What you should know when building

Building a new home is a great adventure, but it can feel a bit overwhelming. Where do you even start? There’s lot to think about, plan and project manage.

When you choose a Master Builder, they will be able to talk you through the process. But, in the meantime we have outlined some of the things you will need to factor into your building project.

  • Building a new home, as opposed to renovating, means that your home will meet newer, more rigid, building and compliance standards.  
  • You get what you want, a home designed for your family and lifestyle.  
  • Less ongoing maintenance. 
  • In any building project there are unknown factors, particularly if the project is large or complex. In a new build, many of these can be resolved before construction begins, during the scope and design stage. 
  • Building on an empty section is more complex than altering or renovating an existing house. It involves more paperwork and legal processes — whether you build from scratch or move a house onto the section. 
  • The location of your land, and the position of your building site on it, can have a big impact on your project. 
  • If you're planning a rural build, there might be other things to think about. For example, do you need a septic tank? Will you have to store your own emergency water supply for putting out fires? 
  • Talk to your council to get a better understanding of your land, how your ideas will fit and what consents, resource and any other permits you will need. 
  • The council can also produce a project information memorandum (PIM), a report specific to your project that can make planning and design easier and more accurate. 
  • Maybe the key thing that you need to remember is that for all significant building projects, make sure you get independent legal advice from someone who is an expert in construction projects, understands the contract and can provide quality advice. 

Building ideas

Look at friends’ homes, show homes, home shows, magazines, television lifestyle programmes, social media channels, and any other place you can think of for inspiration. Get a feeling for what is available and the approximate prices. A great place to start is the Registered Master Builders House of the Year website where you will see the best new homes and renovations across all budgets and categories. 

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Checking the council’s files

The only way you can be sure you have complete information about the site is to ask to check the council’s files on the property.

You can go into the council’s office, but it might save time if you make an appointment to meet with a planner. Give them the details of the section and ask to see the files for the site. You may have to pay to view any files that have been archived.

In the files, look for permissions or resource consents that allow specific activities. The file should also show up old issues, like complaints made by current or past neighbours in the area. If there is anything of interest, you may be able to make photocopies to take with you.

Ask the planner:

  • How is the site zoned?
  • Are any nearby properties zoned differently?
  • What activities are allowed in the zone?
  • What can the neighbours do that might affect my enjoyment of the site, such as building up and blocking the view?
  • Are there any protected trees on or close to my site?
  • Is there anything in the district plan that may affect the property, such as a proposed motorway?
  • Are there any applications or proposals for neighbouring properties? For example, the quarry down the road may be proposing to increase extraction which could result in more noise and traffic.
  • This is also a good opportunity to ask about which services (water, power, phone, mobile phone, gas), are located near the property. This could affect where you can build, or could add extra building costs.
  • If the site has a shared driveway check what type it is (i.e. whether it is a legal right of way), and what your access rights and maintenance responsibilities might be.

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Choosing a designer or architect

A home designed by an architect often has a perceived value factor. If it stands out as being unique, it will typically attract a higher resale price than others of the same size and age. However, it should be noted that many architectural designers are equally capable of producing distinctive and innovative designs.

Many architects and architectural designers prefer to carry out a substantial role in the management of the project, as they will have a keen interest in seeing their designs faithfully followed by the builder and subcontractors.

This ‘management’ role is known as contract administration. It involves monitoring the construction to ensure the building develops consistent with the design, handling builder and client queries during construction, discussing and approving variations to the contract, and assessing and approving progress payments and inspection upon completion. Some designers may not be able to offer comprehensive contract administration.

The choice of designer will probably come down to how much money you want to spend. But it can be a mistake to stint on the design phase. Opting for a less experienced or qualified person may cost you in the long run. If money is really tight, a skilled architect/designer should be able to explore ways to make your budget and ideas fit.

You need to be confident the person you choose understands the Building Code requirements and the need for good materials and construction methods to avoid problems like leaky buildings. A good designer will be able to advise you on the type of design and materials most suited for your new home and the site you have chosen. You may have to re-think or discuss the design to avoid high-risk weathertightness features in the design.

It is advisable to use a member of a design profession experienced in working on the design and detailing of buildings. They should be able to provide you with an appropriate design, a detailed contract and guide you through the consent process.

You can also ask your Master Builder to recommend an architect or a designer.

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Consents

Unless your job is really small, you will need a Building Consent and possibly a Resource Consent from your local Council. It is important that you factor this into your planning as it may take longer and cost more than you had initially thought. 

On completion of the work, you are responsible for obtaining a Code Compliance Certificate (your builder may do this for you). Discuss with your builder any potential delays or issues they foresee with your project. Keep up-to-date with the requirements of the Building Act through MBIE - Building and Housing.

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Finances and Budgeting

Be very clear about the budget of your project, as this affects every step.

