Guide
Defects liability periods — what a builder actually owes after handover
Four different clocks start when you hand over a house. Most arguments happen because the owner thinks there is only one, and the builder isn't certain which is which either.
The four clocks
1. The defects liability period in your contract
Commonly 12 months from practical completion, though your contract governs — check it rather than assuming. During this period you come back and fix defects in your work. It is a contractual promise, and it is usually the one both parties are actually thinking of.
2. The Building Act's 12-month defect repair period
Separate from your contract, and it applies whether your contract mentions it or not. Under the Building Act 2004, for residential building work, if the client notifies you of a defect within 12 months of completion, you must remedy it within a reasonable time.
In that first 12 months the burden of proof effectively sits with you. If the client notifies a defect in time, it is treated as your responsibility to put right unless you can show it isn't your breach. "Prove it was my fault" is not the posture the law takes in year one.
After 12 months, the position flips and the owner has to make their case.
3. The 10-year implied warranties
The Building Act implies warranties into residential building work — that the work will be done properly, competently, in accordance with the plans and consent, with suitable materials, and that the house will be fit to live in. These apply for 10 years, and they apply regardless of what your contract says. You cannot contract out of them.
Ten years is also, broadly, the outer limit for bringing a claim about building work. A claim arriving in year eleven is usually out of time. A claim in year seven is not.
4. Your guarantee product
A Master Builders or Certified Builders guarantee is a separate commercial product with its own terms, its own period and its own claims process. It is not the same as the statutory position and it does not replace it. If you offer one, hand over the certificate and the terms — and know what it actually covers before you tell an owner it is covered.
Year one: notify and it's yours to fix. Years two to ten: still liable under the implied warranties, but the owner has to prove the breach. Year eleven: generally too late.
What counts as a defect — and what doesn't
This is where most of the heat is, and it is worth being able to explain the difference calmly on the doorstep.
A defect is work that wasn't done properly: the door that was never adjusted, the flashing that leaks, the cracked tile that was cracked when you laid it, the joinery that was out of square from day one.
Maintenance is what the house needs to keep working: cleaning the gutters, washing the cladding, re-oiling the deck, replacing seals and filters. Timber moves, paint weathers, silicone ages. None of that is a defect.
Damage is what happened after you left. The dent in the garage door. The bench mark. The tap that was over-tightened.
Settlement and shrinkage sit in the middle and cause more arguments than anything else. Fine cracking in plasterboard and shrinkage gaps in timber trim in the first year are usually normal drying-out, and many contracts deal with them explicitly by scheduling one visit at around the 12-month mark. If yours does, say so in the handover pack — before it happens, not after.
Your defence is the record, and you build it before you need it
Every defects argument comes down to what can be shown. Not what was said on site.
- Photos during the build, especially of everything that got covered up. Membranes, flashings, services in walls, subfloor. The single most valuable thing you own when someone alleges a workmanship failure four years later.
- The handover pack, signed for. Including the maintenance schedule. If a claim turns on a product warranty that required maintenance, you need to show you told them.
- Dated records of every defect reported and what you did. A pattern of "reported, attended, fixed, closed" is a very different picture from a shoebox of texts.
- Which lot, which date. On a multi-unit site the periods run from each unit's own completion, not from the last one. Getting that wrong means either doing free work or refusing work you actually owe.
Running the period well
The builders who have easy defects periods do three things.
They make reporting easy. One place to send it, with a photo. If the only route is ringing you, small things get saved up and arrive as one angry list at month eleven.
They respond fast on the small stuff. A sticking door fixed within a week costs almost nothing and buys enormous goodwill. The same door ignored for two months becomes evidence in a much larger complaint.
They close things out in writing. "Attended 14 March, adjusted and tested, owner satisfied." Three sentences. It ends the item.
Around month eleven, contact the owner and ask whether anything needs looking at. It sounds like inviting trouble. It isn't — you would far rather have a list you can work through than a claim that arrives the week the period closes, with twelve months of small resentments attached to it.
Every defect against the right period
Silicon Hub tracks each lot's defects liability period from its own practical completion date, so when a defect is logged you can see straight away whether it is covered, and the record of what was reported and what was done stays with the job.
See how it worksMore guides
- What goes in a handover packThe full list, and the four things most packs miss.
- Progress claims explainedAnd the three mistakes that delay payment.
- Practical completion to CCCThe five things that go wrong in between.
General information for New Zealand residential builders, not legal advice. The Building Act 2004 and your own contract govern, and the detail matters — if a real claim lands, get proper advice early.