Mandatory home warranty insurance is a key feature of the regulation of home building in NSW and in all other Australian jurisdictions except Tasmania. In essence, the Home Warranty Insurance Scheme is intended to provide a safety net for homeowners.
The Home Building Act 1989 (NSW) (herein the “HBA”) regulates the home building industry in NSW. It operates through a licensing regime of rules of conduct, minimum standards and dispute resolution mechanisms and establishes a statutory warranties scheme and the home warranty insurance scheme, which protects homeowners where a builder dies, disappears, becomes insolvent or fails to comply with a compensation order made by a court or NSW Civil and Administrative Tribunal (herein “NCAT”).
The home warranty insurance scheme sits at the end of a comprehensive consumer protection regime for homeowners undertaking residential building projects in NSW where the contract price exceeds $20,000.
Where a builder is unable to honour their commitments under a contract due to insolvency, death or disappearance, home warranty insurance provides a safety net for homeowners including subsequent purchasers. Similarly, where a builder is unwilling to honour such commitments and their licence is suspended for failing to comply with a monetary (compensation) order in favour of the homeowner made by a Court or NCAT, home warranty insurance provides protection to the homeowner.
Although responses to the 2012 Issues Paper affirmed public support for maintaining mandatory home warranty insurance, many stakeholders were of the view that more could be done to increase the efficiency of the scheme.
If you require assistance with a building and construction legal matter, please contact us by telephone on (02) 9233 4048 or send an email to info@navado.com.au to make an appointment to see one of our Building and Construction Solicitors.
This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.
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