When Saleh Ghiyath and Leila El-Yassir signed a contract with builder KB Project Management Ltd in 2017 to build their dream home, they never thought that two-and-half years later they would be $560,000 out of pocket and yet to move in.

Since moving to New Zealand in 2000, the couple saved for years to finally build the 430-square-meter three-storey, seven-bedroom house in Auckland.

Today the house is still incomplete, the contract cancelled and the couple have hired another company to finish it.

They signed a fixed-term contract for $1.1 million with KB Project Management in May 2017. At the time the company was a member of the Registered Master Builders Association.

The house was expected to take a year to build. Things got off to a good start, Ghiyath said.

The first few months progressed well and stayed on budget. But eventually, construction began to slow down and Ghiyath said builder Ankit Budhiraja would only come to the site every couple of weeks, a claim Budhiraja denies.

In July 2018 the supplier for the cladding said it wouldn't be able to sign off the work for the warranty due to concerns about the weather-tightness of the installed cladding.

"That's when alarm bells went off," Ghiyath said.

Ghiyath and El-Yassir commissioned an independent construction report from building consultant August Millard in November.

The 19 defects noted in the report included large cracks in some of the concrete masonry, scribers for windows and doors that had been cut too long and a hole in the garage door leaving the site vulnerable to vermin.

The couple had spent $3000 for a 10-year guarantee from Master Builders and included in the contract a clause that the builder would pay them $600 a week for any delays that might occur.

In March, Master Builders commissioned its own report from building consultants Maynard Marks, which also found problems with the work.

"The Master Builder's report was more damning than my own," Ghiyath said.

In April the association paid the couple the maximum claim under its guarantee of $140,000.

KB Project Management was also de-registered as a member of the scheme, although its website still mentions its accreditation.

Master Builders chief executive David Kelly said KB Project Management's registration was cancelled following a complaint earlier this year. Its complaint committee found the firm had breached the association's code of conduct.

Budhiraja is a current director and shareholder of two registered companies, KB Project Management and KB Projects.

He said the council never stopped work on the house, and the building passed its preline inspection.

The issue with the cladding stemmed from Ghiyath's decision to change the material from cedar to a pre-fabricated aluminium, he claimed.

KB Project Management did not charge for the variation, but incurred a cost of about $18,000 to make the changes, he said.

Further, he said the project was also hit with delays due to Ghiyath replacing the design engineer and bad weather.

Budhiraja said he had responded to both reports and rectified defects and anything that was not to standard was due to a lack of "critical details" from Ghiyath.

He also said that due to poorly-detailed plans he had replaced flashings and extended a block wall at a personal cost of $14,000.

"We never ran away from the project and were working towards achieving the successful completion.

"We were always ready to remedy the defects but never got details from the architect to date to carry out the works.

"We were opposed to this cladding material as it is a new product in the market but we gave in to the pressure from client as his concern was only on how he is going to maintain cedar at such high level. He basically made unilateral changes without proper consultation," Budhiraja said.

Budhiraja said his former client threatened physical harm in a text message. Ghiyath admitted that after having his messages and calls continuously ignored after days of no activity on site, he lost his temper.

Ghiyath did not accept Budhiraja's arguments and said he had consulted with him on the cladding when he decided to change the material. Budhiraja did not dispute the decision, he said, and nor did Budhiraja repair the defects listed in the report as he claimed.

Auckland Council field surveying manager Jeff Fahrensohn said the construction had a higher incidence of non-compliance issues than was normal for a house of that design.

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