If you’re looking to build your next home, or are undertaking a large-scale renovation, it’s important to ensure you have adequate cover if things go awry. We all know about home and contents insurance, but what about a building guarantee? All our NZCB builders can arrange a Halo 10-year Residential Guarantee Cover for you. Read on to find out everything you need to know about this important cover for your new home.

What am I covered for under NZ law?

You are covered for:

  • Building works and building materials — under the Building Act’s implied warranties
  • Services provided by tradespeople — under the Consumer Guarantees Act
  • Misleading claims — under the Fair Trading Act.

So, what does a 10-year building guarantee cover?

While the vast majority of building projects will run smoothly, sometimes things do go wrong. A building guarantee provides protection when these issues arise.

A 10-year building guarantee offers coverage if you experience defective structural or weather tightness elements within a 10-year period after the completion of your building works. It provides much greater protection than both the Building Act and Consumer Guarantees Act. It may also be that your builder stops working as a builder during the 10 years after completion. The guarantee is there to protect your housing investment.

Are they required by law?

Under the NZ Building Act, there is a 10-year implied warranty period. All residential building work in New Zealand, no matter how big or small, is covered by the implied warranties set out in the Building Act.

However, the majority of banks are now requesting the extra protection of a 10-year building guarantee when you apply for lending to finance a building project. Builder Associations, such as New Zealand Certified Builders (NZCB), offer this additional protection through their Halo 10-Year Residential Guarantee.

When do the warranties not apply?

A building practitioner isn’t liable if the defect is caused by:

  • Events beyond human control
  • Accidental damage caused by others — but not subcontractors or anyone that the builder is legally responsible for
  • You not carrying out normal maintenance
  • You not carrying out or arranging to have done repairs as soon as practicable after a defect becomes apparent
  • If you haven’t taken your contractor’s advice.

What does the Halo 10-Year Residential Guarantee Cover over and above the 10-year implied warranty by law?

A building guarantee is an extra service that you can purchase to add additional protection against qualified structural, weather-tightness and non-structural defects in your newly-constructed home or major renovation. If a builder is unwilling, or is not around, to adhere to your concerns, this additional protection can be used to address the defects.  The Halo 10-year Residential Guarantee covers the following:

1. Floors – examples of structural elements

  • Concrete foundations, foundation walls and floor systems
  • Piles and bracing elements, bearers, joists, subfloor framing
  • Inter-story flooring
  • Structural retaining and block wall

2. Walls – examples of structural elements

  • Structural framing, e.g. beams, lintels
  • Bracing elements and fixings e.g. Ridged air barriers which provide bracing
  • Structural steel portals, beams and columns

3. Roof – examples of structural elements

  • Trusses, rafters, purlins, tile battens and bracing members
  • Ceiling diaphragms
  • Sheathing material such as ply

4. Decks – if cover goes outside of primary structure)

  • Piles and bracing elements, bearers, joists, stringers, subfloor framing
  • Decking material
  • Balusters, handrails, posts
  • Pergola or other structure over, if carrying a roof

In addition to structural defects, there are conditions in a guarantee which cover workmanship and materials defect for a set period of time. This is when the building work or materials that have either failed or are not in compliance with the New Zealand Building Code and the New Zealand Standards applicable at the time of the Practical Completion Date, whereby the item is not fit for its intended use and does not fall within the tolerances as set out in the Guide to Acceptable Tolerances applicable at the Practical Completion Date.

The Halo 10-Year Residential Guarantee will cover you for a workmanship and materials defect in the works or the sub-works (as applicable), discovered and notified by you to Halo Guarantees Limited during the workmanship and materials defect guarantee period, which arises due to the builder’s unlawful failure.

Other extra benefits of the Halo 10-Year Residential Guarantee include:

  • Sub-contractors and suppliers – defects arising from materials and work supplied by sub-contractors
  • The cost to repair other damage to the house caused by a defect
  • Alternative accommodation expenses up to 26 weeks
  • Up to $20,000 for professional fees such as: surveyors, engineers, legal and other fees necessarily incurred to rectify the agreed defect
  • Automatic transfer to any subsequent owners of the house

How much does it cost?

It costs less than 1% of the total build cost to protect your biggest investment.

How do I apply for a Halo 10-Year Residential Guarantee?

Only an NZCB Builder can offer you the Halo 10-Year Residential Guarantee. To find an NZCB builder near you, use the Find A Builder search function on www.nzcb.nz