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Building Act 2004

Consumer rights and remedies in relation to residential building work - Remedies for breach of implied warranty

362N: Remedies if breach of warranty cannot be remedied or breach is substantial

You could also call this:

“If a builder breaks a promise that can't be fixed or is really bad, you can ask for money or cancel the deal.”

If the building contractor breaks a warranty and can’t fix it, or if the breach is very serious, you have some options. You can ask the building contractor for money to make up for the building work being worth less than what you paid. The amount would be the difference between what you paid and what the work is actually worth now.

Instead of asking for money, you can also choose to cancel the contract. If you want to do this, you need to follow the steps in section 362P.

On top of these options, you can also ask the building contractor for money to cover any other losses or damage you’ve had because of the breach. This doesn’t include the loss from the work being worth less, as that’s covered by the first option. You can only ask for money for losses that someone could reasonably expect to happen because of the breach.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6371136.

Topics:
Housing and property > Home safety and repairs
Business > Industry rules
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362M: Remedies if breach of warranty can be remedied, or

“If a builder breaks a promise that can be fixed, you can ask them to fix it or get someone else to fix it if they don't.”

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362O: Meaning of substantial breach, or

“This explains when a builder's mistake is big enough for you to cancel the building agreement.”

Part 4A Consumer rights and remedies in relation to residential building work
Remedies for breach of implied warranty

362NRemedies if breach of warranty cannot be remedied or breach is substantial

  1. This section applies in any case where the breach of warranty cannot be remedied or the breach is substantial.

  2. If this section applies, the client may—

  3. obtain from the building contractor damages in compensation for any reduction in value of the product of the building work below the price paid or payable by the client for that work; or
    1. cancel the contract in accordance with section 362P.

      1. In addition to the remedy in subsection (2), the client may obtain from the building contractor damages for any loss or damage to the client resulting from the breach (other than loss or damage through reduction in the value of the product of the building work) that was reasonably foreseeable as liable to result from the breach.

      Notes
      • Section 362N: inserted, on , by section 56 of the Building Amendment Act 2013 (2013 No 100).