often and want to last a long time. Not to mention, changing windows is often requires consent so can be a costly thing to have to fix again later.

Speaking of consents…

Often when renovating, people will make decisions based on what requires a consent or is exempt. What they often forget is that the consent process exists to protect you. Yes, it may mean your project takes a little longer, but it also means the work done has to be completed to a regulated standard, which is better for you in the long run. We understand it can be frustrating, though, so ask your NZCB builder for help with the consent process if you need it.

Pick the right builder

Different builders have different specialist areas, so it’s important to keep that in mind when choosing a builder. It’s great getting a recommendation, but if your cousin’s amazing builder did their bathroom and you want a new deck, they may not be the right fit. Click here to use our Find A Builder tool and find an approved NZCB Builder with the right skills to tackle your reno.

Have a realistic budget

We’ve all seen the cash blowouts on Grand Designs, so trust us when we say you want to have realistic budget expectations at the start.
Talk to your builder about your dream outcome and they can help give you a realistic idea of what it could cost. They can also help you work out how best to deliver champagne results on a lemonade budget, if that’s what you need.
And don’t forget to keep at least 20 per cent extra in reserve. Because you never know what might happen once you’re finally allowed to get the sledgehammer out…

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    12 Insurance

    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. Calculation of Progress Payments & Final Contract Price

    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 Insurance

    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.

    9. Commencement and Completion of Work

    9.1 The Builder shall commence the Building Work within a reasonable time after:
    a. the Contract has been signed by both parties; and
    b. any deposit payable in accordance with clause 7.2 has been paid; and
    c. any necessary Building Consent or resource consent or other requisite consents or licences or consent amendments
    have been issued.
    9.2 Unless otherwise agreed in writing between the Parties, the Owner shall obtain all project information memoranda, Building
    Consents, resource or other consents or licences, and consent amendments required for the Building Work.
    9.3 The Owner shall promptly provide all information reasonably required by the Builder to enable the Builder to comply with the
    Builder’s obligations under this Contract, whether prior to the commencement of, during the performance of, or after the
    completion of the Building Work.
    9.4 The expected completion date stated in Part B of the Schedule shall be automatically extended by a reasonable time where
    delays arise due to:
    a. Variations;
    b. Any strike, lockout, or other industrial action;
    c. Loss or damage to the Building Work other than loss or damage caused by the Builder’s breach of its obligations under
    this Contract;
    d. Flood, volcanic, or seismic events;
    e. Inclement weather;
    f. Failure to obtain consent or approval through no fault of the Builder;
    g. Failure by the Owner to give timely directions;
    h. Unforeseen physical conditions;
    i. The Builder exercising its right to suspend the Building Work under this Contract;
    j. Act, omission or default by the Owner or any person for whose acts or omissions the Owner is responsible;
    k. A separate contractor’s act or omission;
    l. Unavailability or shortage of materials;
    m. Any other event which is beyond the reasonable control of the Builder and for which the Builder is not responsible.

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    7 Invoices and payments

    7.1 The Builder is not obliged to commence the Building Work until any deposit payable in accordance with clause 7.2 has been paid.
    7.2 The Deposit shall be paid by the Owner upon signing the Contract. The Deposit shall be held by the Builder and applied towards payment of the final invoice, or as provided by clause 20.9 or clause 21.4. The Deposit is therefore not to be treated
    as a progress payment. If the final invoice is less than the Deposit then the Builder shall pay the Owner the balance of the Deposit upon issuing the final invoice.
    7.3 The Owner shall make progress payments to the Builder for Building Work completed and materials supplied, including any
    adjustments for Provisional Sums, cost fluctuations or Variations, up to the end of the applicable period or stage of work. The
    payments shall be made into a bank account provided by the Builder via internet banking or direct deposit, unless the parties
    agree on a different payment method.
    7.4 Where the parties have agreed to progress payments at completion stages (Option A in Part E of the Schedule) the Builder
    may issue an invoice at any time after a relevant stage of completion is reached. If a completion stage cannot be reached
    due to matters beyond the Builder’s reasonable control, and one month has elapsed since the previous invoice, the Builder
    may invoice for the proportion of that completion stage that has been reached.
    7.5 Where the parties have agreed to progress payments at the end of defined periods of time (Option B in Part E of the Schedule)
    the Builder may issue an invoice for the Building Work completed up to the end of each such period. Any invoice issued in
    advance of the end of the relevant period (other than a final invoice) shall be deemed to have been issued on the last working
    day of that period.
    7.6 The Owner must pay the invoiced amount in full within 5 Working Days of the invoice being delivered or sent to the Owner
    or such other time as is stated in Part F of the Schedule. If the Owner does not consider that all or any part of the invoiced
    amount is payable, the Owner must, within 5 Working Days after the invoice was delivered or sent to the Owner:
    a. reply in writing to the Builder stating the amount that the Owner considers payable (the undisputed amount), and
    b. specifying the reasons why any part of the invoiced amount is disputed, and the method in which the disputed amount
    has been calculated; and
    c. pay the undisputed amount.
    7.7 If the Builder’s invoice is or is accompanied by a payment claim made under the CCA, then any payment schedule as defined
    in section 5 of that Act must be provided to the Builder within 5 Working Days of the payment claim being served on the
    Owner.
    7.8 The Owner shall pay progress payments on the due dates, irrespective of when the Owner’s bank or financier is prepared
    to advance any monies required by the Owner in order to meet the Owner’s payment obligations under this Contract. It is
    the Owner’s responsibility to ensure that sufficient funds are available to comply with the Owner’s payment obligations under
    this Contract. The issue of a Code Compliance Certificate is not a prerequisite to Practical Completion or the Builder’s
    entitlement to payment of the final invoice.
    7.9 The Owner may at any time request the Builder to provide a receipt or statement recording or evidencing the payments
    received from the Owner.
    7.10 The Parties will comply with their obligations (if any) under Subpart 2A of the CCA (which requires certain retention monies
    to be held on trust or otherwise secured) to the extent that Subpart 2A applies to this Contract. The purpose of this provision
    is to ensure that an adjudicator appointed under the CCA or an arbitrator appointed under the Arbitration Act 1996 has
    jurisdiction to make a determination in respect of any such obligations, as if they were expressly incorporated into this
    Contract.

