ValGroup Bulletin

In this issue:

Autumn 2010

Property: Be Assured, Get Insured
Wellington Market Report
What's a Builder's Guarantee Worth?
New Building Process and Completion Reports
New Zealand Property Commentary

What's a Builder's Guarantee Worth?

The Registered Master Builders Federation (RMBF) is New Zealand’s largest construction industry association. The members of the Federation complete over two thirds of all construction work (by dollar value) in New Zealand. Membership is made up of the majority of qualified builders including the large residential volume builders and major construction companies.

Represented regionally by 22 Local Associations spread throughout the country, the association enables the necessary checks and balances available on the ground to ensure that members remain the ‘best of the best’ in the industry.

The RMBF runs a company called Master Build Services Limited (MBS). The purpose of MBS is to provide the Master Build Guarantee for new homes and alterations and additions. MBS is the largest provider of home warranty guarantees in New Zealand, available exclusively to RMBF members and their clients.

The Master Build Guarantees are the most comprehensive products available on the market. They cover residential building work with a contract price of $25,000 and over and cover full-contract, labour-only and managed labour-only work carried out by a Registered Master Builder. Work by subcontractors, as well as materials and rot is covered, but conditions apply. MBS has recently launched two new 10 year Master Build Guarantees: the “Classic” and the “Premium” which have a cover of up to a maximum $500,000.

The Classic Guarantee provides protection against any defects in workmanship and materials for two years after the completion of the building, plus cover in specific structural elements of the building work for the remainder of the 10 year term of the Guarantee. The Premium Guarantee includes all of the above cover plus loss of deposit and non completion.

From March 2012 it will be compulsory for anyone undertaking ‘restricted building work” to be a licensed building practitioner. Restricted building work relates primarily to foundations, structure and weather tightness (cladding, roofing, etc.) and some fire protection services in low-med rise apartment buildings. There are a number of licenses that cover restricted building work being carpentry, foundations, roofing, external plastering, bricklaying and block laying, design and site.

The Government has recently launched a streamlined licensing application process for qualified applicants. RMBF supports the licensing regime as it will lift standards and provide the public with certainty that whoever is undertaking work on their home has the required skills to do so. At present anyone can call themselves a builder as there are no barriers to entry. Registered Master Builders Federation has many thousands of qualified members and they will be encouraged to become licensed.

By Warwick Quinn
Chief Executive of the Registered Master Builders’ Federation and Master Build Services Limited