The Value of a Third Party Build Guarantee

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Do I need a third party guarantee from my builder?

NewBuild recommends limiting pre-deposit payments to your builder to $5,000 to get the drawings and pricing under way. The balance of your unconditional build deposit should be covered by [evidence of] a third party guarantee. NewBuild recommends that you select a builder that can offer a credible third party guarantee.

If you have less than 20% deposit or equity we require the third party guarantee, and while we will always recommend you have one, we will not require this guarantee if you have more than 20% deposit.

Summary of benefits of a third party guarantee:

  • Non completion (getting a new builder in to finish the project and absorbing any additional costs up to certain limits).
  • Structural defects (workmanship and materials) after completion of your home for up to 10 years.
    Both have mechanisms to manage dispute resolution.
  • All providers have mechanisms to manage dispute resolution.

Registered Master Builder's Association (Master Builder's Guarantee Options) and NZ Certified Builder's Association (Halo Guarantee) both offer comprehensive guarantees. Independent builders can also provide a comprehensive guarantee through Builtin Insurance (Builtin 10 Year Building Warranty), which is backed by Lloyd’s of London.

Signature Homes and Golden Homes have their own Guarantees and these are also accepted.