What is a defects liability period?
A defects liability period is a contractual window after practical completion during which the principal (your client) can notify you of defects and require you to rectify them at your own cost. It is your obligation to return, fix the problem, and get sign-off that it has been done. The DLP is not a quality guarantee for the whole life of the building. It is a defined period of post-completion accountability.
DLP is triggered by practical completion, the milestone where the building is complete enough for the client to take possession and use it for its intended purpose. Minor items may still be outstanding at practical completion, but the substantial works are done. From that date, the DLP clock starts.
The end of the DLP is the trigger for final retention release under most contracts and under the Construction Contracts Act 2002. Until the DLP is over and defects have been cleared, that retention sits in a trust account and it is not yours.
The DLP is not the end of your liability for serious defects. It is the end of the period in which you have the contractual right to fix things yourself before anyone else gets involved.
How long is the DLP in NZ, by contract type?
Duration varies by contract form. Know what your contract says before practical completion, because that is when the clock starts.
| Contract Form | Standard DLP Duration | Notes |
|---|---|---|
| NZS 3910:2023 (commercial) | 12 months (default) | Special Conditions can extend this. Check your contract particulars. For the technical statutory detail, see the NZS 3910 DLP reference article. |
| NZS 3902 (residential) | 12 months | Standard residential contract for licensed building work. See the RBC1/RBC2/NZS 3902 comparison for how these forms differ. |
| Master Builders RBC1 / RBC2 | 12 months | Master Builders residential contracts include a 12-month defects liability period as standard. |
| Bespoke commercial | 12 or 24 months | Government and institutional clients often negotiate 24-month DLPs. Check your conditions. |
| Building Act 2004 (implied warranty, residential) | 10 years (structural), 10 years (weathertight) | This sits on top of your contractual DLP. It does not replace it. Section 396 sets these minimums. |
If you are working under a bespoke contract drafted by the client's lawyer, the DLP duration could be anything they negotiated. Read the contract. If it says 24 months and you missed it, you still have to honour it.
What are your responsibilities during the DLP?
Once practical completion is certified, you have specific obligations that run for the duration of the DLP. These are not optional and they are not the client's problem to manage. They are yours.
Respond to defect notifications
When the client notifies you of a defect, you have to respond within a reasonable time. Most contracts specify a timeframe, often 10 working days for non-urgent defects and 24-48 hours for anything that creates a safety issue or causes immediate damage. Read your contract and know the timeframes before you get a defect call.
Do not ignore notifications. An unanswered defect notice gives the client grounds to engage another contractor to do the remedial work and charge you for it. That is a far worse outcome than returning to site yourself.
Fix defects that are your responsibility
Not every issue that appears after practical completion is your defect. Fair wear and tear is not your problem. Damage caused by the owner or their tenants is not your problem. Design faults by the architect or engineer are not your problem unless you had design responsibility. But if it is a workmanship or materials issue, it is yours to fix, at your cost.
If you are unsure whether a reported issue is your responsibility, visit the site and look at it before deciding. Refusing sight-unseen creates conflict. Go, assess, and then have the conversation about who is responsible.
Keep records of every defect visit
Every time you attend site for a defect, write a brief note. What was reported, what you found, what you did, and whether you consider it resolved. Get the client or site representative to sign it off if you can. If a dispute arises at month 23 about whether something was fixed during the DLP, a site attendance record from month 8 is worth a lot more than your memory of the visit.
What defects are most commonly reported in months 1 to 12?
I've seen the same categories come up repeatedly across residential and commercial jobs. Knowing what to expect lets you be proactive rather than reactive.
Months 1 to 3: settlement and shrinkage
Plasterboard cracking at corners, around windows, and at ceiling-wall junctions. Timber shrinkage. Door and window alignment. These are common as the building settles and materials reach equilibrium with their environment. Most are cosmetic, but you still need to attend to them.
Months 3 to 6: weathertightness
The first significant rain events after handover reveal any weathertightness failures. Flashings around windows, roof-to-wall junctions, deck waterproofing, and penetrations are the typical failure points. These need to be treated seriously. Weathertightness failures compound quickly and BRANZ research consistently identifies them as the highest-value defect category in NZ residential construction.
