Home Warranty Insurance for Owner Builders and related issues

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Protect your home by investing in Home Warranty Insurance

Owner Builder Home Warranty Insurance when SELLING (NSW VIC WA) obligations

Successive Purchasers of Owner Builder properties

OB Home Owner Warranty Insurance when SELLING- Defects Inspection + Insurance Quote Request

Owner Builder Home Warranty Insurance Obligations, when SELLING

In NSW, Victoria and WA, when selling an owner built home, home with a renovation or swimming pools, usually within six years of the Practical Completion Certificate being issued but the precise compliance details vary in each State (see below) , Owner Builder Home Warranty Insurance is required to protect the first and subsequent buyers, should the original Owner Builder not be contactable. To obtain Home Warranty Insurance, a Defects Inspection and Report are required, which must be carried out by an approved Inspector. The Defects Report is usually valid for six months. If defects are originally found, it is prudent to have them addressed, and then organise a follow-up inspection so that your property can be presented to the market ‘defects-free’. If defects are not addressed, the Home Warranty Insurance excludes those defects. Additionally, prospective purchasers and their solicitor will see those defects itemised.

For Owner Builders planning to sell their project in NSW, Victoria and WA, we provide a complete and fast service to organise and co-ordinate quotations for the Defects Report and Owner Builder Home Warranty Insurance. See below for further details, or if you wish to proceed, click the link to fill out the Online Defects Report Form or download the PDF form Owner Builder Home Warranty + Defects Report Insurance Quote Form and send it to us for a quotation.

To arrange your needs or to ask any questions, call us on 1300 884 876 or +61 2 8303 0545 Monday to Friday 9am to 5pm (AEST).

In NSW

In New South Wales, under Section 95 (2) of the Home Building Act 1989, it is illegal for Owner Builders to enter into a contract for the sale of their properties, unless more than 6 years has passed since the date of the building or major renovation on the property was completed, as defined by the Completion Certificate- S 95 (3), without attaching a valid Home Warranty Certificate to the contract.

The Contract for Sale of the land must also include disclosure of the fact that an Owner Builder Permit was issued in relation to the work and that the work done under the Permit requires Home Warranty Insurance to be tken out.

If there is a non-disclosure of the Owner Builder status of the sale, and Home Warranty Insurance is not arranged, not only can the purchaser rescind the Contract for Sale of the land before Settlement, but an Owner Builder may also face penalties.

If the Home Warranty Insurance Certificate is not attached, but the Owner Builder had arranged the insurance before entering into the Sale Contract, the Contract is not voidable by the Purchaser. However, an Owner Builder must provide the Home Warranty Insurance Certificate to the Purchaser prior to Settlement.

In VIC

In Victoria, in accordance with Section 137B of the Building Act 1993 (Victoria), Owner Builder work undertaken more than 6 ½ years from Practical Completion, does not require insurance, but the sale of an Owner Builder built property less than 6 ½ years from the date of Final Inspection or Occupancy certificate, does require Home Owner Warranty Insurance.

The following Statutory Warranties must be part of every Contract Of Sale of property built by an Owner Builder, where Home Owner Warranty applies (see above):-

the Owner Builder Vendor warrants that all domestic building work carried out in relation to the construction by, on behalf of the vendor of the home was carried out in a proper and workmanlike manner, and

the Owner Builder Vendor warrants that all materials used in the domestic construction were good and suitable for the purposes for which they were used and that, unless otherwise stated in the Contract, those materials were new, and

the Owner Builder Vendor warrants that all domestic building work was carried out in accordance with all laws and legal requirements, including, but without limiting the generality of the warranty, the Building ACT 1993 and the regulations.

If you do not obtain a Defects Report and Warranty Insurance organised before your Contract with the Purchaser is signed, or before a deposit is taken, the Contract is voidable at the option of the Purchaser at any time before the completion and settlement of the Contract. Additionally, you can be fined up to $10,000. Not having insurance still leaves you liable to fix all defects, plus you leave yourself open to have legal action taken against you seeking compensation.