There are many options for financing new builds. Talk to your bank or mortgage broker as they can give you a good idea early on as to what you can afford.

Shop around as interest rates can vary greatly. Be sure to read the fine print and get legal advice before signing any finance deals. Once you know your budget, ensure you prioritise your ‘wants and needs’. Needs should always come first. Wants can be leveraged into your building project where the budget will allow.

Your builder and architect should be able to provide you with some good ‘rule of thumb’ advice to help formulate your requirements and let you know if you need to add engineers to your project.

It’s very important to know the difference between a quote and an estimate. An estimate is only an approximation of what the estimator thinks the job will cost. A quote is an explicit promise of what a job will cost – always get a quote in writing. We also recommend you get three comparable quotes.

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Getting a LIM

A Land Information Memorandum (LIM) provides information held by the council about a particular property, which you may not get off the district plan alone. 

You can apply for a LIM at any time, but it is essential when you are thinking of buying a section.

The information you may get from a LIM will vary between councils. Generally, you could expect to find out about:

  • Rates
  • Land features and environmental issues, such as erosion or flooding
  • Restrictions on land or building use
  • Resource consents issued
  • Potential contamination by hazardous substances
  • Details about septic tanks and hazardous substances, etc
  • Storm water or sewage drains

There may be information about wahi tapu sites (sacred areas) and some councils may provide aerial photographs, building plans and drawings.

The LIM information might help you make the decision about whether to buy the section and whether the price is fair. For instance, if you have to do major earthworks to fix the drainage you might reconsider the price of the section.

You should make getting a satisfactory LIM, and your lawyer’s approval of the LIM contents, a condition of your sale and purchase agreement (see information below), allowing yourself enough time to obtain and study it.

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How to apply for a LIM

You can apply to get a LIM at your local council. Ask them for an application form or download it off your council’s website. You may have to provide a copy of the certificate of title and there is a fee which varies depending on the council and the property involved. The council must produce the LIM within 10 working days.

However, a LIM may not tell you the complete story. The council does not actually do a site inspection to verify the information in the LIM. It is possible the council has not been notified of something that could affect you, or something may have been left off the LIM by mistake.
 

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Protection

It is standard practice, in many contracts, for a "withholding sum" to be retained for a period of time. If there are any defects noticed in this period, you can contact the builder and get them to fix it.

If you have engaged a Registered Master Builder, you are eligible for a Master Build Guarantee which gives you peace of mind for potential remedial work that may be required following the completion of your project.


If you see something that doesn't look right on your building project, raise it with your builder immediately. Builders are extremely proud of the work that they do. If a mistake is made, it is usually unintentional. Once again the key to a successful building project is a good relationship with your builder and this requires open and honest communication.

To read more about new consumer protection measures which took effect on 1 January 2015 please consult this Ministry of Business Innovation & Employment website.

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Sales and Purchase Agreement

When you buy a section from someone, you are entering into a contract - you are the purchaser and they are the vendor. You will sign a sale and purchase agreement, which will contain the terms and conditions for purchase of the section.

The sale and purchase agreement will usually be drawn up by the person selling the section, or by the real estate agent.

There are a couple of standard forms available. The most common one is the Auckland District Law Society (ADLS) form which has been in use for many years. 

Whatever form is used, the sale and purchase agreement should contain:

  • The details of the certificate of title.
  • Any improvements to be made by the vendor before settlement.
  • The price, including the deposit.
  • Provision for adjustments to be made to land tax, council rates and water rates.
  • The rights of the parties to cancel the contract.
  • Warranties which relate to such matters as council consents under the Resource Management Act 1991.
  • Special clauses making the agreement conditional on such things as:
  • Your solicitor’s approval of title;
  • A satisfactory valuation;
  • Your approval after you have obtained a LIM;
  • You arranging suitable finance.

The date when the agreement becomes unconditional and the settlement date.
Before signing anything, read the agreement thoroughly. And get legal advice.

Both you and the vendor carry risks in signing an agreement for sale and purchase. Once signed, it is a binding contract.

However, if the agreement is conditional and one of the conditions is not met – for example, your finance falls through or you find something on the LIM that means you won’t be able to build the house you want – then you may be able to cancel the agreement. But once all the conditions are met, you must follow the purchase through.

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The Building Contract

Master Builder recommends that anyone who engages a Registered Master Builder should use their standard RBC1Building Contract. This contract contains comprehensive payment schedules along with other valuable protection.  

When entering into a building contract with a Registered Master Builder, we recommend that you incorporate a form of payment schedule into your building contract. The Staged Payment Schedule and Progress Payment Schedule are examples of this.  They are included in the RBC1 Building Contract. These are important as it allows you to keep track of all monies paid and ensures that you only pay for work that has been completed so should something go wrong you have enough money left to complete the build with someone else. 