Months 6 to 12: mechanical and services
HVAC systems, plumbing, and drainage faults that were not evident at handover. Extractor fan failures. Hot water system issues. Anything that works fine when new but reveals a problem under sustained use.
Month 11 to 12: end-of-DLP rush
Clients and their advisors often do a walk-through inspection near the end of the DLP and submit a list. Expect a batch of notifications in the final 30 to 60 days. If you have been proactive through the year, most of these will be minor. If you have not, this is where the backlog hits you.
Months 11 and 23: when you should do your own check
The smartest thing you can do during a DLP is beat the client to the walk-through.
At month 11 (or month 23 on a 24-month DLP), visit the site yourself or send a trusted supervisor. Walk the building with the same critical eye you would if someone else built it. Check the flashings, the wet areas, the plasterboard joints, the doors and windows. Write down everything you find. Fix it before the client's month-12 inspection.
This approach does three things. It reduces the volume of defect notifications you receive right before the DLP end. It demonstrates to the client that you take post-completion service seriously. And it ensures that you are fixing things under your own control, rather than scrambling under time pressure with a list from the client's inspector.
A proactive month-11 check will cost you half a day. Missing it often costs far more in client relationship damage and rushed remedial work.
At month 12, attend the final defects inspection with the client or engineer. Agree what is complete, what is outstanding, and when the outstanding items will be done. Get that in writing. The DLP does not formally close until the defects completion certificate (or equivalent) is issued.
Retention release: when do you actually get paid?
Retention is the money the client holds back under your contract as security against defects. The Construction Contracts Act 2002, as amended in 2015, requires retention money held under commercial construction contracts to be held on trust. The client cannot use it as working capital.
Retention is typically released in two tranches. Half at practical completion and half at the end of the DLP. That second tranche is what you are waiting on through the DLP year.
The trigger for releasing the second tranche of retention is the completion of the DLP and the clearance of all notified defects. In practice, this means the engineer or contract administrator must issue a certificate (sometimes called a Defects Completion Certificate or Final Completion Certificate) confirming that all defects have been remedied to their satisfaction. Until that certificate is issued, the retention is not released.
If you have outstanding defects that you are disputing, the client is entitled to hold the retention for those items. The path to getting your money is clearing the defects. For more detail on how the CCA retention regime works, see our article on NZS 3910 retention release.
Every unresolved defect at the end of the DLP is a dollar of retention held back. Clear the defects list and you unlock the payment.
What happens if a defect appears after the DLP ends?
The end of your contractual DLP does not end all of your legal liability. This is the part builders often underestimate.
Under section 396 of the Building Act 2004, residential building work carries implied warranties that cannot be contracted out of. These include a warranty that the work will be done with reasonable care and skill, that materials will be reasonable and fit for purpose, that the work will comply with the Building Code, and that the completed building will be fit for its intended purpose. Structural defects carry a 10-year implied warranty. Weather-tightness also carries a 10-year period.
This means that a serious structural or weathertightness failure found at year 3 can still be a claim against you, even though your 12-month DLP ended two years ago. The implied warranties are there specifically to protect homeowners from being left without a remedy when significant defects emerge after the contractual DLP.
For commercial contracts, implied terms under general contract law and the Consumer Guarantees Act (where it applies) may also provide remedies beyond the DLP. If you receive a claim for defects after your DLP has ended, get legal advice before responding.
Builder's DLP calendar: month-by-month action list
Use this as your working reference for every job with a DLP. Adapt the month numbers if your DLP is 24 months rather than 12.
- Confirm practical completion date in writing. This is Day 1 of your DLP.
- Record which retention amount is held and confirm it is held on trust under the CCA 2002.
- Set a calendar reminder for your month-11 proactive check.
- Confirm your defect notification process with the client: who contacts you, how, and to what number.
- Confirm your response timeframes with the client (standard is 10 working days for non-urgent defects).
