Owner Builders And Home Warranty Insurance - Nsw

Owner Builders And Home Warranty Insurance - NswBy Frank Egan - LAC LawyersWe are often approached by people who have decided to build their own home as owner builders rather than retain a licensed builder. There is a common misconception that not only will the house be cheaper but owner builders do not bear the same responsibilities with respect to home warranty insurance as licensed builders. As advised in previous articles, licensed builders bear a mandatory obligation to take out home warranty insurance if the value of the contract exceeds $12,000. This insurance protects against the death, disappearance or insolvency of the builder. It does not protect against defects. Where defects cover was previously available it allowed the nominated insurer to compensate the home owner for defects yet they were entitled to recover their losses from the builder/responsible party. Owner/builders are not necessarily required to carry home warranty insurance during the course of building their own home or when they are living in it, but when they seek to sell the property they are required to obtain a certificate of home warranty insurance. There are a number of brokers and insurers that offer this cover. Where problems arise the buyer can rely upon this insurance for protection. Irrespective many owner builders believe that home warranty insurance is all-encompassing including defects which it is not. There are a number of owner builders including tradespersons who take the view that provided council has inspected the dwelling during the course of construction they don't bear any liability for defects but council does. This could not be further from the truth as Council has attended as an inspectorial authority to ensure that what is being built accords with what has been approved. It is not there to ensure that the building is without defects or to protect both the owner builder or any subsequent buyer from problems associated with the death, disappearance or

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