Nails

While consumers face stiff fines if they don't play by the new rules, they still have very few protections if the builder does a substandard job.

You can make a complaint to the Building Practitioners Board if an LBP has carried out work in a negligent or incompetent manner. However, the board doesn’t have the power to award compensation or reparation. The most it can do is cancel the builder’s licence and impose a fine of up to $10,000.

There are few other avenues for seeking redress. The Disputes Tribunal is seldom an option because many building disputes involve sums greater than its $15,000 claims limit. Adjudication and arbitration are other options but they carry significant costs. Depending on the scale and complexity of the dispute, fees can range anywhere from several thousand dollars to tens of thousands.

We’ve previously called for a specialist building-disputes tribunal as a cost-effective way to resolve building wrangles. That’s yet to happen. We've also called for a mandatory home warranty scheme, similar to that in Queensland. The Queensland system, run by the government-backed Building Services Authority, requires builders to take out insurance for residential building projects above a set value. Consumers can claim for losses resulting from non-completion or shoddy work.

Proposals for some form of warranty scheme were raised in a 2010 discussion paper released by the Department of Building and Housing. Mandatory home warranties have also been supported by other groups including the Institute of Professional Engineers and Local Government New Zealand. But any changes have been put on hold pending a broader review by the Law Commission. That review is unlikely to be completed for some time.

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