Building defects can be painful and often end up in disputes and shattered property dreams. In NSW there is a backup plan for those affected by building problems.
What Is The Fund
The Home Building Compensation Fund (HBCF) in New South Wales, Australia is a government-run scheme that provides financial protection for homeowners if their home builder becomes insolvent or dies, or if the builder fails to complete the work or rectify defects. It is mandatory for all licensed builders in New South Wales to be a member of the HBCF. The fund is supported by annual levies paid by builders and is used to compensate homeowners in the event of a claim. The HBCF can also be used to cover the cost of rectifying any defective work that is covered under the home building contract.
What If I Didn’t Build The Home
A subsequent purchaser of a property can make a claim under the scheme, provided that the claim is made within the time limits set out in the legislation. The claim must be made within six years of the date of the relevant home building contract and the subsequent purchaser must provide proof that they are the owner of the property at the time the claim is made.
All sellers who have completed residential building work under a contract valued at more than $20,000 (inclusive of GST) in the prior 6 years must obtain a certificate of insurance for the work.
The scheme also extends to work performed without a contract, such as owner-builders.
Currently the fund policy will pay a maximum of $340,000 for accepted claims, which are all subject to assessment by qualified claims officers.
Of course there are occasions when this amount is not sufficient to cover the rectification of the issue, which is why it is most important that extensive searches and inquiries are made at the time of purchasing a recently built home. At Bliss Conveyancing, we protect our clients interests by ensuring that our team have the most up to date knowledge and access to the best resources available.