Top Questions NZ Homeowners Ask About Building Guarantees (Answered)

When you’re building a new home, the excitement can easily overshadow the fine print. Yet one of the most important decisions you’ll make — one that can protect your biggest investment — is choosing the right building guarantee.

We’ve rounded up the most common questions Kiwi homeowners ask about building guarantees, so you can make informed, confident choices before signing your contract.

1. What is a building guarantee?

A building guarantee is an independent protection policy that covers you if something goes wrong with your build — from major structural defects to incomplete work or builder insolvency.

Think of it as a safety net: it steps in when your builder can’t, ensuring you’re not left footing the bill.

3. What does a typical building guarantee cover?

While policies vary, most reputable guarantees cover:

• Defects and workmanship issues for up to 10 years

• Non-completion (if your builder can’t finish the job)

• Deposit protection, so your upfront payment is safe

• Structural issues that emerge after you move in

Always read the policy carefully — not all guarantees are created equal.

4. Who provides building guarantees in New Zealand?

Only a handful of organisations are authorised to offer genuine independent guarantees in NZ. Look for those approved by MBIE or with a long track record of paying claims.

Avoid “in-house guarantees” that sound official but have no third-party backing.

5. Why do I need one if I trust my builder?

Even the best builders can face challenges — material shortages, cash-flow issues, or unforeseen events. A guarantee isn’t about distrust; it’s about protecting yourself against the unexpected.

It’s like home insurance: you hope you’ll never need it, but you’ll be glad it’s there if you do.

6. Can I transfer the guarantee if I sell my home?

Most quality guarantees like Signature Homes guarantees through Residential Indemity Ltd are transferable to new owners, adding value to your property. Buyers love the peace of mind that comes with an existing protection plan.

7. How do I know if my builder’s guarantee is legit?

Ask for:

• A copy of the full policy wording before signing

• Confirmation it’s independently underwritten

• Proof of current membership or accreditation with the guarantee provider

If your builder can’t provide documentation, that’s a red flag.

8. How much does a building guarantee cost?

Usually between $1,000 – $3,000, depending on the build size and coverage. It’s a small cost for long-term protection and often a requirement for finance approval.

9. What should I look for in a good building guarantee?

• Independence (not builder-issued)

• Comprehensive coverage (deposit, non-completion, defects, structure)

• 10-year protection period

• Transferability

• Clear claim process.

10. What happens if I don’t have a guarantee?

Without one, you could be left paying out of pocket if your builder goes into liquidation or defects appear later. Sadly, many NZ homeowners have learned this the hard way — a guarantee protects you from becoming another headline.

Final Word

A strong, independent building guarantee isn’t a “nice-to-have” — it’s a must-have for every Kiwi homeowner building new. It’s the one thing that protects your investment long after the keys are handed over.

If you’re comparing guarantees or want to know what makes one policy stronger than another, our team can help you unpack the fine print.