Home warranty insurance

Owner Builders

What is Home Warranty Insurance

Owner Builders are only required to provide warranty insurance, if and when they sell their owner built property within the warranty period for the state or territory in which they build.

Warranty for owner builders only insures subsequent owners (owner builders are not insured) against:

• Failure of the owner builder to correct faults, which are deemed by law to be the builder's responsibility, for a nominated warranty period. These contingencies are poor workmanship, faulty design, and inadequate or unsuitable materials andis only triggered by the death, disappearance or insolvency of the owner builder.

Legislation

The various wordings for Statutory Cover are based on legislation in force in each jurisdiction, namely:

New South Wales	Home Building Act 1989 Home Building Regulation 2004
Victoria	Building Act 1993
South Australia	Builders Licensing Act 1986
Western Australia	Home Building Contracts Act
Tasmania	Housing Indemnity Act 1992
Australian Capital Territory	Building Act 1972

Northern Territory Government will be introducing legislation which is designed to introduce a private warranty scheme in that region. This is expected to commence in late 2006 or early 2007.

Statutory Warranties

In essence, the statutory warranties require the builder to do the work -

• In accordance with the plans and specifications in the contract
• In a proper manner
• Using good and suitable materials
• Using new materials unless otherwise stated
• In accordance with laws
• Within the time specified in the contract
• So as to be fit to be occupied when completed and
• So as to live up to any result agreed it must achieve.

 

For more information about this policy contact HIA Insurance Services.

 

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