Are you about to buy a new home from an owner builder? Are you about to buy a home that has been built or renovations by an owner builder within the last six years? Are you paying more than $12000.00? Do you know about Home Warranty insurance?
Owner builder home warranty insurance is a compulsory insurance required by the Home Building Act 1989 and is to the benefit of you the purchaser. Basically it is illegal for an builder to enter into a sale contract without a valid certificate of your home warranty attached to the contract, unless six years has passed since the date of the building/ renovation completion.
If you are purchasing a new home from an builder it is vital they disclose this at the point of sale, as well as inform you that an Builder Permit was issued in relation to the work they did, and that warranty insurance be taken out. Legally, any builder that is issued with an owner builder permit who sells their property within six years of completion MUST, under law, take out home warranty insurance.
So why is it so important to you the purchaser?
In the event of a building problem or building defect within the six years from the date of completion your insurance will cover you for compensation due to bankruptcy, death or disappearance of the builder. The home warranty insurance policy will also extend to the costs of alternative accommodation, removal and storage costs if reasonable and necessary.
Remember, that if builder does not disclose this and insurance for your warranty home is not arranged then the purchaser can void the contract of sale prior to settlement and an owner builder can face large penalties.
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