Better protections for NSW home owners whose builder goes bust
A review into how to better protect residents looking to build their own homes has kicked off in NSW.
The Home Building Compensation Fund (HBCF) aims to prevent families from being left in the lurch if their builder goes bust – also enabling owners to make a claim where a contractor has died, disappears, or in some scenarios, has a suspended builder’s licence.
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Calling the HBCF “critical” to the health of the entire building industry, the NSW state government concedes important elements are over a decade old, with the fund’s maximum coverage set at $340,000.
That ignores the fact that building costs have climbed 60 per cent over the period.
Stressing that an adjustment to the coverage amount will strengthen the fund’s effectiveness and support housing supply, the aim is to ensure protections keep pace with rising costs.
Jihad Dib, the state Minister for Customer Service and Digital Government, revealed Bronwyn Weir had been appointed to undertake the review, with “the right skills and experience to deliver practical recommendations to protect families building and renovating homes in NSW”.
Tasked with providing advice to the government, she will be taking a look at the high rates of insolvency within the sector, consumer awareness, builder compliance, appropriate help for consumers who are unlawfully insured, whether the existing insurance coverage is adequate, and whether the scheme is operating effectively.
Over the last five years alone, more than 1,000 penalty infringement notices have been issued, with 188 builders prosecuted for failing to hold the correct insurance.
“I am looking for grounded, pragmatic suggestions about how government and industry can, together, improve the operation of the Home Building Compensation scheme,” Minister Dib stated.
According to the CEO of the State Insurance Regulatory Authority (SIRA), Mandy Young, the review “marks a significant step forward for families investing in their homes in NSW, ensuring the fund remains a robust safeguard”.
“We’re eager to see the findings lead to real improvements for those facing building insolvency and other issues, maintaining our commitment to keeping things fair and reliable,” she remarked.
Minister for Building, Anoulack Chanthivong, said it represents “another opportunity to lift standards in the sector and deliver more homes that are higher quality for people in NSW”.
“Last year, we set up Building Commission NSW and gave it the power it needs to stop bad building work in its tracks. Now, we’re getting on with action to give mum and dad builders and renovators confidence that they are protected if the worst should happen,” he said.