Handling a defect claim: a step-by-step process

When a client raises a defect, both sides need a fair, repeatable way to sort it out. This is the process for handling a defect claim, drawn from the MBIE Guide to Tolerances 2015 and the Building Act (ss 362A–V), so builder and client can work off the same authoritative sources instead of arguing over opinions.

The 12-month rule — who has to prove what

Who carries the burden of proof depends on timing:

• If the client notifies a defect within 12 months of completion, the builder must prove it’s not defective — or repair it within a reasonable time.
• After 12 months, the client must prove it’s defective.
• Implied warranties run for 10 years total.

The step-by-step process

Most defect claims can be worked through in order. Each step checks a more authoritative source than the last:

1. Talk first. Client notifies the builder verbally and in writing about the suspected defect. Builder inspects in person, takes photos and notes.
2. Check the contract. What does the contract specify — drawings, specs, schedule of quantities, and an agreed defect tolerance schedule if there is one?
3. Check the consent. Does the consent and its supporting documentation address this, and was it signed off by the BCA?
4. Check manufacturer specs. What did the product manufacturer specify for installation, finish and durability? Get the relevant datasheets.
5. Check NZ Standards. Is there a relevant NZ Standard that defines acceptable workmanship (for example NZS 3604, NZS 3114, NZS 3631)?
6. Check the MBIE Guide. Does the Guide to Tolerances 2015 cover this? Use it as the final reference for aesthetic and finish issues not covered above.
7. Decide together. Most issues can be resolved with photos plus reference to an authoritative source. Document the agreed outcome in writing.
8. Escalate if needed. A Building Code issue goes to the council BCA; a contract issue means seeking legal advice; disputes go to MBIE Building Performance, the Disputes Tribunal, or the Tenancy Tribunal if it’s a rental.

Builder’s checklist when a defect is raised

When a claim comes in, work through this:

• Acknowledge in writing within a reasonable time.
• Schedule an on-site inspection within 5–10 working days.
• Take photos with measurements (use a tape, ruler or scale).
• Check normal viewing distance, not critical lighting.
• Compare to the contract spec, drawings and samples.
• Reference the relevant NZ Standard or the Guide to Tolerances.
• If it is a defect, agree a timeline for repair — a reasonable time per s 362M.
• If it is not a defect, explain in writing with a reference.
• Pursue subcontractors via the usual routes if it’s their work.