Owner-Builders and Restricted Building Work
What is an Owner-Builder?
You are an Owner-Builder if you:
Have a relevant interest in the land or the building on which the Restricted Building Work is carried out (i.e. ownership), and are an individual (i.e. not a company).
Live in or are going to live in the home (this includes a holiday home, or Bach).
Carry out the Restricted Building Work to your own home yourself, or with the help of your unpaid friends and family members, and
Have not, under the Owner-Builder Exemption, carried out Restricted Building Work to any other home within the previous 3 years.
What is Restricted Building Work?
Restricted Building Work is work which is critical to the integrity of a building. It makes sure the building is structurally sound and weathertight, that's why it can only be done or supervised by tradespeople who are Licensed Building Practitioners (LBPs). Restricted Building Work practitioners include:
- Foundation Specialists
- Brick and Block layers
- External Plasterers
- Plumbers and Gasfitters
The Building Act 2004 now requires that all Restricted Building Work that is undertaken is clearly identified. This means that there is now greater accountability for ensuring that the work is 'built right'. Owner-Builders are not exempt from this.
Can an Owner-Builder build their own home or do work on their home that is Restricted Building Work?
Yes, but the Owner-Builder must meet all the statutory requirements. That means that the standard of the work must be to the same level as if it was carried out by a Licensed Building Practitioners (LBP).
If you are a suitably skilled owner-builder and meet the criteria of owner-builder, you can carry out restricted building work.
However if you have any doubts about your design or building knowledge and skill, we strongly advise you employ a licensed building practitioners to do this building work. It is advisable that any owner considering this, checks their level of building knowledge against:
- The competencies required of a licensed building practitioner (see LBP licensing classes and MBIE's building & construction website on occupational licensing).
- The requirements of the Building Code compliance documents (see compliance documents).
What about work that does not need a building consent, can an Owner-Builder do that?
The MBIE website provides guidance to owners regarding what building work can be exempt from a building consent. It is the owners' responsibility to decide if the work requires a building consent.
However, it is always wise to discuss your project with an officer at your local Council just to be sure. If a building consent is NOT required they will tell you this.
If a building project does need a building consent and you construct a building without one, this is an offense under the Building Act 2004. This could result in heavy fines.
Although a building consent may not be required, the project may still need to get approval from the Council's planning department with regard to the Council District Plan.
Building without planning approval could result in heavy fines (up to $20,000). Check with your local Council - if resource consent is needed, they will tell you.
What do you have to do to get an Owner-Builder Exemption, and when do you get one?
Normally when you apply for a building consent, you would have to declare who the licensed building practitioners are for both the design and construction work. In the case of an owner-builder you will also have to supply a Statutory Declaration in regard to the restricted building work that you will be responsible for.
The Statutory Declaration form needs to be given to your local council with your application for a building consent, or before the construction of Restricted Building Work on your home starts. The Statutory Declaration form is available from MBIE's Building System Performance website under:
- Obligations and responsibilities of owner-builders and their building project
This is a complex document that requires building knowledge in order to fill it out correctly. It is also a legally binding declaration that requires witnessing by a Justice of the Peace or by someone else authorised by law to do so (refer to Oaths and Declarations Act 1957, section 9).
The completed Statutory Declaration will be kept on the property file at the Council so that future purchasers of the property know that the work was carried out by an unlicensed builder. It is an offence under the Crimes Act 1961 (Section 111) to give false information in a Statutory Declaration, and it is also an offence under the Building Act 2004 (Section 369) with a fine of up to $5,000.
Can an Owner-Builder do the design work?
Yes, but like a licensed building practitioner (LBP), an owner-builder doing the design work is responsible for ensuring that the designs and specifications are compliant with the Building Act 2004 and the Building Code. At the time of applying for building consent, you must supply Council with:
Can an Owner-Builder do the construction work?
Yes, but Council must be notified. The owner-builder will have to notify Council using the Statutory Declaration form (Form 2b). This form must be received and approved by the Council either at building consent application or prior to construction beginning.
