Builders Warranty Insurance is compulsory for new Victorian homes and major renovations (with some exemptions).
I think it is important to understand what is and isn’t covered by the insurance.
The insurance provides protection to the owner (and subsequent owners) if the builder dies, disappears or becomes insolvent. This can be useful where the builder, for example, becomes insolvent during the build or if a serious defect emerges after completion and the builder cannot be located.
However, it doesn’t really help a home owner deal with a builder who simply refuses to complete the build in a timely manner or doesn’t return to remedy defects. It also expires after 7 years – so an owner has no claim against a builder for defective work after 7 years.
Evidence of builders warranty must be provided to a purchaser (as part of the section 32 statement) if the property is sold within 7 years of completion of the works. If the works were undertaken by an owner builder, special owner builder insurance must be included.
Evidence of insurance must be provided by a builder before commencing work – and a Certificate of Insurance is usually provided when the builder completes the building work and makes their final claim. This is important paperwork and should be stored somewhere safe for future reference.
As an alternative, Lewis O’Brien & Associates is happy to scan and retain copies of this paperwork so that you know where to find it when you need it!