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Owner-builder exemptions

A suitably-skilled owner-builder can build their own home or do restricted building work on their own home, if they get a Council 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 checks their level of building knowledge against:

  • the competencies required of a licensed building practitioner and MBIE's building website on occupational licensing
  • the requirements of the Building Code compliance documents.

How 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 is given to 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.

Homeowners: owner-builder Exemption

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 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.

Things to consider

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 us of the changes by: 

  • Using the notice of owner-builder form before continuing with the construction
  • Find out about owner-builder exemptions forms at MBIE's building 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.

Selling your home with 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 is owner-builder liability

As with licensed building practitioners, an owner-builder's liability extends to 10 years for workmanship.

Licensed building practitioners 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 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.


Last Reviewed: 01/02/2018
 

 
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