Be aware that Legislation and/or policies hold the Owner Builder liable for breaches of the Statutory Warranties (see above where they apply). If the insurer receives a claim. the Owner Bulder will be contacted. where possible, and be given the opportunity to fix such problems. If the Owner Builder does not fix the problems within a stipulated time, the insurer will have to meet its obligations and arrange for the appropriate repairs. The cost of the repairs will become a debt payable by the Owner Builder. The insurer will then persue the Owner Builder for recovery of the money is paid to carry out such repairs.

We can assist you in obtaining the Defects Report and Owner Builder Home Warranty Insurance, click the link to fill out the Online Defects Report Form or download the PDF form Owner Builder Home Warranty + Defects Report Insurance Quote Form and send it to us for a quotation. Simply call us on 1300 884 876 or +61 2 8303 0545 Monday to Friday 9am to 5pm (AEST).

In WA

In Western Australia, in accordance with the Builders Registration Act 1993, Owner Builder Warranty Insurance is compulsory at the time of selling for all residential building works carried out by an Owner Builder in excess of $12,000. The insurance is to be taken out by the Owner Builder who undertook the building work in favour of the home purchaser (beneficiary) of the property and also coversany subsequent owners of the property during the statutory warranty period for up to 7 years from the date at which the Owner Builder was issued with a Building Licence for the work, or for up to 6 years later Practical Completion was issued. Applicable legislation includes the Builders Regulation Act 1993, Home Building Contracts Act 1991, Health Act and the Building Code of Australia (the latter of which is available through us). Owner Builders in Western Australia are regulated by the Builder's Registration Board.

As an Owner Builder, you are guaranteeing the work you undertook. If you decide to sell within the 6 year period after Practical Completion is certified, it is advisable that you organise appropriate Warranty Insurance well in advance of marketing your property.

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Successive Purchasers of Owner Builder properties

Owner Builder Home Warranty Insurance is designed to cover successive purchasers of the property from any building problems or defects, which may arise within the first 6 years from the Owner Built Project Completion Date.

This protects the purchaser from situations where it would become impossible for the purchaser to make a claim against a tradesman or contractor for any building defects or faults. Again, the reasons include a tradesman or a contractor going out of business, becoming bankrupt or deceased, or from any other limitations arising out of the 'doctrine if privity of contract' (this dictates that only persons who are parties to a Contract are entitled to take action to enforce it).

It is important to note that this type of Home Warranty Insurance will only cover a successive purchaser, for the balance of the 6 year period, from the date of completion of the Owner Building Project. So for this instance, if an Owner Builder completed the building work on the 1st March 2002, and has sold the property to a purchaser on the 1st March 2006, then the purchaser would only be covered until 1st March 2008- the balance of the 6 year period, which is 2 years.

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Owner Builder Home Owner Warranty Insurance (when SELLING) + Defects Report. Explanation, Service + Enquiry Form

We provide a prompt and complete service that organises and co-ordinates the complying requirements of the Defects Report and associated Owner Builder Warranty Insurance. We point out that if the first Defects Inspection is not successful, depending on the amount of remedial work required, a follow up inspection is recommended can be taken to the market ‘defects-free’. Such a follow-up inspections by the same inspector are usually at the rate of $120.00 per hour. If substantial corrective work is required, another full Defects Inspection and Report will be required.

A Defects Report is usually valid for six months. Defects Inspections and Reports can only be carried out by approved consultants, who must also carry Professional Indemnity Insurance.

If you are planning to sell your owner builder built home, do not leave organising this vital and legal requirement to the last moment, as it does require some time to provide Owner Builder Warranty Insurance and the mandatory Defects Report.

For Owner Builders selling in NSW, Victoria and WA, to enable us to assist you to organise and co-ordinate your Owner Builders Warranty Insurance and Defects Report needs, click the link to fill out the Online Defects Report Form or download the PDF form Owner Builder Home Warranty + Defects Report Insurance Quote Form and send it to us for a quotation.

To arrange your needs or to ask any questions, call us on 1300 884 876 or +61 2 8303 0545 Monday to Friday 9am to 5pm (AEST).

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