If you are looking at building a home, a bach, or installing a sleepout you will have come across builders offering pre-built buildings that are trucked to your property fully or mostly finished. These can be small cabins, container homes or tiny homes that remain technically “transportable”. As the technology has developed, many builders also offer larger, more traditional, and high-end homes that are constructed in modular pieces then assembled on site.
There are a number of benefits and risks in any new product or process. On the positive side, pre-built buildings are often built in a factory environment, meaning a high degree of dimensional accuracy. While some people love the challenges of building a new home over a period of months, others prefer the simplicity of a “turnkey” solution. One day the land is bare, the next your house or cabin arrives fully completed. A covered factory in a centralised location can take unpredictable weather and materials delivery out of the equation, meaning fewer construction delays. If the builder is reputable and established, they will likely be happy to work with you to ensure you have design input and handle the Council consenting processes. With a factory workplace, the builders themselves get the benefit of not having to use port-a-loos every day.
The risks with this type of construction arise because most of the construction (and the cost) is complete before the building is taken to your site. With traditional on-site construction, once any part of the building is attached to the land it automatically becomes part of that land. That means you legally own it and it can’t be taken away if the builder gets into financial trouble. It also means that a bank can lodge a mortgage security over the land to protect any money lent on the construction. With off-site construction, the contract becomes more important as it will set out when you “own” the building. It should ensure that the building and any materials you pay for are secured or legally yours as they come together in the factory.
While some banks will be satisfied with special security arrangements, others may be reluctant to lend on a pre-built building before it is attached to your land. However, there are a range of bridging finance options if a pre-built option seems right for you.
Any new or emerging industry is seen as a frontier which, by its nature, attracts some cowboys. If a building seems too cheap, the builder doesn’t have good (or any) online reviews, or if their contract is one page tacked to the back of their first invoice you may want to do more due diligence. As with any construction, the key is in the contract. The best way to avoid risks (for old construction methods or new) is to take legal advice on the draft contract before you sign it
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Our thanks to Simon Davies-Colley for writing this article which was first published in the Mahurangi Matters in February 2025. Simon Davies-Colley is a Director and construction law and dispute resolution specialist at WRMK Lawyers.
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