Verbal agreement? The CCC may still be yours

Did you know that even a handshake agreement on a residential build can quietly shift key responsibilities onto the builder?

This was the surprise takeaway for many builders at a recent Licensed Building Practitioner (LBP) seminar hosted by PlaceMakers in Wellington in November 2025.

During the seminar, where national law firm Duncan Cotterill was presenting, partner Alysha Hinton spoke to the importance of getting building contracts right and highlighted a regulatory detail that many in the room had not realised applied to their work, despite it coming into law in 2022.

The rule relates to implied contract terms for residential building work costing $30,000 or more (including GST). Under section 362F of the Building Act 2004, residential building work above this threshold must have a written contract between the homeowner and the building contractor. However, the law also recognises that contracts are sometimes incomplete or not written at all.

To help protect homeowners undertaking residential building work, the Building (Residential Consumer Rights and Remedies) Regulations 2014 set out a series of implied contract terms that automatically apply to these projects. These terms are legally binding whether or not they are written into the contract.

In practical terms, this means the law fills in the gaps if a contract is missing key details.

Code compliance certificates and verbal contracts

One implied term that drew particular attention during the seminar relates to who is responsible for obtaining code compliance certificates (CCCs).

Under the implied terms, this requirement applies specifically to verbal contracts. Where residential building work over $30,000 proceeds without a written contract, the building contractor is responsible for obtaining all required CCCs and providing them to the homeowner before submitting their final invoice.

For some builders at the seminar, this requirement came as a surprise, highlighting how the implied terms can still place clear obligations on contractors even when a project begins with a handshake agreement.

CCCs are just one example. The implied contract terms also set default rules for several other aspects of residential building work.

Other implied terms you should know

Where a contract does not set out certain responsibilities or processes, the regulations provide default rules covering key parts of the job, including:

• Building consents and approvals: If the contract does not state who will obtain the necessary approvals, such as building consents, the building contractor becomes responsible by default.
• Variations: If a homeowner requests a change and the contract does not already include a variation process, the contractor must notify the client within 10 working days, outlining the work required, any additional approvals needed and any effect on price or timing.
• Progress payments: Contractors are entitled to request progress payments based on the value of work completed during a defined monthly period. Homeowners must pay within 20 working days after receiving a written demand for payment, such as an invoice.
• Subcontractors: Contractors may engage subcontractors for parts of the job, but they remain responsible for the work carried out and the quality of materials supplied.
• Dispute resolution: If a dispute arises, both parties must first attempt to resolve it through negotiation. If the issue cannot be resolved within 10 working days, either party may refer the dispute to mediation.
• Notices: All notices must be in writing, and may be sent by hand, fax, email, or post.

Protect yourself: get your contracts right

A clear written contract helps both builders and clients understand their responsibilities from the outset, reducing the risk of misunderstandings or disputes. It also sets out how variations, pricing and timelines will be managed, rather than relying on implied terms.

Builders can find guidance on what a residential building contract should include on the Building Performance website, to help protect both themselves and their clients before work begins.