- Review any defect notifications received. Attend and fix promptly. Do not let a list build.
- If no notifications received, a brief courtesy check-in call to the client is good practice and can surface minor issues before they become major ones.
- Confirm all subcontractor DLP back-to-back provisions are active and the subcontractors know their obligations.
- Check your defect records: every notification received, attended, and signed off should be in your file.
- Any open (unresolved) defect items: set a date to clear them. Do not let them carry past month 9.
- For residential jobs: check weathertightness. Request access if you have any concerns from the initial install or from early defect reports. Better to find it at month 6 than have it reported at month 11.
- Do your own walk-through inspection. Visit the site before the client's month-12 inspection.
- Check flashings, wet areas, door and window alignment, plasterboard joints, mechanical systems.
- Write down everything you find. Fix it before month 12.
- Clear any remaining open defect items from earlier in the year.
- Notify any subcontractors of defects attributable to their work. They need to attend and fix before the DLP ends.
- Prepare your defects register: a full list of all items notified, attended, and completed through the DLP year.
- Attend the end-of-DLP inspection with the client or engineer/contract administrator.
- Bring your defects register. Walk through it with them.
- Agree what is complete, what (if anything) remains outstanding, and the date for outstanding items to be done.
- Request the Defects Completion Certificate (or equivalent) in writing once all items are cleared.
- Once the certificate is issued, formally request release of the final retention tranche under the CCA 2002.
(24-month DLP only)
- Same as month 11: do your own walk-through before the client does theirs.
- Check for any deterioration, ongoing weathertightness issues, or mechanical faults that have developed over two years.
- Clear your subcontractor obligations: anything attributed to subs needs to be fixed in month 23, not left to month 24 scrambling.
(24-month DLP only)
- Attend the final inspection. Same process as month 12 above.
- Agree a complete defects list. Get the certificate. Request retention release.
- Note: Building Act implied warranties still apply after DLP end on residential work.
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Book a free 30-min chatFrequently asked questions
Is the defects liability period the same as a warranty?
No. The DLP is a contractual obligation to return and fix defects that appear after practical completion. A warranty is a legally implied or expressly stated guarantee about quality. Under section 396 of the Building Act 2004, residential construction carries implied warranties that run for up to 10 years for structural and weathertightness defects. These sit on top of your contractual DLP, not instead of it. The DLP sets the window in which the other party notifies you and you return to fix things. The implied warranties set the broader timeframe for legal liability, which survives the DLP.
Who pays for defect repairs during the DLP?
If the defect is caused by your workmanship or materials, you pay. If it is caused by the owner's use of the building, fair wear and tear, or a design fault that is not your responsibility, the cost sits with the owner or designer. In practice this is where disputes start. Keep records of what you fixed and what you refused, and why. A brief written note at the time of every defect visit is far better than trying to reconstruct events 18 months later.
What if the owner or client won't let me in to fix the defect?
Put your offer to fix in writing. If access is denied and the owner later tries to charge you for a third party doing the work instead, you have grounds to dispute that cost. Under most NZ construction contracts you have the right to remedy defects yourself before anyone else is brought in. If the owner has locked you out without reasonable cause, their claim for the cost of others fixing it may not hold. Document everything.
Does the DLP apply to work done by my subcontractors?
Yes. As the head contractor, you are responsible to the principal or client for the full scope of work, including work done by subcontractors. If a sub's work generates a defect notice during your DLP, you need to fix it. Whether you recover the cost from the subcontractor depends on what your subcontract says. Many standard subcontracts include a back-to-back DLP clause. If yours does not, that gap is a risk you carry. Check your subcontracts before practical completion, not after.
What is the longest DLP for residential work in NZ?
For contractual DLP, 12 months is the standard for residential contracts including NZS 3902 and the Master Builders Residential Building Contract. However, the Building Act 2004 section 396 implied warranties extend your legal liability for structural defects and weathertightness to 10 years. These are not contractual DLP periods, but they mean your exposure for significant defects runs much longer than 12 months. Your DLP ending does not end that exposure.