WA building regulator offers warning on warranty insurance

28 February 2022

WA’s building regulator is urging home building clients not to pay deposits without seeing evidence that the builder has a home indemnity insurance (HII) policy in place for their project. 

The advice from Building and Energy applies to residential building work valued over $20,000. Under the Home Building Contracts Act, builders must take out HII in the owner’s name and provide them with a copy of the policy before accepting payments or starting work. 

“HII is an important safeguard for home owners because it protects against financial loss for incomplete, faulty or unsatisfactory work in the event that the builder dies, disappears or becomes insolvent,” Building and Energy Executive Director Saj Abdoolakhan said. 

Saj adds that in most cases, the insurance policy must cover the building work during construction and for six years after practical completion.

“While most industry members are doing the right thing, we have become aware of some cases where the builder may have accepted money for home building projects that are not covered by HII.  

“We are monitoring this closely and I also urge consumers to do their due diligence before paying a deposit.” 

Consumers can source HII information from their builder or QBE, which is the main HII provider in WA, via wa.homeindemnity@qbe.com or 1300 790 723.  

A fact sheet on HII is available at the Building and Energy website.  

Preparation of plans agreements (PPAs) – which involve a builder’s initial site assessments and planning before a contract is signed – are not covered by the Home Building Contracts Act or HII. PPA-related costs are often not refundable if a building contract does not progress.  

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