Master Build Guarantee and Constructive — supporting members in the current environment

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David Kelly

RMBA chief executive David Kelly reminds members that a range of online services is available to support them and their clients during a time when the economy is front of mind for everyone.


As the election draws nearer, the economy is front of mind for everyone. That also means navigating the current downturn.

Master Builders is continuing to engage with all political parties on the settings that will make the most difference to our sector.

There are also steps that you can take to ensure you are prepared for current conditions.

We offer a range of online services to support you and your clients. This includes our contract and Guarantee, which are a key part of the Master Builders offer, and should be a strong selling point for your business.

Setting up to succeed

Whether it’s a residential or commercial build, how you set the project up at the beginning can determine its success. Ensuring the contract and procurement process is open and transparent, and provides a fair balance of risk, is a critical first step.

As a Master Builder you have access to New Zealand’s leading contract — RBC1 — which is reviewed regularly to ensure it is right for market conditions.

A key feature of the contract is the provision for price fluctuations, which ensures transparency and allows a fair balance of risk for you and your clients.

We recommend you exercise caution before removing these clauses or offering fixed-price contracts in the current environment.

We also want to remind you to ensure all variations and product substitutions are discussed and agreed in advance, and recorded in writing with your clients.

This is an area where we are seeing some confusion at present — and it can lead to tricky disputes if not covered properly at the time.

We have a range of resources online to support you with the contract and negotiations, and this will be a key focus at our upcoming Constructive Forum.

Protecting your clients with a guarantee

For many of your clients, one of the most important factors in choosing a Master Builder is the Master Build 10-Year Guarantee.

However, we know there is also some misunderstanding in the market about the guarantee and what it means. We are working hard to ensure we clearly communicate this important aspect of the build process — and need you to also play your part.

It is vitally important you discuss the guarantee with your clients. Under New Zealand law, if your organisation has access to a guarantee, you are required to offer it to your clients.

If your client decides not to take one out, ensure they sign the waiver and you provide this to us. This protects them and you.

We also recommend you encourage your clients to discuss the guarantee with their lawyer to ensure they understand what is covered and what their obligations are. 

For most clients, building a home will be the biggest investment of their lifetime. While the vast majority of builds go smoothly, sometimes things can go wrong, or a builder’s circumstances might change.

The Master Build 10-Year Guarantee provides clients with support to complete their project, and protect their investment if something does go wrong.

Our guarantee is the market leader. It is the most comprehensive residential guarantee in the market as it provides cover for loss of deposit and non-completion.

As a result, customers and most banks request it by name. There are materials available on Offsite, the Master Builders members web site, to support you in discussing the guarantee with your clients.


• Constructive 2023 — Working Better to Build New Futures

We are due to launch an election manifesto in the coming months, which sets out the regulatory settings that will support our sector and the wider economy.

The themes and initiatives will be discussed at our upcoming Constructive Forum, and I hope to see you there.

This is the year for action. Addressing the boom/bust cycle must be a key focus for Government. We need to focus on how we can support our workforce so we emerge stronger as the market corrects.

Constructive will also discuss how we can lift productivity by addressing consenting and poor procurement practices.

Also to be discussed will be the sharing of new approaches and technologies that can help us tackle climate change and create more sustainable buildings that won’t compound our affordability challenge.

Now is the time for the sector to come together and take action. This year’s Forum will be held in Auckland on August 30-31.

For more information visit www.constructive.org.nz.

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