Working with Builders and Contractors: A Homeowner's Guide

Builder selection should not be treated as price alone. MBIE says to compare quotes on more than price, including experience, reliability, references, fixtures and fittings, and whether each quote covers the same scope and materials. If a quote is significantly higher or lower than the others, ask why.

This guide covers practical checks from finding candidates to final payment, with a focus on evidence, contracts and official dispute pathways.

Finding the Right Builder

The search for a good builder should start well before you need one. Good tradespeople are busy, often booked months ahead. Starting early gives you time to research thoroughly rather than rushing into a decision because your project timeline demands it.

Word of Mouth

Personal recommendations can help you build a shortlist. MBIE suggests asking friends, family or neighbours for recommendations, asking for references, and looking at examples of previous work.

When you receive a recommendation, ask specific questions. Was the work completed on time and on budget? How did the builder handle unexpected problems? Was communication clear throughout? Would they hire them again? The answers reveal more than any advertising.

Online Research

Online reviews provide additional perspective, though they require careful interpretation. A few negative reviews among many positive ones may reflect unrealistic client expectations rather than poor work. Consistently negative themes across multiple reviews warrant caution. Look for specifics about quality, communication, and problem resolution rather than just star ratings.

For restricted building work, use Licensed Building Practitioners in the relevant licence class and check the LBP register. Not all consented work is restricted building work, and some exempt work may still require an authorised professional or licensed person, so check the consent and trade requirements for the specific job.

Getting and Comparing Quotes

Request quotes from at least three builders for any significant project. Provide identical information to each, including plans, specifications, and any specific requirements. This allows meaningful comparison rather than comparing quotes for different scopes.

What a Good Quote Includes

A professional quote should be detailed and specific. It should itemise labour and materials separately, specify exactly what is included and excluded, provide an estimated timeline, and state payment terms. Vague quotes with single lump-sum figures make comparison difficult and create scope for disputes later.

Pay attention to what is explicitly excluded. Common exclusions include consent fees, engineering, scaffolding, and removing unexpected problems like asbestos or rot. Understanding exclusions helps you budget for the true total cost rather than the headline quote figure.

If a quote is significantly higher or lower than the others, ask why. Also check whether the price includes GST, what is excluded, whether provisional or prime-cost sums are realistic, and how variations will be priced and approved.

Evaluating Beyond Price

The lowest quote is not automatically the best choice. MBIE recommends comparing experience, reliability, references, fixtures and fittings, and like-for-like scope as well as price.

Contracts and Agreements

For residential building work costing $30,000 or more including GST, a written contract is mandatory. A written contract is also useful below that threshold because it records the work, price, payment process, timeline, variations, defects and dispute process.

Standard Form Contracts

Several standard form contracts are available for residential building work in New Zealand. MBIE points homeowners to NZS 3902:2004 for housing, alterations and small buildings, and notes that a contract should still be checked against the specific work.

Read any contract thoroughly before signing, understand your obligations as well as the builder's, and ask about anything unclear. MBIE says homeowners should get legal advice about the contents of a contract and make sure they understand all parts of it.

Scope: what work and materials are included and excluded. Price: fixed price, hourly rate, cost-plus or other pricing method, and what triggers variations. Timeline: expected start and completion dates and how delays will be dealt with. Payments: dates or stages, amounts, invoices and receipts. Disputes: the process to follow if there is a disagreement.

Deposits and Progress Payments

Payment terms should be written into the contract. MBIE says the contract can set out how many payments will be made, the amount of each payment, and when each payment is due.

Deposit Guidelines

There is no official one-size-fits-all deposit percentage for residential building work. Check the contract, ask what any upfront payment covers, and make sure the payment process, receipts and variation rules are clear before work starts.

Progress payments should follow the contract payment process. Check the dates or stages, amount of each payment, how payments will be invoiced, made and receipted, and what happens if you dispute an invoice.

Retentions

If you want to hold money back for defects, get that term written into the contract and take legal advice if needed. MBIE says contracts should explain how defects will be remedied and refers homeowners to the 12-month defect repair period and implied warranties.

Managing the Relationship

Good communication throughout the project prevents misunderstandings and catches problems early. Establish expectations about communication frequency and methods at the start. Regular site meetings or updates keep you informed without requiring constant presence.

Documenting Decisions

Keep written records of all decisions, particularly any changes from the original scope. Email is ideal as it creates a date-stamped record. When discussing changes on site, follow up with a written summary confirming what was agreed. These records protect you if disputes arise later.

For kitchen and bathroom renovations and other complex projects, create a decision schedule with your builder. Know what choices you need to make and when. This prevents rush decisions that lead to regret and keeps the project moving without delays caused by waiting for your input.

Changes during construction are common. Establish a process for handling variations before work starts. MBIE says any change to the building work listed in your contract is a variation, and it is important to ask about price, timeline and building-consent implications.

When Things Go Wrong

Despite best efforts, problems sometimes arise. Work quality disappoints, timelines blow out, or communication breaks down. How you handle these situations determines whether they become minor bumps or major disputes.

Addressing Concerns Early

Raise concerns as soon as they arise rather than letting frustration build. A calm, specific conversation about your concerns is more likely to produce resolution than waiting until you are angry. Focus on the issue rather than personal criticism. Most builders want satisfied clients and will work to address legitimate concerns.

Formal Dispute Resolution

If informal discussion fails, check the contract and follow its dispute resolution process. MBIE says mediation can be tried even if the contract does not provide for it, or if there is no written contract, but both parties must agree.

For disputes with LBPs, you can complain to the Building Practitioners Board if you believe the LBP was negligent or incompetent, but MBIE says the Board cannot award compensation or make the practitioner fix defective work. For qualifying claims, the Disputes Tribunal can hear disputes up to $60,000.

Final Inspection and Payment

Before making final payment, inspect the completed work against the contract, consented plans where relevant, and any agreed specifications. Create a written defects or completion list and discuss it with the builder.

Provide your defects list to the builder in writing and agree on a timeline for remediation. If you are considering withholding payment or disputing an invoice, check the contract, follow the agreed process and get advice where needed.

Retain all documentation from the project, including the contract, invoices, warranties, Records of Building Work from LBPs, and any code compliance certificate or council sign-off for consented work. This documentation can matter for insurance, future maintenance and eventual sale.