For homeowners

Before you start building

Building businesses and trades businesses (tradies) that contract with homeowners must buy home building compensation insurance for work over $20,000 (including GST) for:

• constructing new homes and new apartment buildings (up to three storeys)
• renovation of all home buildings regardless of height of the buildings.
• swimming pools

The business must include information about the home building compensation insurance in their building contract with you.

They must give you the certificate of insurance before they ask for or take any payment for the work (including a deposit), and before they start the work.

You should:

• make sure you get the certificate of insurance for the work before you hand over any money
• check that the business name shown on the certificate matches the business name on the contract for the work
• check the contractor's licence is current with Building Commission NSW
• check that the certificate is genuine by entering the certificate number in the online Home Building Compensation (HBC Check) tool, which is the public register of home building compensation insurance.

Before buying a new or renovated home

If you are buying a recently built or renovated home, you will also be covered by the insurance for the duration of the warranty period.

Check that there is a certificate of insurance included with the contract for sale and speak to your solicitor or conveyancer if you are uncertain. You can also check that the certificate is genuine and whether there have been any claims paid on the insurance by entering the certificate number in the online Home Building Compensation (HBC Check) tool, which is the public register of home building compensation insurance.

What the insurance covers

You are insured for up to $340,000 (limits apply) if the business responsible for the work on your home cannot meet its obligations.

Home building compensation insurance covers:

• incomplete work due to contract termination
• breaches of statutory warranty, meaning work that:
  • lacks due care or skill
  • does not match the plans or specifications
  • uses unsuitable materials
  • violates legal standards
  • is not completed on time or within a reasonable period
• faulty design by the building business
• costs for alternative accommodation, moving and storage
• lost deposits or progress payments
• legal or other costs for seeking compensation
• costs to rectify the loss or damage
• issues caused by the building businesses' subcontractors
• problems resulting from attempts to fix issues after the work is complete.

When you can lodge a claim

You can lodge a claim if your builder or tradesperson has:

• died
• become insolvent
• disappeared
• had their licence suspended due to non-compliance with a money order of the Tribunal or a Court in your favour.

This covers you for:

• loss of deposit and incomplete work (12 months after failing to start or stopping the work)
• defective work (6 years for major defects) and 2 years for other losses).

Other pages for homeowners and renovators