Dealing with disputes

How you settle a dispute with your tradesperson will depend on:

• what's in your contract
• the value of the work
• whether you're able to reach an agreement with your tradesperson, without help from a third party.

Resolve it yourself

Try and talk it through first. It might simply be a mistake or misunderstanding. It's cheaper and less stressful, in the long run, if you and your tradesperson can sort things out yourselves.

When communicating with your tradesperson:

• Voice your concerns as soon as possible — they may not realise there is a problem.
• Put your views across clearly — writing it down first can help.
• Be open to what the other party has to say.
• Try to understand the other party’s point of view.
• Check your tradesperson has understood your concerns.
• Try to come up with a range of options to sort things out — including possible compromises.
• Have realistic expectations about what you expect to happen.
• Make yourself available if your tradesperson tries to contact you.
• Keep talking and listening even when you can't agree.
• If you can’t solve the issue first time around, agree another time when you can try again.
• Stick to the issues and be respectful, including in voicemail, text or email messages. A hasty, incomplete or poorly worded message can create confusion or unnecessary ill-feeling.

Record what you agree in writing in case you need to refer to it later.

If your issue is about workmanship you can decide to hire a building consultant to do an independent check. Your tradesperson may agree to split costs.

Check your contract

For building work over $30,000, look to your contract. It should say what dispute resolution process to follow, and what to try first eg mediation and if that fails, adjudication or arbitration. If you've taken out a builders guarantee, check to see if it covers disputes.

Consumer Guarantees Act

Read more about Issues after your building work has finished

No contract or disputes process

If you don't have a contract or if your contract doesn’t tell you which process you should follow to settle a dispute, you can use the default clauses in the Building Act.

The default clauses in the Act cover several aspects of a building contract, including:

• building consents
• variations
• payments
• subcontractors
• dispute resolution
• notices.

They apply to all residential building work agreements, whether they are incomplete, unwritten, by handshake or verbal.

Default clauses will automatically be considered part of your contract if:

• you don’t have a written contract for a project valued at or above $30,000 plus GST (a requirement)
• the contract doesn’t include the information the Building Act says it should
• you don’t have a written contract.

A default clause won’t override an existing clause in your contract on a similar topic. For example if you have a payment schedule in your contract it won’t be replaced by the payment default clause.

Read the full default clauses(external link) in the Building Act regulations on the New Zealand Legislation website.

Disputes Tribunal

For lower value work, the Disputes Tribunal can be an inexpensive way to sort out issues with your tradesperson. It costs less than $200, depending on the value of your claim. The tribunal deals with claims up to $30,000 if both parties agree.

It can help with disputes about:

• whether a tradesman has done work properly
• the amount of money charged for work done

Your application should explain the situation and say why you think it is a dispute.

At the Tribunal hearing, a referee will hear the evidence and make a ruling based on the law about what's fair and just in the circumstances. It is a court building but the process is less formal. The ruling is binding and can be enforced by the courts if necessary. You can't have legal representation at the hearing, but you might want to seek legal advice beforehand.

How to make a claim to the Disputes Tribunal(external link) — Disputes Tribunal

What to expect at a hearing(external link) — Disputes Tribunal

Mediation, arbitration and adjudication

You can use mediation, arbitration or adjudication to resolve your problem with the help of a neutral third party. Each option has a different process and outcome — the one you choose will depend on:

• whether you and the other party can agree
• the role you want to play in agreeing the outcome
• the money you're prepared or able to pay to resolve the problem.

You might want to get some legal advice, or ask another tradesperson for a technical opinion about the problem before you start, so you're entering discussions armed with good information.

Mediation

Mediators help you discuss issues and narrow your differences, until you reach an agreement. It's generally the quickest and most cost effective way to formally settle your dispute. You may be able to sort out your problem in a couple of weeks.

Mediation relies on you and your tradesperson being open to finding a solution. In most cases decisions are not binding, meaning neither of you are legally obliged to do what you agree.

Arbitration

Going to arbitration is similar to going to court, except:

• an arbitrator and not a judge hears your case
• it is held on private - and not a public court

Arbitration can be expensive. However decisions are final and legally binding. The process can take six months to a year.

Adjudication

Adjudication is aimed specifically at settling building disputes. It's less formal than going to arbitration and is generally quicker — around six weeks.

The adjudicator's decision is legally binding, but can be overturned by taking the case to arbitration.

Mediation, arbitration and adjudication(external link) — Building Performance

Dispute resolution services

These organisations are approved by the Minister for Building and Housing to hear building disputes:

• Arbitrators' and Mediators' Institute of New Zealand Inc(external link)
• Adjudicators Association of New Zealand(external link)
• Building Disputes Tribunal(external link)
• Fairway Resolution Limited(external link)
• Royal Institution of Chartered Surveyors(external link)

Determinations

Determinations are legally binding rulings made by the government. You may need to apply for a determination if you're in dispute about:

• whether work complies with the Building Code
• a council decision, eg the council is refusing building consent.

Determinations(external link) – Building Performance

Court

Going to court can be expensive and take a long time. It should be a last resort for resolving problems with a tradesperson. You should get legal advice as early as possible, especially if there's a lot of money in dispute.

To invoke the Building Act’s implied warranties, you have to take the matter to the District Court or High Court.

Courts information(external link) — Ministry of Justice