Why are warranties important for new builds?

Why are warranties important for new builds?
November 15, 2017

Even if your chosen materials and building systems are known to stand the test of time, obtaining a warranty to ensure your home retains its value, no matter what the world throws at it, is a sensible move.


Essentially a warranty is a promise between the retailer and buyer that their product or service is fit for purpose and can be relied upon to fulfil that purpose. Failing that, it will be replaced or refunded.

A warranty is especially important in the construction industry as it protects your home, its value and your finances from:

  • Poor workmanship.
  • Faulty materials or products.
  • False advertising from sellers.


There are two types of warranties in the building industry: implied warranties and third party. Implied warranties cover the work of your builder, ensuring it’s completed to a reasonable standard and meets the obligations of your contract (i.e. timely completion).

Third-party warranties are the warranties provided by builders associations, product suppliers, and manufacturers.


Limited options if your builder shuts up shop

New Zealand doesn’t have mandatory home owners warranty insurance like they do in Australia, America and the UK. While the New Zealand Building Code will cover your new build for 10 years as long as the builder is still operating, it’s another matter if your builder is no longer in business. If your new build develops a fault and your builder has closed its doors, then there’s not much in the way of cover. It’s especially concerning when, according to Shine Lawyers: “over half of all construction companies in New Zealand will have closed after just four years, and 75 per cent will have failed within 10 years.”

To address this, the industry has set up the New Zealand Certified Builders Association and the Registered Master Builders Association as a means of ensuring quality within the construction industry. Builders certified by these associations can offer a 10-year residential guarantee for new builds and renovations, which includes:

  • Loss of deposit.
  • Non-completion.
  • Structural defects, including weather tightness.
  • Non-structural defects, such as work that doesn’t adhere to the Building Code or premature product failure.

Under certain conditions, they can also guarantee the materials and work done by subcontractors.

However, with Certified builders making up approximately 35 per cent of residential builders, a lot of homes are going without warranty. In some instances, when something has gone wrong and the builder is no longer in business, homeowners have had to resort to suing local councils to recoup their losses.

The takeaway? Make sure your builder can back their work with a warranty. But be aware, warranties are not automatically given; you must fill out the correct documentation and have it sent to the chosen organisation.

Not all warranties are transferable

In some cases, third-party product warranties— particularly for building materials such as timber or fibre cement weatherboard— aren’t always transferable. This is not ideal if you want to sell your new build in the future. Building materials with transferable warranties make for a great selling feature since the next homeowner knows that they won’t be hit by an unexpected expense if a fault arises.


At Palliside, we believe in our product and in its ability to last. While some cladding warranties only last for 15 years, we provide a transferable, 25-year guarantee for all our weatherboards.

Why? It’s because we’re confident in Palliside’s durability and ability to withstand all of New Zealand’s extreme climatic conditions. Unlike timber weatherboard, our uPVC weatherboards don’t warp or bleed resin, or need homeowners to keep them in good condition—in fact, there’s virtually no maintenance required for them at all, and what’s more they’ll never need painting.

Design your dream home with the help of our free home design guide, Building a New Home: Your Design and Planning Guide.

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