An owner-builder doing the construction work is responsible for ensuring that the construction work is compliant with the approved plans and specifications, that is, that the construction work is compliant with the Building Act 2004 and NZ Building Code (Building Act 2004, Section 14C).
Even with a Statutory Declaration there are some areas of construction that an owner-builder cannot do unless they are licensed. These include: plumbing, gas-fitting, drain-laying, and electrical work. Suitable licensed people must carry out this specialised work.
Licensed tradespeople can be found on the Registers for Designers and Tradespeople page of this website.
If the owner-builder chooses to have the building plans drawn up by a licensed designer (a Design LBP, Architect, or Engineer) then the designer must supply the owner with a Certificate of Design Work (COW). This must be submitted with the application for a building consent.
If the owner-builder chooses to have some aspects of Restricted Building Work carried out by a LBP, they must notify Council of the LBP's detail PRIOR to construction beginning (use the LBP Notification form).
Upon completion of this work, the LBP must provide the owner with a Record of Work.
The Records of Work must be supplied by the Owner to Council at or before the application for CCC. These forms can be found on the Application Forms and Checklists page.
Can the Owner-Builder get others to help with the design or construction work?
Yes, they can get others to help such as friends and family so long as they are not paid for this work. This is included in the requirements of owner-builder status and in the Statutory Declaration.
What happens if the Owner-Builder wants to change their mind during the project?
The typical scenarios could be:
(i) Stop using the exemption: sometime during construction the owner-builder decides they don't
want to do the construction work and that they want to employ a Licensed Building Practitioners
(LBP) to complete the job.
(ii) Start using the exemption: some way through the construction an owner may decide to terminate
the employment of the licensed building practitioner and intend to finish the job themselves as an
(iii) Some way through the job the owner-builder decides to employee a licensed building practitioner
to carry out particular parts of the construction.
In each situation you must notify the Council of the changes using the Notice of Owner-Builder (form 2C) before continuing with the construction (under Building Publications, see Applying for and using the exemption at MBIE's Building System Performance website).
Can the Owner-Builder build other houses using the Owner-Builder Exemption?
The owner-builder exemption only allows the owner to build a home if they have not carried out restricted building work in relation to a different household unit within the previous 3 years.
What happens when an Owner-Builder sells the home they built, renovated or altered?
As with other legal documents, the completed Statutory Declaration is kept on the property file for the house being sold. The Declaration not only enables owner builders to do restricted building work they wish to on their homes (or use a family member or friend), but also protects future owners in the event of building failure.
What are the liability / obligations regarding an Owner-Builders workmanship?
As with Licensed Building Practitioners, an owner-builders liability extends to 10 years for workmanship.
Licensed Building Practitioners in the building industry are usually covered to fix defects under warranty from the building organisations they belong to e.g., the Registered Master Builders Federation, and the Certified Builders Association of New Zealand. These groups of building contractors have, by mutual agreement, agreed to stand behind the quality of the workmanship of the members of the professional organisations association.
If an Owner-Builder does not belong to either of these, it is unlikely that they will be able to obtain insurances and sureties for this work in the current insurance market.
If an Owner-Builder has retired from the building industry, it would be wise to ask who is providing the unexpired portion of the warranty. For instance it may have been transferred to another building contractor or to a third-party warranty or surety plan provider. This would give the purchaser the added assurance that any problems will be fixed even if the builder is no longer around, if for example he or she has died, or gone out of business.
The Building Amendment Bill No. 4, currently at its second Parliamentary reading, considers compulsory warranties and sureties. However until this becomes law and insurance providers support the proposed changes, it would be wise for purchasers to check if the building work is covered by existing warranty providers. See also Changes in Legislation page.
For more information
- Free access to the Building Act 2004 on the Legislation page.
- See also the DIY, but build it right (MBIE website), and DIY on the LBP site.
- On Owner-Builder exemptions, check out the Homeowner rights and obligations (MBIE website), the Regulatory impact statements (MPI website) and Building regulatory framework (MBIE website). Please see the MBIE website for more information.
Page last updated: 2016-05-24