The home warranty insurance register
By Scott Chambers and Katherine Flynn
Home warranty insurance register
Changes to the Home Building Act 1989 (“HBA”) implemented on 15 January 2015 introduced a register of home warranty insurance contracts (now called “Insurance under the Home Building Compensation Fund”) entered into by the NSW Self Insurance Corporation (“SICorp”) from 1 July 2010. The register does not include contracts of insurance entered into prior to 1 July 2010. If such insurance exists then it will have been issued by a private insurer and conventional searches for evidence of insurance, such as directly through the relevant developer, contractor, council, certifier or insurer may be required to confirm the existence and details of that insurance.
The register is able to be accessed through the Home Building Compensation Fund website, which is located at the following URL: https://www.hbcf.nsw.gov.au.
Benefits of the register
The register enables users to search the register either with a certificate number or property address. The results identify whether a policy of home warranty insurance has been issued in respect of residential building work at a given property address.
If a certificate exists, a user can view the property address, certificate number, issue date, builder name, builder license number and details of any claim made. These details can be useful in assisting to ascertain a number of important details, including:
1. Whether insurance exists in respect of residential building work at all.
Whilst this may seem an obvious feature of such a register it should not be taken for granted. There are numerous scenarios where insurance might be thought to exist despite never having been obtained, including where contractors or developers forge certificates of insurance, or more commonly where parties incorrectly rely on “certificates of eligibility” rather than certificates of insurance, or simply fail to follow through on promises to obtain the insurance.
2. The applicable policy of insurance.
SICorp has to date issued 3 different policies of insurance since 1 July 2010. By identifying the date of the certificate of insurance it is possible to easily determine the applicable policy of insurance. All issued policies can currently be obtained through the following URL: https://www.hbcf.nsw.gov.au/portal/server.pt/community/homeowners/351/insurance_policies.
3. The details of any contractor for whose work insurance was issued.
Because there are cases where the contractor whose details appear on an insurance certificate has been found not to be the contractor that contracted for or did the work – resulting in the work being uninsured – owners and prospective purchasers should ensure that they take steps to confirm that the person who did the work is also the person whose work was insured. However information on who in fact did or contracted to do building work is not recorded on the register, and is often not readily available. Searches of other available information should be undertaken, including information from the developer, the contractor, the council, certifier or the insurer.
4. The date of commencement and completion of the relevant work.
Whilst this information is not readily available from the certificate itself, the date of the issuance of the certificate can be used to make some informed assumptions in regards to the relevant construction time frame, particularly once one takes into consideration the nature and extent of the work that was done. Because of the strict dates for notifying loss under home warranty insurance policies, this may provide critical information for owners and prospective purchasers in ascertaining when the relevant limitation periods expire for commencing legal proceedings or notifying loss under a policy of insurance. This aspect of the certificate register may prove to be less of a concern for owners corporations and lot owners in strata schemes (as opposed to owners of single dwellings) taking into consideration the recent addition of section 3C to the HBA, which deems the date of completion of a building in strata scheme for the purpose of the HBA to be the date of an occupation certificate that authorises the use or occupation of the building.
5. The amount of money previously paid out on a contract of insurance.
Contracts of insurance entered into by the SICorp up to 31 January 2012 were required to have a minimum level of cover of $300,000. From that date onwards the minimum level of cover was raised to $340,000. If a claim has previously been accepted and money has been paid out under a contract of insurance then the remaining insurance coverage for the insured work will be the applicable minimum level of cover less the amount paid out on the policy of insurance. This information is critical to owners and prospective purchasers knowing how much insurance cover, if any, remains under the relevant contract of insurance.
Owners and prospective purchasers now have a powerful tool in the register that can assist them in defining a number of important features about residential building work that they respectively own or may purchase. Checking the register is a prudent first step for owners and prospective purchasers protecting themselves against the risk that work is uninsured or a contract of insurance has already been claimed upon. The register may also provide useful information about the contractor that did the work.
As a final word of warning, users of the register should keep in mind that the process of entering (or not entering) details into the register may be subject to human error. As a result, it is our view that details in the register (or conclusions reached based on information contained in the register) should be verified where possible to ensure their accuracy.
The information provided in publications of Chambers Russell Lawyers is commentary and general information. This information is not legal advice and should not be relied upon as such. It is our recommendation that formal legal advice be obtained that is specifically relevant to your matter.