The owners of a newly-built home discovered several minor defects in the tiling of their bathroom around 6 months after moving in.  They took some time to get around to contacting the builder who carried out the work for them, to ask him to come and take a look at the tiling. 

The builder let them know that because their building contract had included a 6-month ‘defects notification period’ and they were outside that period, he did not have an obligation to remedy the defects.

They contacted their lawyer, who advised that a 6-month defects notification/maintenance period was illegal, as the law requires a 12-month maintenance period as a minimum.  Their lawyer also advised that there are various warranties that are implied in building contracts.

THE 12-MONTH MAINTENANCE PERIOD

After building work is completed on a home, the home owner has a 12-month period during which their contractor has a legal obligation to fix any defects in the building work.

This right applies whether or not there is anything about a 12-month maintenance or defect repair period in the building contract. It also applies to both new builds and renovations to an existing home.

How do I take advantage of the 12-month Maintenance Period?

You must notify your contractor of a defect as soon as it is found.

The contractor is then obliged to fix it as soon as possible.

It is a good idea to have the contractor provide written confirmation of the date on which the building work was completed, so that there is no dispute as to when the 12-month period commenced.

Some building contracts will set out more specifics about the arrangement such as:

·         how the contractor is to be notified of a defect (for example in writing);

·         how long the contractor has to complete the repairs (such as 30 working days); and

·         what happens in the event of a dispute between the home owner and the contractor.

It can be difficult to work out exactly what a ‘defect’ is.  The Government building website (www.building.govt.nz) has helpful information about defects, including a guide for home owners and contractor to refer to together if there is a dispute about a defect.

IMPLIED WARRANTIES

Home owners are entitled to certain “implied warranties” that kick-in after the completion of residential building work, for a period of 10 years, regardless of whether or not they are set out in a building contract.  These implied warranties are that:

  • All building work will be done properly, competently and according to the plans and specifications in your approved consent;
  • All the materials used will be suitable and, unless otherwise stated in the contract, new;
  • The building work will be consistent with the Building Act and the Building Code;
  • The building work will be carried out with reasonable care and skill, and completed within the time specified or a reasonable time if no time is stated;
  • The home will be suitable for occupation at the end of the work; and
  • The building work and the materials used will be fit for any purpose stated in the contract.

The implied warranties are mandatory, which means that the contractor cannot contract out of them (even if they are not written down in a contract). 

These warranties also apply to ‘on sellers’ – that is, people who arrange for the unit to be built for the purpose of selling it.

How do I take advantage of the Implied Warranties?

To activate the implied warranties, your first step would be to contact the builder.  If the builder does not agree to remedy the issue, or if you are in dispute as to whether something is, for example, fit for purpose, you will need to take legal advice.  You may then need to take the contractor to Court and demonstrate that you have suffered loss or damage because of their actions.  You may then be entitled to compensation.

If you think that any of the implied warranties have been breached, you should take legal advice about your options as soon as possible.

What if I sell my house within the 10-year period?

The implied warranties relate to the building work itself, rather than the owner of the home at the time the building work was done.  This means that if you sell your house within 10 years of building work being completed, the new owner will be entitled to the implied warranties for the remainder of that 10-year period.

If you are selling your home within the 10-year period, you should give the buyer as much information as possible about the building work, including who did it and when.

If you are buying a home that has had building work done, you should ask the seller for information about when it was done and by whom, to find out if the 10-year period is still running.

Helpful tip: get maintenance information from the contractor

When building work is completed and you move into your new, or newly-renovated, home the contractor should provide you with information about the home’s maintenance requirements.  You should make sure you get this information at the outset, so that you can maintain your home properly.  If you fail to keep up with maintenance that the contractor had told you about, you might not be able to have defects remedied if the problem was actually a result of poor maintenance.

Claire Tyler
Commercial Lawyer
Wellington


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