If you have just bought your first house, or are preparing yourself to enter the housing market, or looking to renovate your current home, you will come across the term Home Owners Warranty Insurance a fair bit. Whether it be in conversation or on your checklist of things to do, it will be one of the more frequent things you’ll be thinking about.
Home Owner Warranty Insurance is in place to protect you (the home owner) from incompetent builders or suppliers. It can also be referred to as builders’ warranty insurance, domestic warranty insurance, housing insurance and home indemnity insurance.
It covers the home owner against the following;
– Non completion of the building contract
- Failure of the build to correct faults, which are deemed by law to be the builder’s responsibility, for a nominated warranty period. (These contingencies could include poor workmanship, faulty design and inadequate/unsuitable materials.)
In Victoria, any building work that is over the amount of $16,000 requires Home Warranty Insurance, and the insurance covers up to $300,000, and covers you for six years after the completion of structural work, or two years for non-structural work.
Despite all good intentions (those being to give the home owner back their money should they lodge a legitimate claim) in most states a claim of this type is often seen as a last resort.
However, what is often misunderstood is how it applies. The biggest misconception is that you can call on the builder if a door handle falls off or if the roof starts leaking – just like you would with any other warranty. This is totally incorrect.
You can only claim if the builder goes broke or insolvent, disappears or dies. Your first port of call is to ask the builder to repair it. If the builder will not repair their poor craftsmanship or compensate you, your option is to take the matter to the VCAT. This can be a costly and lengthy process.
Luckily for Victorians there seems to be some movement on this front. Any insurance contract signed after the 1st of July 2015 lets the homeowners access insurance if the builder fails to repair their poor work after a court order has been handed down. But, as mentioned above, this can take some time to obtain.
Despite these positive signs from the state government there is still only one foolproof way of ensuring you are safe when investing money into improving your home.
It might sound simple, but doing your due diligence when hiring a builder is the best form of defence against a hypothetical home owner issue.
To do this, you have to do your homework.
Is the builder registered? If not, he won’t have insurance.
Can you find any reviews online?
How many reviews are available?
Are they positive?
If you have the builder’s name you can check registration via the Victorian Building Authority.
So there you have it. There’s more to owning a house than just living in it. If you’d like anymore help in regard to Home Owner Warranty Insurance, if you have any more questions in regard to property co-ownership or property co-ownership disputes, contact us at Wollerman Shacklock via firstname.lastname@example.org or give us a call on 9707 1155.