Home building compensation

NSW builders and tradespeople (including carpenters, electricians, plumbers etc.) must take out insurance for each residential building project if the contract price is over $20,000 inclusive of GST, with some exceptions (eg tradespeople subcontracting to a builder).

A homeowner can be compensated under the Home Building Compensation Fund, if they suffer a financial loss because their builder fails to complete or fix defective work, if the builder has become insolvent, died or disappeared or has had their licence suspended due to non-compliance with a Tribunal or a Court order (but only if the policy was issued on or after 19 May 2009).

SIRA and Fair Trading regulate the Home Building Compensation Fund to ensure that everyone follows the rules. Another government authority called icare manages the insurance policies.