Consumer Guarantees Act 1993

What it is

The Consumer Guarantees Act 1993 is the New Zealand statute that gives consumers guaranteed minimum standards when they buy goods or services from a supplier in trade. It applies automatically — the guarantees cannot be contracted out of when the customer is a consumer purchasing goods or services ordinarily acquired for personal, domestic, or household use.

For real estate transactions, the CGA primarily applies through Part 4, which covers services. The relevant guarantees apply to services supplied by real estate licensees, building inspectors, valuers, conveyancers, photographers, stagers, and other service providers in the property transaction chain.

What it covers

• Goods — statutory guarantees of acceptable quality, fitness for purpose, correspondence with description, reasonable price, and similar (Part 1). Relevant for chattels and fixtures.
• Services — statutory guarantees on services supplied to consumers (Part 4): reasonable care and skill, fitness for particular purpose, completion within a reasonable time, and reasonable price where not agreed.
• Remedies — a tiered set of remedies depending on the nature of the failure: repair, replacement, refund, compensation for consequential loss.

The Act does not apply to services provided by a "qualified architect" (within the meaning of the Registered Architects Act 2005) or by a "chartered professional engineer" (within the meaning of the Chartered Professional Engineers of New Zealand Act 2002) in their professional capacity (section 41). Real estate licensees, building inspectors without formal regulation, and most other service providers in property transactions are not excluded. Services supplied to businesses (commercial transactions) fall outside the Act, but residential property transactions by individual vendors or purchasers generally fall within it.

What it gives you

• A guarantee that services are carried out with reasonable care and skill. (Section 28)
• A guarantee that services are fit for the particular purpose you made known to the supplier. (Section 29)
• A guarantee that services will be completed within a reasonable time if no time was agreed. (Section 30)
• A guarantee that the price will be reasonable if no price was agreed. (Section 31)
• Remedies when guarantees are breached — you can require the supplier to remedy the failure, refund the service, or seek compensation for consequential loss.

Key sections and how they work

Section 28 — Guarantee as to reasonable care and skill

"Subject to section 41, where services are supplied to a consumer there is a guarantee that the service will be carried out with reasonable care and skill."

Our reading: This is the single most important CGA provision for property transactions. "Reasonable care and skill" is the objective standard of competence applied to the service. A building inspection that fails to identify defects visible to a reasonably skilled inspector, or that makes definitive statements about areas the inspector could not access, falls short. A real estate agent who makes basic errors of law (misstating what the Real Estate Agents Act requires, for example) falls short. Section 28 is the civil analogue of the REA Act's Rule 5 and the common-law duty of care.

Section 29 — Guarantee as to fitness for particular purpose

If you told the supplier a specific purpose for the service, the supplier guarantees the service is fit for that purpose. In real estate contexts: if you engaged an inspector specifically to assess weathertightness in a leaky-building-era property, the inspection must be fit for that purpose.

Sections 32 and 33 — Remedies

Where a service fails a guarantee:

• You can require the supplier to remedy the failure within a reasonable time.
• If the failure cannot be remedied or the supplier refuses, you can cancel the contract and seek a refund of the amount paid, and damages for any consequential loss.
• Where the failure is "of a substantial character," you can cancel immediately without giving the supplier a chance to remedy.

"Substantial character" is defined in section 36. It includes failures that a reasonable consumer would not have acquired the service for if they had known, or failures that cause significant damage or loss.

How the Act is applied in practice

For property transactions, CGA claims typically arise in three contexts:

• Building inspection reports that fall below a reasonable standard — missing visible defects, making unsupported conclusions, or failing to comply with NZS 4306:2005 where compliance was promised.
• Real estate agent services where the licensee's conduct produces measurable harm to the vendor — for example, poor marketing that extends time on market, or negligent advice that leads to a lower sale price.
• Valuation services that fail the reasonable-care standard and cause consequential loss.

Claims are typically pursued through the Disputes Tribunal (for claims under $30,000) or the District Court. The Consumer Protection NZ service publishes self-help guidance. The Commerce Commission does not enforce the CGA — it is primarily enforced through private action.

The CGA operates alongside, not in place of, the REA Act and the Professional Conduct Rules. A vendor can pursue both a CGA claim (for civil damages) and an REA complaint (for professional discipline) from the same facts.

Common misuses

"You signed a disclaimer, so the CGA doesn't apply"

For consumer transactions, the CGA guarantees cannot be contracted out of. A disclaimer in an agency agreement or inspection contract does not displace section 28. The only exception is where the service is supplied to a business, in which case the parties can contract out under section 43 of the Act. Residential transactions by individuals do not qualify for the business-to-business exception.

"This is a professional service, so the CGA doesn't apply"

Section 41 excludes only qualified architects (Registered Architects Act 2005) and chartered professional engineers (Chartered Professional Engineers of New Zealand Act 2002) acting in their professional capacity. It does not exclude real estate licensees, building inspectors generally, valuers, or other property-transaction service providers.

"The CGA only covers small purchases"

There is no monetary cap on CGA claims. The cap is procedural (Disputes Tribunal jurisdiction up to $30,000); above that, claims proceed in the District Court or High Court. The substantive guarantee is not limited by value.

When you might cite this Act

• An inspection report is materially substandard. Section 28. Compare what the report produced against what a competent inspector following NZS 4306 would have produced.
• The agent's advice caused a quantifiable loss. Section 28 plus consequential-loss remedies.
• A service was not completed within a reasonable time. Section 30.
• The price charged was unreasonable for the service supplied. Section 31 (where no price was agreed).
• A service was sold for a particular purpose that it failed to serve. Section 29.

Related rules

• Fair Trading Act 1986 — covers misleading or deceptive conduct and false representations; enforced by Commerce Commission.
• Real Estate Agents Act 2008 — professional discipline for licensees.
• Professional Conduct and Client Care Rules 2012 — Rule 5 on skill and competence.
• NZS 4306:2005 — the standard against which inspection reports are measured.

Authoritative sources

• Full text: Consumer Guarantees Act 1993 — legislation.govt.nz
• Consumer Protection (MBIE): consumerprotection.govt.nz
• Disputes Tribunal: justice.govt.nz

Our guides that use this Act

• The building inspection report: what NZS 4306 requires
• REA complaints: the realistic outcome