Tim Bates of Auckland law firm TM Bates & Co provides an update on the status of the Building Amendment Bill, focusing on the proposed mandatory homeowner warranties imposed by the Bill.
The Building Amendment Bill (BAB) was introduced to Parliament on June 29, 2026, and has passed its first reading. It is now with the Select Committee, whose report is due on December 30, 2026 — with public submissions open until November 2026.
With an election only a few weeks away, there remains some uncertainty as to whether the Bill will find itself into law in the new year. But it is not legislation where support necessarily falls down party lines, so there remains the likelihood that it will form part of New Zealand legislative law in 2027 and beyond.
One of the key changes it will bring about is to introduce a mandatory home warranty, which is the focus of this article, noting that I have outlined other changes introduced in a previous article in December 2025. There are three key requirements before a home warranty is required:
1
There is a requirement for the construction work to be in respect of a residential building project.
2
It needs to involve restricted building work, which is defined as work to the primary structure or the external water moisture management system, including carpentry, foundation, and roofing works. It also includes design work with respect to these aspects.
3
The work to be completed must require a building consent and must be in respect of:
• One or more residential units, or consisting of a new house or a new small-to-medium apartment building (being for two or more residential units of a height of 10 metres or less), or
• The project being for renovation work in relation to one or more residential units in, or consisting of, an existing house or an existing small-to-medium apartment building, and the estimated value of the project is not less than $100,000 inclusive of GST.
Assuming these three requirements are met, then a mandatory warranty will be required for the homeowner as follows:
• Provide an adequate level of cover for all defective building work for the first 12 months.
• Provide cover for defective structure for a period of 10 years.
• It must be a contract enforceable by the homeowner.
• A party to the contract must be a home warranty provider.
• It must be transferable to a subsequent owner.
In addition, the home warranty would need to cover the design aspects as well.
There are significant fines that are applied should a home warranty not be provided in accordance with any certificate issued with the building consent, or should false or misleading statements be given about a home warranty — $50,000 for an individual or $150,000 for a corporate entity.
It is clear that there is a commercial role for insurers to provide here in terms of entering the market and providing these types of warranties for building companies and designers alike.
At the time of writing, it is not clear who is entering the market to provide this kind of cover, and the Bill has been written such that the mandatory home warranty provisions will not apply where there is no one available in the marketplace to provide such a product. However, the change from joint and several liability to proportionate liability is not similarly disapplied, leaving an obvious and potential hole in terms of any potential recovery for a plaintiff.
One surprising omission currently is that apartment buildings which are more than 10 metres in height would not be covered by the mandatory home warranty requirement. This is a remarkable omission considering that there is a long history of leaky building claims affecting multi-unit complexes where the council has had to pay the lion’s share of the costs of repair.
If council is the last man standing but only has to pay 25% of the costs of repair based on proportionate liability, with no home warranty in place, that could leave unit owners with 75% of the cost of repairs unremedied.
Note: This article is not intended to be legal advice (nor a substitute for legal advice). No responsibility or liability is accepted by TM Bates & Co or Building Today to anyone who relies on the information in this article.
