Did you know, when you’re building a new home, you automatically get some solid protection under New Zealand law? This comes through the Building Act, which means if something goes wrong with your home's structure within 10 years, the builder is legally responsible for fixing it. It’s a built-in right every new homeowner has.
The 10-year clock starts ticking from the day your build is completed. But what if the builder isn’t around when you need to make a claim? What happens then?
Even if the building company has gone out of business, you’ve still got options. You can pursue the directors of the building company—they have “directors’ responsibilities” under the Companies Act. And if the issue is more serious, you might still be able to take further action. In that case, it’s best to chat with your lawyer about what’s possible and realistic for your situation.
What if you want a little extra peace of mind? That’s where New Build warranty schemes can be helpful.
What Are Warranty Schemes?
A warranty scheme is essentially an extra safety net. It’s a private agreement that gives homeowners added protection when building a new home. These schemes often cover additional issues beyond what you’re entitled to by law.
In New Zealand, there are three main types of warranty schemes:
Member Schemes
Member schemes are the most common type of warranty in New Zealand. These are usually offered by builders or developers who are part of an association like Master Build, which runs the country’s most well-known member scheme.
The Master Build Guarantee is a 10-year contract that provides extra security for new build homeowners. It overlaps with some of the protections you already get under the law but also adds a few handy extras.
For example, Master Build includes “non-completion” coverage. This means:
But is paying for a Master Build guarantee worth it?
If you’re doing a progressive payment build, we think that non-completion coverage might be worth the cost. On the other hand, if it’s a turnkey build, it’s less essential since the legal protections are usually enough.
Individual Building Company Schemes
Some builders create their own warranty schemes—like Golden Homes or Signature Homes.
These schemes can vary a lot. Usually, the builder sets aside funds to back their warranty.
If something goes wrong, the builder typically handles the repairs directly. Still, it’s a good idea to read the fine print carefully to know exactly what’s covered.
Independent Schemes
Independent schemes, like Stamford Building Warranty, work a little differently. They operate more like traditional insurance policies.
In these cases, the building company takes out the insurance and transfers it to you, the homeowner, once the build is done. Instead of relying on the builder to fix issues, the insurance company pays you for any covered defects.
One big advantage here is that you don’t have to argue about who’s at fault. You just deal with the insurance provider directly.
Are Schemes Worth It?
At the end of the day, deciding whether to invest in a warranty scheme is up to you. They can be useful, but remember, a lot of protection is already built into the law.
For progressive payment builds, a warranty scheme might be worth the extra cost for the added security. For turnkey builds, your legal rights could be robust enough on their own.
Before signing up for any warranty scheme, take the time to review the details and decide what level of protection works best for your needs. It’s always better to be informed and feel confident in your choice!
At Equiti, we’re here to guide you every step of the way. We’ll help you secure the perfect property that fits your needs and lifestyle. Plus, we ensure you’re covered with the right warranties for added peace of mind. With Equiti, you can buy with confidence, knowing you’re supported by a team that puts your goals first.