Six essentials to discuss with your builder BEFORE you start
No matter what your project, it’s important that you take steps to protect yourself, your home and your builder before the first peg goes in. There are a number of things you have to do if your project is costing more than $30,000 (including GST), but here at NZCB we recommend you have them all checked off, regardless of how much you’re spending. After all, these things will ensure your interests are looked after. Right, let’s begin.
A prescribed checklist is mandatory for builds costing $30k (incl GST) or more, but we highly recommend one for all building projects. Your builder should provide you with the prescribed checklist, which has been put together by the Ministry of Business, Innovation and Employment, so if you haven’t been given one, be sure to ask.
Click here to see the prescribed checklist on the MBIE Building Performance website.
2. Disclosure statement
Another mandatory for builds over $30k (incl GST), and one we highly recommend is a disclosure statement. Click here to see what your contractor’s disclosure statement must include.
If any of the information in the disclosure statement seems unusual, query it. Anyone who knowingly provides false or misleading information, or who knowingly leaves out information, is liable on conviction to a fine of up to $20,000.
3. Building contract
We recommend you get legal advice about the contents of your building contract and make sure you understand all parts of it.
All NZCB builders use our template contracts, but if you’d like to check what your building contract must legally include, click here.
Your building contract should make sure both parties are clear about expected outcomes. If you expect your builder to be involved until the end, when the council issues your code compliance certificate, you will need to include this information. Otherwise your builder might move on to their next client.
Make sure you keep a clear record of anything you decide or agree. Your contract should list the required building work and any change is a variation to the contract. It’s important that you are aware of any changes and talk to your builder about any price, timeline or building consent implications of changes.
4. Halo 10 year residential guarantee
We all want our building projects to go ahead without a hitch. But just in case things go awry, you should make sure you’re adequately covered before your build begins.
NZCB has partnered with one of the largest insurance underwriters in the world to bring you Halo – the most comprehensive 10-year residential building guarantee on the market. It’s a unique, independent building cover that’s only available to people who build or renovate with an NZCB-approved builder.
Signing up for the Halo guarantee means you can rest assured that in the unlikely event something happens to your builder, or NZCB itself, during your building project, you won’t be out of pocket.
Plus, if you sell your property within 10 years, the guarantee automatically passes over to the new owner.
So, what are you covered for?
• Loss of deposit
• Extra costs to complete the dwelling
• Structural defects for 10 years, including weather-tightness
• Non-structural defects for 10 years
• Alternative accommodation requirements
Please note, engaging a member of NZCB does not automatically mean that you will have the backing of the Halo policy. Documentation must be completed with your builder and submitted to the insurer. Confirmation of cover being in place is your receipt of a Halo 10 Year Residential Guarantee Policy Schedule.
5. Contract works insurance
What many Kiwis don’t realise is that having appropriate insurance in place is a requirement of all standard construction contracts, so you have to sort it out before your project starts. Most banks also require contract works (or ‘builders risk’) insurance before they’ll release funds.
A contract works policy covers sudden and accidental physical loss or damage that occurs during the construction period.
Your policy should cover the full replacement value – the cost of rebuilding the whole project, including principal supplied materials (such as whiteware). Remember, appliances and whiteware are most vulnerable when they have been installed but the house is not occupied or secured.
There are also ‘allowances’ which are required by contract, such as professional fees, demolition and removal of debris and increased costs. These are limited to either a percentage of the contract value, such as 5 per cent, or a fixed amount.
A contract works policy also provides additional allowances such as:
• Transit – provides cover for materials during transit to and from the site.
• Offsite storage – provides cover for materials they are stored offsite.
6.Council consent lodged (if required)
You can’t usually start any building work until your building consent has been approved by your local council (unless your work is exempt or there is an emergency). Your consent is the green light for building work to begin. It’s your responsibility to get council sign-off for the project, even if your builder is doing it on your behalf, so make sure you understand the process involved.
Once your consent has been signed off, you’ll need to ensure your builder follows all the building consent requirements throughout the build. Check the work as you go and when it’s finished, so your building professionals can quickly respond to any questions or concerns. There will be council inspections to ensure all consent conditions have been met.