The Role of Building Guarantees in Protecting Your Investment

Talking about building guarantee When you’re building or renovating, you’re not just creating a home. You’re also putting a lot of trust and money on the line. Even with a good builder, things don’t always go perfectly. That’s why it helps to know what protections are in place if something goes wrong. In New Zealand, you’re automatically covered by legal warranties. For added peace of mind, some builders also offer independent building guarantees. Understanding how these work, and what they actually cover, can help you make better decisions and protect your investment for the long haul.

What Are You Already Covered For?

Statutory Warranties Under the Building Act

In New Zealand, all residential building work is protected by law under the Building Act 2004. These protections are known as statutory warranties and apply automatically when you hire a builder, regardless of whether there is a written contract.

They include:

Work must be carried out properly and competently
Materials must be suitable and new, unless agreed otherwise
The build must comply with the Building Code
The project must be completed within the agreed timeframe, or within a reasonable period if no timeframe is set
The result must be fit for purpose if you have made your expectations clear

These warranties remain in place for up to 10 years from the time the work is completed, giving homeowners long-term legal protection.

These protections are explained in detail on the New Zealand Government’s building website, which outlines your legal rights as a homeowner.

12-Month Defects Repair Period

In addition to the longer-term statutory warranties, there is a 12-month period where your builder is required to fix any defects. This starts from the date the work is completed.

During this time:

You can notify the builder of any issues such as poor finishing, sticking doors, or faulty materials
The builder must carry out repairs unless they can prove the problem was not caused by their work
You do not need to prove fault — the law assumes the builder is responsible within this period
It is a good idea to inspect your home thoroughly before the 12 months are up to make sure all defects are addressed

10-Year Implied Warranty Period

Even after the first year, you’re still protected. Under the Building Act, certain warranties apply for up to 10 years from the date the work is completed. These are designed to cover serious issues that may take longer to show up.

This includes:

Structural defects
Work that doesn’t meet the Building Code
Poor workmanship that affects the building’s durability or safety
Materials that weren’t suitable or have failed prematurely
Results that aren’t fit for purpose if specific outcomes were agreed

If any of these problems arise, you have the right to ask for them to be fixed. These protections are automatic and apply whether or not they are written into your building contract.

What a Third-Party Guarantee Adds

Protection If the Unexpected Happens

A third-party guarantee can protect you if something goes wrong that your builder can’t fix. This might be due to illness, retirement, insolvency, or any other situation where they are no longer available.

It can cover:

Loss of deposit
Non-completion of the build
Structural or major defects that appear after the build is finished
Faulty materials or poor workmanship that can’t be corrected by the original builder
Temporary accommodation costs if your home becomes uninhabitable due to a covered issue

Independent Backing for Peace of Mind

Unlike statutory warranties, a third-party guarantee is backed by an independent insurer. This means you are not relying solely on the builder’s ability to make things right.

In most cases:

The guarantee stays in place even if the builder is no longer in business
The protection can be transferred to new owners if the home is sold
It adds long-term value and confidence, especially for larger or more complex projects

Why It Matters for Your Build

Long-Term Confidence

Some problems take time to show up. A floor might start to sag, cladding might fail, or a leak could appear well after the first year. While the Building Act gives you a path to resolution, having a third-party guarantee means you are not left chasing solutions if your builder is unavailable. It gives you the reassurance that help is there for the full 10 years, not just the early stages.

Protecting Your Investment

Building or renovating is a major financial decision. A guarantee is not just a formality — it’s a safeguard for the time, money, and trust you have invested. Knowing there is an independent process in place if something goes wrong can make a big difference to how confident you feel moving forward with your project.

How We Support You at Coastal Construction

When you build with us, you’re protected by more than just good workmanship. Every residential project is automatically covered by the statutory warranties under New Zealand law. These give you clear rights if anything isn’t up to standard.

On top of that, we offer the HALO 10-Year Residential Guarantee. This third-party protection gives you added peace of mind with cover for things like loss of deposit, non-completion, and structural defects.

We take care of the guarantee process for you and make sure everything is in place before building starts. It’s part of how we stand behind the work we do and the homes we help create.

Ready to Build with Confidence?

If you’re planning a build or renovation, it’s worth knowing where you stand before work begins. At Coastal Construction, we make sure you’re protected under New Zealand’s legal warranties, and we offer additional cover through the HALO 10-Year Guarantee. It’s all part of making the process as safe and stress-free as possible.

Get in touch with our team to find out how we can help protect your investment and deliver a result you’ll be proud of.