Any opinion on the risks we accept if we keep them

This is a very dangerous draconian clause, trust your lawyer here. We had something similar in ours and removed it after it was explained to us what could happen and boy did we have problems with our builder, thank god we listened!. With this in your contract you are giving all power and control to your builder, its not to say that he would abuse this, but he could if things got nasty. See if you get away with putting a mortgage clause on him? If something happens during your build for example damage to site or house caused through negligence via the builder or his contractors which might not be covered by insurance and started a dispute where you withheld money for work already completed, the first thing that would happen is the whole project goes on hold. And they will drag this out! The building act will have you pay out any monies owed to the builder for work completed regardless of the situation as you would need to go to court to deal with the dispute issue if it cannot be resolved with the builder. This is where the clause becomes a problem. If you withheld money then the builder could cancel the contract (using the act) and claim the mortgage even though he was the cause of the dispute!!!!!!!!!. Once you have paid up monies owed and unless you are prepared financially for the “unexpected” and the months of legal battles etc then he would have no right to use this clause and would be an idiot to do so,, but if he’s dodgy and knew you didn’t have the money to fight he could abuse it, turning a bad situation into an even worse one for you. Also, what happens if he goes under while you are going through the dispute process and hes used the clause and taken a mortgage out on you? What happens here? There are alot of things that can go wrong in a build dont think it wouldnt happen to you its common place these days, and the home owner is the least protected! Master Builders certainly wont be there for you that is shocking that that clause is in there! Find a builder with a good reputation who doesnt have to many builds on the go at the same time as they dont need to rely on clauses like this if they are good guys! Remember you are paying for expensive legal advice for a reason! Be warned re the home building groups, read this blog in depth!

Hi Kevin Have a read of our page here – http://www.buildingguide.co.nz/planning/building-contract/. We recommend against using the Master Builder contract and recommend the Building Disputes Tribunal contract instead. There’s a link to their contract here – https://www.buildsafe.co.nz/BUILDRIGHT+Conditions+of+Contract.html. Has your builder given you the Prescribed Checklist? They must as it’s mandatory. If they have not, will not and aren’t prepared to use a different contract, you may wish to review your arrangement with them.

Hi Does this clause still apply after hand over and all moneys are paid to the builder? What happens when you have a dispute during the 12 month defect period and they wont fix defects or damage that was noted on handover sheet. Cheers