Do You Need a 10-Year Building Guarantee? Understanding Halo and Your Protection
Updated: Sep 9
If your builder is already responsible for their work, you might reasonably wonder: why would I pay extra for a 10-year building guarantee?
In New Zealand, homeowners already have legal protections. Implied warranties under the Building Act apply automatically to residential building work for up to 10 years, regardless of whether you have a written contract. These cover areas such as Building Code compliance, workmanship, suitable materials and completing the work within the agreed or a reasonable timeframe.
A separate residential building guarantee doesn't replace those rights.
What it can provide is another layer of protection if something covered goes wrong and your builder can't or won't put it right.
For projects completed by members of New Zealand Certified Builders (NZCB), one option available to homeowners is the Halo 10-Year Residential Guarantee.
If My Builder Is Already Responsible for Their Work, Why Would I Need Halo?
This is probably the most important distinction to understand.
Your builder remains responsible for their obligations whether or not you purchase Halo. Building legislation also provides homeowners with protections that exist independently of a residential building guarantee.
But ten years is a long time.
A building company could close, become insolvent or simply be unable or unwilling to resolve a future defect.
Halo provides an additional party behind certain covered workmanship, materials and structural defects. Under the current claims process, you generally approach your builder first and give them the opportunity to remedy the problem. If they refuse or don't make reasonable progress, a claim may then be made to Halo, subject to the guarantee's terms and timeframes.
Your legal rights establish obligations. A residential building guarantee can provide an additional avenue of financial protection if the builder can't or won't meet certain covered obligations.
What Is the Halo 10-Year Residential Guarantee?
Halo is a residential building guarantee available exclusively through approved New Zealand Certified Builders (NZCB).
Halo Guarantees Limited is 100% owned by NZCB but is governed by its own independent Board of Directors and manages its own applications, claims and financial administration.
The standard post-completion Halo Guarantee provides two main periods of cover.
✓ Years 1–2: Workmanship and Materials
For the first two years, Halo can cover qualifying defects in workmanship and materials that don't meet the New Zealand Building Code or relevant accepted standards.
This can include poor workmanship outside accepted tolerances or materials that aren't fit for purpose.
✓ Years 3–10: Structural Defects
For the remaining eight years, the focus moves to qualifying structural defects.
This can include serious problems involving:
Foundations and footings
Load-bearing walls and framing
Beams and columns
Floor systems
Roof structures
Structural elements of some decks
Qualifying weathertightness defects that cause damage to the home
Conditions and exclusions apply, particularly to weathertightness cover.
What Happens If My Builder Can't or Won't Fix a Defect?
Halo doesn't normally replace your builder as the first point of contact.
If you discover something you believe may be a covered workmanship, materials or structural defect, you must first notify your builder in writing and give them an opportunity to put it right.
If the builder refuses or hasn't made reasonable progress within Halo's specified timeframe, you can approach Halo to begin the claims process. Halo also requires potential claims to be notified within specified time limits, so homeowners should not leave suspected defects unresolved.
This is where the additional guarantee becomes relevant: there is another process available if the original builder cannot or will not resolve a qualifying problem.
What If the Builder Becomes Insolvent During Construction?
This is one of the significant changes to Halo introduced in 2026.
From 1 May 2026, homeowners applying for Halo can choose optional Pre-Practical Completion Cover, providing additional protection before the standard post-completion guarantee begins.
There are two components.
✓ Loss of Deposit Cover
If you've paid a deposit and the builder becomes insolvent before substantial building work begins, this optional cover may protect the deposit.
✓ Non-Completion Cover
If substantial construction has started but the builder becomes insolvent before practical completion, this optional cover may contribute towards the additional cost of having an eligible replacement builder complete the project.
These covers are not automatically included with the standard Halo Guarantee. They must be selected when applying for Halo and accepted before work begins, and eligibility conditions and exclusions apply.
When Does the 10-Year Guarantee Start?
The standard Halo post-completion protection begins at Practical Completion, rather than when the building contract is originally signed.
That means the homeowner receives the full post-completion guarantee period rather than using part of the ten years while construction is underway.
If optional Pre-Practical Completion Cover has been selected, that provides the relevant protection during the earlier construction period.
I would make the following into a horizontal timeline:
BEFORE CONSTRUCTION - Optional Loss of Deposit Cover
DURING CONSTRUCTION - Optional Non-Completion Cover
YEARS 1–2 AFTER COMPLETION - Workmanship and materials cover
YEARS 3–10 - Structural defect cover
Does Halo Cover Everything That Goes Wrong With a Home?
No.
A 10-year building guarantee should never be treated as blanket insurance against every future problem.
Halo has specific terms, limits and exclusions. For example, exclusions can apply to landscaping, fencing, driveways, certain retaining walls, external drainage systems, normal wear and tear, maintenance issues, some design or engineering errors, external events and work outside the builder's contractual responsibility.
That's why homeowners should read the current Halo Homeowner Handbook and guarantee terms rather than relying solely on a summary of the cover.
What Happens If You Need to Leave Your Home During Repairs?
For a valid covered claim requiring you to leave the property while repairs are completed, Halo can also provide cover for certain associated costs.
These can include:
Temporary accommodation
Moving and storage
Professional fees such as engineers or architects
Some site protection, demolition or debris-removal costs
Current additional-cost cover is capped at $30,000 per claim, subject to the guarantee terms.
Can Halo Be Transferred If You Sell Your Home?
Yes.
The remaining Halo Guarantee can be transferred to a future homeowner, providing continuous protection for the remainder of the original guarantee period. Halo states there is no additional guarantee cost to the new owner, although an administration fee may apply to process the transfer.
That can also provide useful documentation and additional reassurance when selling a home that has undergone substantial building work.
How Much Does the Halo Guarantee Cost?
Halo uses tiered pricing based on the value of the building project.
Optional Pre-Practical Completion Cover may affect the overall cost.
Is a 10-Year Building Guarantee Compulsory?
For most residential building projects, taking out a product such as Halo is a choice, rather than something that replaces the protections homeowners already have under New Zealand law.
Whether the additional cover is worthwhile for you will depend on the project, its value, the level of risk you're comfortable carrying and the additional protection you want.
They work alongside one another rather than being the same thing.
Halo and Alder Homes
Alder Homes is a member of New Zealand Certified Builders, which means eligible Alder Homes clients have the option to apply for the Halo 10-Year Residential Guarantee.
We don't believe homeowners should simply be told they need additional cover.
Instead, we believe you should understand what protection you already have, what Halo adds, what it costs and what its limitations are so you can decide whether the additional protection is worthwhile for your project.
If you're considering a substantial renovation, extension or new build, building guarantees are one of the things worth discussing before the building contract is finalised and construction begins.
For the most current cover, eligibility, pricing, terms and exclusions, refer directly to the Halo 10-Year Residential Guarantee.
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