The Value of a Third Party Build Guarantee

Mbcblogos Jpg

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:

  • Loss of deposit (up to certain limits) should your builder not be able to start your project once you have paid your deposit 
  • Non completion (getting a new builder in to finish the project) 
  • Structural defects (workmanship and materials) after completion of your home for an agreed number of years 
  • Both have mechanisms to manage dispute resolution

Registered Master Builder's Federation (Master Builder's Guarantee Options) and Certified Builder's Association (Certified Builder's HomeFirst Guarantee) both offer comprehensive guarantees.

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