How to minimise risk when buying property off-the-plans

One of the biggest risk of buying residential property off-the-plans is the risk of significant defects identified upon completion of the building work.

Fortunately, the Building Act provides buyers of residential property with automatic consumer protections against defective workmanship.

First, the Building Act states that seller or builder must fix any defective building work identified within 12 months from the date of completion. Once notified of the defect, , the building contractor must remedy the defect within a reasonable amount of time or prove that it is not defective.

Second, the Building Act further gives consumers 10 year implied warranties, which states that all building work must be done properly, competently and according to the plans and specifications in the approved building consent.

The difference between the 12 month defect period and the 10 year implied warranties is that the builder’s obligation to repair is automatic within the 12 month period.

However, after the 12 month period has ended the obligation to repair is not automatic and the onus is on the owner to show the building work is defective.

Please bear in mind that the consumer protection warranties do not apply to work carried out before 1 January 2015 or if the building contract was signed before 1 January 2015.

If you have any questions about construction disputes, speak to us at Capstone Law, and we would be happy to assist you.