What building laws (if any) apply to boatbuilders?
Logic would suggest that boat building ought to be regulated just as stringently as the construction of homes, apartment buildings, office towers, bridges, tunnels and dams. But is that true? Are boat builders as strictly policed as builders are, or do they in fact get a free rein?
The Building Act
Since the leaky building era, the Building Act has required builders who do important residential work to be licensed, it has established the Building Practitioners Board (the “BPB”) to discipline them, and it has given to homeowners a lot of special rights and remedies against all residential builders (not just licensed ones). In a residential building project costing $30,000 or more, there are four mandatory documents that builders have to give to their customers, including a written building contract. And those customers can enforce a lot of implied warranties against them, as well as insist that any defects emerging within 12 months are rectified immediately.
Are boatbuilders covered?
There are some grey areas of course. There have been a few reported cases where people have built what is effectively a house, but in the style of a boat, and have argued that they should be exempt from the Building Act requirements. Whether they succeed depends upon whether the boat is (or will be once completed) capable of being launched without substantial modification.
However in general, the building code, the building consent regime, the licensing requirements, and the consumer rights and remedies don’t apply to boat building. You don’t have to meet any prescribed standards, you are not scrutinised by an independent regulator, you don’t have to have any special qualifications, and your customers don’t have any special rights and remedies against you.
The Construction Contracts Act
What about the other statute, the Construction Contracts Act 2002 (the “CCA”)? This is the one that is designed to free up cash flow within the industry. It does that by prohibiting certain unfair clauses in building contracts, by establishing a payment claim/payment schedule system that forces parties at the top of the pecking order to either pay up or explain themselves, and by creating a quick and dirty method for resolving building disputes promptly and economically. Recently, rules have been introduced requiring payment retentions to be held in trust or otherwise secured for the benefit of the intended recipients.
Does the CCA apply to boat builders? That depends on whether you are doing “construction work” as defined by the CCA. “Construction work” is much more comprehensively defined in the CCA than “building work” is under the Building Act, but the crucial point is that the structure being built must form, or be intended to form, part of land. And that would appear to exclude boat building, even though there is no explicit exclusion for boats as there is in the Building Act.
That means you don’t have to ensure your contracts are CCA-compliant, you are not subject to the payment claim/payment schedule system, you can’t use CCA adjudication to resolve disputes, and your payment retentions don’t have to be held in trust.
The Consumer Guarantees Act
So what does that leave? Only the law of contract, the law of negligence, and the Consumer Guarantees Act 1993 (the “CGA”). What the CGA does is insert some basic rights and remedies into every contract for the supply of consumer goods or services, and those override anything that the written contract might say to the contrary. The CGA
only applies if you are supplying goods or services to “consumers”, and consumers are individuals, companies, councils, clubs or other legal entities who acquire goods or services “of a kind that are ordinarily acquired for personal, domestic, or household use or consumption”. So unless the boat you are building is a commercial fishing vessel, a tugboat, a destroyer or an oil tanker, then the CGA is the one statute that you can be held accountable under.
by Geoff Hardy
Auckland Commercial Lawyer
Geoff Hardy has 45 years’ experience as a commercial lawyer and is a partner in the Auckland firm Martelli McKegg. He guarantees personal attention to new clients at competitive rates His phone number is (09) 379 0700, fax (09) 309 4112, and e-mail firstname.lastname@example.org This article is not intended to be relied upon as legal advice.