New rules aimed at weeding out cowboy builders do not go far enough, Consumer New Zealand chief executive Sue Chetwin says.
Under regulations that came into force yesterday, builders working on jobs worth more than $30,000 must give customers written contracts, a list of their skills and experience, and details of warranties and insurance.
Those flouting the rules face an instant fine of $500.
Ms Chetwin said the changes gave a lot more protection to people having building work done but did not address the costly disputes process, which often had to go through court.
Areas such as electricity and banking all had more efficient industry-based resolution services, she said.
"Building just doesn't seem to have that and it's one of the areas that the mistakes you make can be expensive ones, so it would be useful to have a better industry-based disputes resolution service."
Consumer New Zealand would be pushing to have the disputes process changed, Ms Chetwin said.
Certified Builders' Association spokesperson Grant Florence said he believed the changes would lift the bar for the whole industry.
"The landscape has been littered with issues where builders haven't done the right thing and that's led to some incidents with homeowners that haven't done the industry too well."
The leaky-home saga had also lowered public confidence in the building industry, Mr Florence said.
Homeowners' and Buyers' Association president John Gray said the regulations were a start but still left people in the lurch if they hired a building company that went under.
"It is really disappointing to see that the government hasn't taken on the advice of both the Homeowners' and Buyers' Association and other industry players who suggested there should be a mandatory insurance-backed warranty that survives the collapse of a building company."
Mr Gray said contracts should be mandatory for all jobs, not just those costing more than $30,000, and that the new rules should have included a mandatory insurance-backed warranty capable of standing up even if a company collapsed.
The $500 fine was low but would still have an impact, he said.
"It seems a very paltry sum but it will be a black mark against the builders and over time questions would have to be raised as to whether or not they actually should continue to hold a licence to be in trade if they continue to breach."
Master Builders' Association chief executive David Kelly said the new rules were already standard practice for many in the industry, because they protected everyone involved.
"A lot of people have not had written contracts for what is their biggest asset, their most important asset, and there are certainly documented cases of people getting into trouble because of that."
Mr Kelly said a booming building sector could also mean more shoddy work.