Building Defects – Who’s Liable?

All home owners that have had building works carried out should be aware of their rights to building defect claims. The home owner is provided with a 10-year warranty on building defects, which is generally divided into two categories. A Defect Notification Period of 12-months, which is mandatory for all building works regardless of value, and an Implied Warranty that provides a level of protection for a further 9-years. While the general definition of a defect does not change over the 10-year period, there are differences in how defect process is approached.

Defect Notification Period (0 – 1 year)

The Defect Notification Period defines the time duration (12-months) where an owner may notify the builder of a defect, and generally have it resolved without any questions. A defect constitutes an item of work that is a breach of contract or consented drawings, non-compliance with the New Zealand Building Code, early failure of materials and products, or poor quality workmanship. The Ministry of Business, Innovation and Employment has issued the ‘Guide to Tolerances, Materials and Workmanship in New Residential Construction’, which clarifies certain classes of defects. The guide can be found here. Generally, the onus is on the builder to disprove any defect claim within the initial notification period.

Implied Warranty (1 year – 10 years)

An implied warranty ensures home ownersare provided with a full 10-year warranty, however any defect that becomes evident within this period will require court attendance, with the home owner required to provide evidence of loss or damage as a result of the defective work. It is generally up to the home owner to prove the defect within this period.

Owner Responsibilities

While the warranties provide the home owner with peace of mind, there are certain limitations to the warranties which help to limit unjustified claims against builders. Home owners must be aware of their ongoing maintenance responsibilities which, if neglected, could result in loss of ability to claim. It is the responsibility of the builder to provide a maintenance schedule to the owner that will specify any required maintenance requirements, and ensure the Building Code durability standards are maintained. For example, an external paint system may require professional cleaning every 5 years. Should the owner neglect these duties, the builders liability will be limited should any premature deterioration of the paint occur.

Exclusions

General wear and tear, natural or unavoidable causes (storms or floods), or damage caused by persons outside of the builder’s control are excluded from warranties. Additionally, any part of the building that is damaged as a result of owner activities that produce moisture are excluded from any warranty. These activities include showering, cooking, and drying clothes, or leaving standing water on timber floors which can cause swelling.

As there are instances where building defects remain concealed and hidden from normal view, it can be prudent to have a building surveyor carry out specialist investigations to ensure there are no unseen defects that could result in costly damage and repairs in the future.