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Many clients purchasing a new build property worry about potential defects that could appear post-purchase, affecting the home’s safety, quality, or durability.
If your client doesn’t understand their rights and protections, they risk being unprepared if defects or quality issues emerge. Without knowing about implied warranties and how to document or claim them, they could face significant out-of-pocket repair costs and stress. Understanding these warranties, defect repair periods, and documentation needs is critical for safeguarding their investment.
Often, clients assume their builder or developer will handle all issues, relying on verbal assurances. Others may believe that a contract needs explicit warranties written in for coverage. These common assumptions leave clients vulnerable, especially if defects arise after the initial year. Many don’t realise that New Zealand's Building Act has automatic protections—known as implied warranties—that cover building work quality and completion timeframes regardless of contract specifics.
To help your client navigate the protections available when purchasing a new build, here are the critical steps they should take if issues arise:
The Building Act provides automatic protections covering essential aspects of residential construction. These include:
These protections last for 10 years, regardless of contract terms. If there’s a breach of any of these warranties, the client may seek repairs or compensation.
Builders must repair any defects that appear within the first 12 months of the build’s completion. This is an ideal period for addressing issues such as cracks, poor finishing, or settling problems that may emerge after the client moves in. It is essential you serve notice before the 12 months expire.
Encourage clients to keep thorough documentation—from contracts and building reports to receipts for materials. A detailed paper trail makes it easier to hold builders accountable if issues come up later.
Investigate the developer, their directors, and check the insolvency register. Negative news articles or poor online reviews are red flags that shouldn’t be ignored. Though agreements and warranties provide some protection, a developer’s track record is crucial. Look for a developer who:
Purchasing a new build? Protect yourself by understanding the 10-year implied warranties, the 12-month defect repair period, and the importance of documentation. These automatic protections secure your investment and offer recourse if defects emerge.