We strongly recommend all homeowners get independent legal advice when entering into a building project. Your lawyer should review your building contract and your guarantee.  They should take you through both your contract and the guarantee to ensure you know your rights and obligations, as well as those of your Builder or Master Builder. Ideally find a lawyer who has some experience with construction projects, as they will be best placed to explain the contracts to you and identify the key risks that you face.  Remember that this is one of, if not the, biggest investment you will ever make and it is worth investing in good quality legal advice from the right lawyers.  

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Time

There are many factors that can delay the building process, such as waiting on suppliers or the weather. We advise keeping in contact with your builder and maintain realistic expectations about the potential for unforeseen circumstances to arise. Honest and open communication is key.

If you have serious concerns about the ability of your Master Builder to finish your build, you should contact Registered Master Builder Association if you have a guarantee to discuss this.  If they feel that there is genuine concern with the delays, then this could lead to further action by Master Build Services.

Our Registered Master Builders will help you through these steps. Find a Master Builder

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Types of designer

Architects

An architect is a person who is registered with the New Zealand Registered Architects Board (NZRAB). Only a person who has met the registration requirements of the NZRAB can call themselves an architect, and they must hold a practising certificate issued by the NZRAB to be able to practice.

Most architects have studied architecture at university and gained an architectural degree. An architect is competent in the design and coordination of all building elements, services and site works, as well as the management of each stage of the building process, from concept to completion. An architect will be able to consider your ideas and come up with distinctive and innovative solutions for you that can be built within agreed cost and time parameters. 

Many architects in New Zealand belong to the New Zealand Institute of Architects (NZIA).

Architectural designer

An architectural designer is someone who specialises in building design and construction, from conception to final certification. They can provide a service that includes design, full working drawings, contract documentation and contract administration.

Although architectural designers are entitled to practice ‘architecture’, they cannot call themselves ‘architects’.

Architectural designers will probably have studied at a tertiary institution, and are specifically trained in the technical aspects of design and detailing. They should also be familiar with all the Building Code and local authority requirements (such as building and resource consents).

Many architectural designers are represented by Architectural Designers New Zealand (ADNZ).

Architectural draughtsperson

An architectural draughtsperson can draw up plans from your basic ideas. They will be cheaper than an architect or architectural designer, but you may not get the same design flair.

This is a good low-cost option in many situations. For example, if you want your laundry redone, a draftsperson can prepare the drawings and instructions for the builder, plumber and electrician.
They usually have technical institute training and some may be members of ADNZ, while others may be connected to the Design Association of New Zealand (DANZ)

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Using a lawyer

We strongly recommend all homeowners get independent legal advice when entering into a building project. Your lawyer should review your building contract and your guarantee.  They should take you through both your contract and the guarantee to ensure you know your rights and obligations, as well as those of your Builder or Master Builder. Ideally find a lawyer who has some experience with construction projects, as they will be best placed to explain the contracts to you and identify the key risks that you face. Remember that this is one of, if not the, biggest investment you will ever make and it is worth investing in good quality legal advice from the right lawyers. 

Before you sign anything, discuss the legal details with your lawyer, i.e. the certificate of title, information in the LIM and council files, and the terms in the sale and purchase agreement. 
 
Basic services from a lawyer won’t include a check on zoning, and other specific information about the site unless you ask them to do this. 
 
The lawyer can advise you about items on the title like a right of way, how many other people have the right to use it and what obligations users have to maintain it. 
 
They can help you negotiate the price and help you organise finance. 
 
A lawyer can also advise you about your ownership of the site – whether you want to own it jointly with your partner or spouse, or in differing shares with your partner, spouse or someone else, depending on your circumstances. 

For more information on the services lawyers can provide, go to the Property Law Section of the New Zealand Law Society website.

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Variations

It is common to change your mind on what you want once a building project is underway. These are called variations and should be discussed with your builder as soon as possible. There may be reasons why the changes cannot be made, or such changes may incur more cost. Asking early and obtaining quotes on any potential variations ensures effective communication between you and your builder and ensures everyone’s expectations are being met.

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What's in a PIM?

A PIM (Project Information Memorand) is a report that contains Council information which may affect your proposed building project. It provides information about the work site that may have an effect on the work. Planning restrictions, the location of stormwater drains and ground conditions are some examples.

It may tell you about:

  • Protection of the land or buildings, for example, by the Historic Places Trust
  • The location of services, such as water and waste systems on the site and adjoining land
  • Land details such as ground stability, geological history, areas that have been filled, or have been unstable or if there is any risk of flooding
  • Permitted footpath crossing points
  • District plan non-compliances

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How to apply for a PIM

A PIM can only be applied for by someone who is planning a specific project and may need a building consent (see information below).

You can apply for a PIM at the preliminary design stage of the project or at the same time as you apply for building consent. If you apply for a building consent without applying for a PIM, your consent application will be treated as including an application for a PIM.

 

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