    4 Calculation of Progress Payments & Final Contract Price

    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 relevant the 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.

    6. Invoices and Payments

    6.1 The Builder is not obliged to commence the Building Work until any deposit payable in accordance with clause 6.2 has been paid.
    6.2 The Deposit shall be paid by the Owner upon signing the Contract. The Deposit shall be held by the Builder and applied towards payment of the final invoice, or as provided by clause 19.9 or clause 20.4. The Deposit is therefore not to be treated as a progress payment. If the final invoice is less than the Deposit then the Builder shall pay the Owner the balance of the Deposit upon issuing the final invoice.
    6.3 The Owner shall make progress payments to the Builder for Building Work completed and materials supplied, up to the end of the applicable period or stage of work. The payments shall be made into a bank account provided by the Builder via internet banking or direct deposit, unless the parties agree on a different payment method.
    6.4 Where the parties have agreed to progress payments at completion stages (Option A in Part D of the Schedule) the Builder may issue an invoice at any time after a relevant stage of completion is reached. If any stage would have been Practically Completed but for the deferral of certain work at the request of the Owner, a breach of the Owner’s obligations under clause 3.4, or a force majeure event as defined in clause 23.1, then the Builder may issue an invoice for the relevant proportion of that stage.
    6.5 Where the parties have agreed to progress payments at the end of defined periods of time (Option B in Part D of the Schedule) the Builder may issue an invoice for the Building Work completed up to the end of each such period. Any invoice issued in advance of the end of the relevant period (other than a final invoice) shall be deemed to have been issued on the last working day of that period.
    6.6 Notwithstanding clauses 6.4 and 6.5, Variations may be invoiced at any time after the relevant Building Work is Practically Completed and the Variation has been quantified by the Builder.
    6.7 The Owner must pay the invoiced amount in full within 5 Working Days of the invoice being delivered or sent to the Owner or such other time as is stated in Part E of the Schedule. If the Owner does not consider that all or any part of the invoiced amount is payable, the Owner must, within 5 Working Days after the invoice was delivered or sent to the Owner:
    a. reply in writing to the Builder stating the amount that the Owner considers payable (the undisputed amount), and specifying the reasons why any part of the invoiced amount is disputed, and the method in which the disputed amount has been calculated; and
    b. pay the undisputed amount.
    6.8 If the Builder’s invoice is or is accompanied by a payment claim made under the CCA, then any payment schedule as defined in section 5 of that Act must be provided to the Builder within 5 Working Days of the payment claim being served on the Owner.
    6.9 The Owner shall pay progress payments on the due dates, irrespective of when the Owner’s bank or financier is prepared to advance any monies required by the Owner in order to meet the Owner’s payment obligations under this Contract. It is the Owner’s responsibility to ensure that sufficient funds are available to comply with the Owner’s payment obligations under this Contract. The issue of a Code Compliance Certificate is not a prerequisite to Practical Completion or the Builder’s entitlement to payment of the final invoice.
    6.10 The Owner may at any time request the Builder to provide a receipt or statement recording or evidencing the payments received from the Owner.
    6.11 The Parties will comply with their obligations (if any) under Subpart 2A of the CCA (which requires certain retention monies to be held on trust or otherwise secured) to the extent that Subpart 2A applies to this Contract. The purpose of this provision is to ensure that an adjudicator appointed under the CCA or an arbitrator appointed under the Arbitration Act 1996 has jurisdiction to make a determination in respect of any such obligations, as if they were expressly incorporated into this Contract.

    8 Commencement and Completion of Work

    8.1 The Builder shall commence the Building Work within a reasonable time after:

    a) the Contract has been signed by both parties; and
    b) any deposit payable in accordance with clause 6.2 has been paid; and
    c) any necessary Building Consent or resource consent or other requisite consents or licences or consent amendments have been issued.
    8.2 Unless otherwise agreed in writing between the Parties, the Owner shall obtain all project information memoranda, Building Consents, resource or other consents or licences, and consent amendments required for the Building Work.
    8.3 The Owner shall promptly provide all information reasonably required by the Builder to enable the Builder to comply with the Builder’s obligations under this Contract, whether prior to the commencement of, during the performance of, or after the completion of the Building Work.
    8.4 The expected completion date stated in Part B of the Schedule shall be automatically extended by a reasonable time where delays arise due to:

    a) Variations;
    b) Any strike, lockout, or other industrial action;
    c) Loss or damage to the Building Work other than loss or damage caused by the Builder’s breach of its obligations under this Contract;
    d) Flood, volcanic, or seismic events;
    e) Inclement weather;
    f) Failure to obtain consent or approval through no fault of the Builder;
    g) Failure by the Owner to give timely directions;
    h) Unforeseen physical conditions;
    i) The Builder exercising its right to suspend the Building Work under this Contract;
    j) Act, omission or default by the Owner or any person for whose acts or omissions the Owner is responsible;
    k) A separate contractor’s act or omission;
    l) Unavailability or shortage of materials;
    m) Any other event which is beyond the reasonable control of the Builder and for which the Builder is not responsible.

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