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What is a 10-year building guarantee?
What does a 10-year building guarantee cover?
A 10-year building guarantee provides cover to the Homeowner should a structural or weathertightness defect arise, and the builder is no longer willing or around to come back and address these defects with the homeowner. It provides much greater protection than both the Building Act 2004 and Consumer Guarantees Act.
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Are they required by law?
Under the Building Act there is a 10-year implied warranty period. All residential building work in New Zealand, no matter how big or small, is covered by the implied warranties set out in the Building Act. The majority of banks are now requesting that homeowners get extra protection when applying for lending to finance a building project, in the form of a 10-year building guarantee. As a member of New Zealand Certified Builders (NZCB) you are able to offer this additional protection through the Halo 10-Year Residential Guarantee.
What are homeowners covered for under New Zealand law?
• Building works and building materials – under the Building Act’s implied warranties
• Services provided by tradespeople – under the Consumer Guarantees Act
• Misleading claims – under the Fair-Trading Act.
When do the warranties not apply?
A building practitioner isn’t liable if the defect is caused by:
• Events beyond human control
• Accidental damage caused by others – but not subcontractors or anyone that the builder is legally responsible for
• The homeowner not carrying out normal maintenance
• The homeowner not carrying out or arranging to have repairs done, as soon as practicable after a defect becomes apparent
• If the homeowner has not taken their contractor’s advice. What does the Halo 10-Year Residential Guarantee cover that is additional to the 10-year implied warranty by law?
What does the Halo 10-Year Residential Guarantee cover that is additional to the 10-year implied warranty by law?
The Halo 10-Year Residential Guarantee is an extra service that the Builder or Homeowner purchases. This gives additional protection to a newly constructed home or renovation against qualified structural, weathertightness and non-structural defects. In the event of a claim being made and you the builder, are unwilling or unable to respond to the defects then Halo Guarantees Limited will step in.
The Halo Guarantee provides unique protection not only for the homeowner but also the builder under the Waiver of Subrogation, a benefit exclusive to NZCB Business members.
The Halo Guarantee covers the following:
Floors – examples of structural elements
• Concrete foundations, foundation walls and floor systems
• Piles and bracing elements, bearers, joists, subfloor framing
• Inter-story flooring
• Structural retaining and block walls
Walls – examples of structural elements
• Structural framing e.g. beams, lintels
• Bracing elements and fixings e.g. Ridged air barriers which provide bracing
• Structural steel portals, beams and columns Roof – examples of structural elements • Trusses, rafters, purlins, tile battens and bracing members
• Ceiling diaphragms
• Sheathing material such as ply Decks – if cover goes outside of primary structure
• Piles and bracing elements, bearers, joists, stringers, subfloor framing
• Decking material
• Balusters, handrails, posts
• Pergola or other structure over, if carrying a roof.
In addition to structural defects, there are conditions in the Halo Guarantee to cover workmanship and material defects for a set period of time. This is when the building work or materials have either failed or are not in compliance with the Building Code and the New Zealand standards applicable at the time of the Practical Completion Date, whereby the item is not fit for its intended use and does not fall within the tolerances as set out in the Guide to Acceptable Tolerances applicable at the Practical Completion Date.
The Halo 10-Year Residential Guarantee will cover workmanship and materials defect in the works or the sub-works (as applicable), during the workmanship and materials defect guarantee period, that arises due to the builder’s unlawful failure.
Other extra benefits of the Halo 10-Year Residential Guarantee include:
• Sub-contractors and suppliers – defects arising from materials and work supplied by sub-contractors
• The cost to repair other damage to the house caused by a defect
• Alternative accommodation expenses up to 26 weeks
• Up to $20,000 for professional fees such as: surveyors, engineers, legal and other fees necessarily incurred to rectify the agreed defect
• Automatic transfer to any subsequent owners of the house. How do I apply for a Halo 10-Year Residential Guarantee?
How much does it cost?
The cost is less than 1% of the total build or renovation cost. This is worked out on a tiered pricing structure which means you get the right level of protection for your build based on the value of your Building Contract.
How do I apply for a Halo 10-Year Residential Guarantee?
If you are using an Online NZCB Building Contract for your project an application is automatically sent to Halo Guarantees Limited. It is recommended you do it this way, as this will ensure that all the correct information is received by the Halo Guarantees Limited team.
If you are using a Hardcopy NZCB Building Contract or another type of building contract you can submit a hardcopy application to Halo Guarantees Limited. The Halo Guarantee Application form can be found in the Halo section on the members’ only Toolshed. Be sure to send a signed copy of the build contract with your application.
