Contracts for work above a value of $30,000 will be mandatory within the next few months (this written October 2014 - we're waiting for MBIE to finalise details). We strongly recommend you put in place a contract even for projects of a lesser value.
Not all contracts are created equal. Read them carefully. Consult with a solicitor who has experience in this field. Having a good contract up front can ensure many thousands of dollars, not to mention heartache, if things go wrong.
You have options on how you work with your builder.
You may choose to work under a Full Contract or Labour-only – or a Managed Labour-only.
Full Contract can make your life easier: one price that covers the bulk of the work (add-ons, such as kitchens, tiles and tiling, door furniture and tapware may not be included) and the builder will manage the subbies working and the timing and there is one person to go to if there are any problems.
There are numerous contracts available and your builder should be able to give you one they use, tailored for you. Be wary, however. Not all contracts are equal and may not safeguard your interests.
NZ Standards provides a contract (click here) which you can buy for around $70, or you can go to the Build Safe site, run by the Building Disputes Tribunal, who also run an escrow service - where the homeowner pays into a trust account so the builder can see funds are available and can build confidently, but the money doesn't get paid over until the work has been completed satisfactorily which protects the homeowner from shoddy work.
- All materials.
- Subcontractors and their prices.
- Getting consents.
- Liaison with the architect/designer.
- Arranging inspections.
- Managing the whole building project.
- A labour-only contract means the builder is only responsible for actual building work – you manage the rest of the process.
- The implications are that you become responsible for the project, including getting consents, supervising the building work, organising sub-contractors and materials and the Health and Safety Plan.
- If you’re considering this option to save money, keep in mind the time demands – it becomes a virtual full time job.
A managed labour-only contract is a hybrid of the two.