Nine building businesses cautioned for failing to have adequate insurance
4 April 2024
Nine building businesses, that are responsible for 131 home building projects, have been cautioned by SIRA for not holding compulsory home building compensation (HBC) insurance.
The 9 building businesses identified to date failed to insure some of their customers’ deposits for home building work in NSW, putting them at risk of losing their deposit if the business had become insolvent.
These issues were identified by a SIRA compliance audit that commenced in August 2023. It relies on data-matching done in collaboration with the Building Commission NSW using planning data and icare Home Building Compensation Fund insurance records.
SIRA Acting Chief Executive Dr Petrina Casey said that the collaborative efforts have helped to protect the people of NSW.
“By identifying building businesses who do not hold HBC insurance for every job, people who invest their hard-earned money into building their family home are protected".
“Last year there were 72,422 home building and renovation projects in NSW, relying on HBC insurance to protect homeowners.” Dr Casey said.
Building businesses in NSW must buy HBC insurance for each residential building project they do over $20,000 (including GST), unless exempt.
Customers should be aware that no money should change hands, including the payment of a deposit, without HBC insurance in place for their specific building project. However, customers can still sign a building contract. SIRA will continue its HBC insurance compliance audit, with a total of 100 building businesses to be examined.
While cautions were considered appropriate in the circumstances of these 9 building businesses, SIRA will also consider issuing penalty notices, referral to the Building Commission NSW or other enforcement actions, where warranted.
The NSW Building Commissioner has met with both the Housing Industry Association (HIA) and Master Builders Association (MBA) and directed that their members need to lift compliance with building standards and HBC insurance during 2024. The Building Commission NSW has already commenced auditing Class 1 buildings following new powers provided to them in December 2023.
HBC insurance protects homeowners as a last resort if a business can’t complete work on their home or fix defects.
Consumers can check if a certificate of insurance is genuine by entering the certificate number in the ‘HBC Check‘ insurance register and confirming that the details match their project and the name of the business they contracted for the work.
Further information
Contact us by submitting a home building compensation online enquiry or call us on 13 10 50.