Do research before you hire

Do your due diligence before hiring a builder. PHOTO / SUPPLIED

If you're building or renovating, you'll need to employ a builder.

Your choice can have huge financial and psychological ramifications if you get it wrong.

Yet sometimes home owners often don't do anywhere enough research before hiring a builder and end up regretting their decisions after having invested their life savings in the project.

A good place to start for a recommendation of a good independent builder is your architect, if you're using one.

They may know of builders who have worked on their projects previously. Even then, homeowners need to do their due diligence on the builder.

Having said that, avoid one-stop-shop design-and-build houses, says John Gray of the Home Owners and Buyers Association of New Zealand (HOBANZ).

Ask for examples of your shortlisted tradies' work.

Talk to more than one former customer (to ensure you're not being directed to their mates) and ask to see the work.

Go through quotes with a fine-tooth comb. Is everything included? Are they going to cut corners or put the price up mid-way through the work?

Ask how long they've been doing their trade, what qualifications they have, and if they do continuing professional education.

Check if they're members of the New Zealand Certified Builders Association (NZCB) or Registered Master Builders Federation (RMBF). This doesn't guarantee they're professional, but it cuts out some of the cowboys.

Find out who will be doing the work. Is it the builder or subcontractors? Make sure your builder or subcontractors are people you want to work with on a day-to-day basis.

If you're getting expensive work done, make sure you get your lawyer involved and ask them to check out the contract. That is if you have a contract.

Research by the NZCB earlier this year suggested that New Zealand homeowners are too laid back when it comes to written contracts -- sometimes agreeing to work without a contract at all.

The NZCB survey found 51 per cent of homeowners who had used a builder in the last 10 years didn't have a written contract.

Of the work done without a written contract, 22 per cent was for work more than $30,000.

"The survey found that 46 per cent of homeowners think it's the builder's responsibility if something goes wrong with a build or renovation," says NZCB chief executive Grant Florence. "The reality is if there's no written contract in place, this makes it difficult to resolve any issues."

Gray has come across cash jobs without contracts of up to $270,000, which he says is "absurd" on the part of the consumer.

TVNZ went undercover to find out the extent of the cash job problem. The investigation found that most good builders are tied up in the Auckland property boom and Christchurch rebuild and that half of the second-tier builders asked to quote for a job asked to be paid under the table.

Tradies willing to rip-off the Inland Revenue Department are also likely to take shortcuts on their work and could leave homeowners with non-compliant work, says Gray.

All builders and many tradies need to be licensed building practitioners, and double-check their registration on the LBP.govt.nz, and their company status on companiesoffice.govt.nz websites says Gray.

Watch out for builders who regularly liquidate their companies as a way of evading liability for dodgy jobs.

And insist on seeing their professional indemnity and public liability insurance certificates.

It's also a good idea to ask if your builder has a trade qualification.

Anyone getting major building done should get a guarantee, over and above the contract. Both the NZCB and Registered Master Builders offer guarantees.

The guarantees must be paid for over and above the contract and typically cover you for defects in materials, builders walking away and poor workmanship.

But don't abdicate responsibility for choosing a tradie based solely on the guarantee. Builds can and do go wrong no matter how many organisations a builder belongs to. What's more, making a claim can be problematic.

If, for example, you withhold your final payment to the builder because of poor workmanship, you may have voided your cover.

Builders are great fodder for TV's Fair Go, which gets stuck into the Master Builders' Federation guarantee from time to time.

There were so many Catch 22-style complaints that the show's makers took the unusual step of asking members of the public who had successfully claimed to come forward -- to determine if there were any. It did find some.

Other steps, says Gray, when looking for a good builder include:

�Always get an independently drawn up and specified design and also get it independently costed by a Quantity Surveyor.

�Ensure you obtain receipts for all payments and pay by internet to get a proper record.

�Don't pay in advance. Agree on a staged payment plan and ideally use an account such as the BuildSafe Security of Payment Scheme.