WA builder left client $132k out of pocket
The builder had failed to take out mandatory insurance, leaving his client in the lurch when he went bankrupt.
Peter John Edmonds, a Mandurah-based builder, has been fined $2,000 and awarded costs of $504.30 after pleading guilty to failing to purchase Home Indemnity Insurance (HII).
In 2020 and 2021, Edmonds entered into three contracts with a Dudley Park home owner for building work, including renovations valued at over $96,000. Despite being required by law to take out HII prior to starting work, the builder did not purchase this insurance at any point.
During the course of the project, Edmonds suffered a serious injury and was unable to complete the work, and eventually became bankrupt.
Without insurance to fall back on, the client was left $132,000 out of pocket.
Saj Abdoolakhan, Western Australia’s Building Commissioner, stated that the case was a “stark reminder” of why HII is required by law.
“If the insurance was in place as it should have been, the home owner would have been protected from losses up to $200,000 following the builder’s bankruptcy,” said Abdoolakhan.
HII protects home owners who enter into building contracts from financial penalties if their builder dies, disappears, becomes insolvent, or loses their builder registration. It repays up to $40,000 for a lost deposit and up to $200,000 to address defective or incomplete work.
All residential building projects valued at over $20,000 are required to take out HII.
“As a registered building contractor at the time of the work, this builder was well aware of the HII obligations. On this occasion the court has decided to impose a fine of $2,000, which is 20 per cent of the maximum penalty available,” said Abdoolakhan.
The magistrate, Leanne Atkins, opted to fine Edmonds $2,000 due to his early guilty plea, but emphasised that his actions were “serious” and resulted in “significant financial loss” for the client.
In addition to the fine and costs, Edmonds has been ordered to repay the home owner over $132,000, which currently remains unpaid.
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