Building (Residential Consumer Rights and Remedies) Regulations 2014

Schedule 3 Implied terms

rr 7, 8

1 Building consents

1.1

The building contractor undertakes to obtain all necessary approvals, including building consents, before commencing the building work.

1.2

If any approval or consent is issued subject to conditions, the building contractor must, as soon as practicable, advise the client by notice of those conditions.

1.3

If any approval or consent is issued subject to any conditions that will require a variation to the building work, the building contractor must advise the client, by notice, no later than 10 working days after the date the consent is issued, of—

(a)

the building work that will be required to achieve the variation; and

(b)

the effect (ie, the increase or decrease), if any, on the quoted or estimated price for the building work; and

(c)

the effect, if any, on the due date or the estimated due date for completion of the building work.

1.4

If the terms of the variation are not agreed within 10 working days of notice being given under clause 1.3, either party may, by notice, cancel the contract.

1.5

Notices under this clause must be in writing, despite anything to the contrary in the contract.

2 Code compliance certificates

2.1

The building contractor undertakes to obtain all code compliance certificates.

2.2

The building contractor must provide the code compliance certificates to the client before the building contractor submits its final payment claim under the contract.

3 Variations

3.1

The client may ask the building contractor to carry out variations to the building work.

3.2

If a variation requested by the client will affect either—

(a)

the quoted or estimated price for the building work; or

(b)

the due date or the estimated due date for completion of the building work,—

the building contractor must, within 10 working days after receiving the client’s variation, advise the client by notice of the matters set out in clause 3.3.

3.3

If clause 3.2 applies, the building contractor must advise the client by notice of—

(a)

the building work that will be required to achieve the variation; and

(b)

any additional approvals or consents that will be needed; and

(c)

the effect, if any, on any existing approvals or consents for the building work; and

(d)

the effect (ie, the increase or decrease), if any, on the building contractor’s quoted or estimated price for the building work; and

(e)

the effect, if any, on the due date or the estimated due date for completion of the building work.

3.4

The client may agree to the variation either by notice or by countersigning the notice provided under clause 3.2.

4 Payments

4.1

The building contractor is entitled to progress payments in accordance with this clause.

4.2

The amount of a progress payment must be calculated by reference to—

(a)

the relevant period; and

(b)

the value of the construction work carried out, or to be carried out, during that period; and

(c)

any other relevant provisions of the contract.

4.3

For the purpose of clause 4.2,—

(a)

the relevant period is—

(i)

the period beginning on the day of the month on which construction work was first carried out under the contract and ending on the last day of that month (ie, the first period); and

(ii)

each subsequent month:

(b)

the value of construction work must be calculated with reference to—

(i)

either—

(A)

the contract price for the work and any other rates or prices set out in the contract; or

(B)

if the contract does not expressly provide for the matters referred in subsubparagraph (A), the reasonable value of the work; and

(ii)

any variation to the construction work authorised under the contract; and

(iii)

if any work is defective, the estimated cost of rectifying the defect.

4.4

Progress payments are payable 20 working days after a written demand for payment (made in accordance with the contract) is received or deemed to be received.

4.5

The building contractor is entitled to submit payment claims in accordance with Part 2 of the Construction Contracts Act 2002.

5 Subcontractors

5.1

The building contractor may engage a subcontractor or subcontractors to undertake any part or parts of the building work. However, the building contractor may not subcontract the whole or substantially the whole of the building work.

5.2

If the building contractor elects to subcontract any part or parts of the building work, the building contractor remains responsible and liable to the client for—

(a)

any building work undertaken by the subcontractor or subcontractors; and

(b)

the quality and performance of any materials supplied by the subcontractor or subcontractors.

6 Dispute resolution

6.1

If the building contractor or the client considers that a matter in relation to the contract is in dispute, that party must serve notice on the other party advising the other party of the nature of the dispute.

6.2

Both parties must use their best efforts to resolve any dispute through good faith negotiations.

6.3

If a dispute cannot be resolved within 10 working days of notice being given under clause 6.1, either party may serve written notice on the other referring the dispute to mediation.

6.4

The mediator must be agreed between the parties. However, if the parties cannot agree on a mediator within 5 working days of the matter being referred to mediation, a mediator must be appointed by the President of the Arbitrators and Mediators Institute of New Zealand.

6.5

Each party must pay its own costs associated with the mediation.

6.6

Despite the dispute, each party must continue to perform its obligations under the contract as far as practicable given the nature of the dispute.

7 Notices

7.1

All notices under this contract must be in writing and either delivered by hand or sent by fax, email, or post to a contact address that has been provided by the relevant party.

7.2

A notice is deemed to be received,—

(a)

if it is personally delivered, when delivered; or

(b)

if it is posted, 3 working days after posting; or

(c)

if it is sent by fax, on production of a transmission report (by the machine from which the fax was sent) that indicates that the fax was sent in its entirety; or

(d)

if it is sent by email, when the email leaves the communications system of the sender, provided that the sender—

(i)

does not receive any error message relating to the sending of the email; and

(ii)

receives confirmation that the email was delivered (which confirmation may include an automated delivery receipt from the communications system of the recipient).

7.3

Despite clause 7.2, any notice received after 5 pm, or received on a day that is not a working day, is deemed not to have been received until 9 am on the next working day.

Michael Webster,
Clerk of the Executive Council.