What is an Owner-Builder? | What is Restricted Building Work? | Owner Builder Exemption | Owner-Builder Liability
There is a certain amount of building work you can do yourself on your property (as what we call an Owner-Builder) - and then some work that requires either help by a licensed building practioner, or for you to get an exemption to do the work yourself. Let's take you through this.
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 includes:
- Brick and block laying
- External plastering
- Plumbing and gasfitting
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'. This applies to Owner-Builders.
What about work that does not need a building consent, can an Owner-Builder do that?
Yes, but it must still meet the requirements of the Building Act 2004 and the Building Code. Check Schedule 1 of the Building Act 2004.
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 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 Tauranga City Plan. Building without planning approval could result in heavy fines (up to $20,000). Check with Tauranga City Council - if a resource consent is needed, they will tell you.
Can an 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 (see exemptions below).
A suitably-skilled Owner-Builder can build their own home or do Restricted Building Work on their own home, if they get an exemption
The standard of the work done by an Owner-Builder must be to the same level as if it was carried out by a licensed building practitioner (LBP). The Owner-Builder must meet all the statutory requirements, including getting this exemption for Restricted Building Work (how-to below).
If you have any doubts about your design or building knowledge and skill, we strongly advise you employ a licensed building practitioner to do this building work. It is advisable that any owner considering this, and checks their level of building knowledge against:
How and when to get an Owner-Builder Exemption
Normally when you apply for a building consent, you 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 Tauranga City 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 Performance website under:
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 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 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.
There are a few more things to consider if an Owner-Builder is planning to do design or construction work:
Notes on design work by Owner-Builders carrying an Exemption
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 will need to supply Council with the plans and specification of the house to the same level of detail and compliance as that required of a licensed designer, architect or engineer.
Notes on construction work by Owner-Builders carrying an Exemption
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
What happens if the Owner-Builder wants to change their mind during the project?
The typical scenarios are:
- 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 practitioner (LBP) to complete the job.
- 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 owner-builder.
- Some way through the job the owner-builder decides to employ 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:
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.
Selling your home and Owner-Builder liability
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-builder's 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.
Changes in Legislation
For more information
Last Reviewed: 15/01/2016