This article is for general information purposes only and reflects the state of information at the time of publication. It is not legal or financial advice. Always seek professional advice tailored to your specific circumstances before making decisions.
Building defects can be painful and often lead to 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 cover the cost of rectifying any defective work that is included 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 six years must obtain a certificate of insurance for the work.
The scheme also extends to work performed without a contract, such as by owner-builders.
How Much
Currently, the fund policy will pay a maximum of $340,000 for accepted claims, all of which are 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 to conduct extensive searches and inquiries when purchasing a recently built home. At Bliss Conveyancing, we protect our clients’ interests by ensuring that our team has the most up-to-date knowledge and access to the best resources available.
