Home Building Insurance

Licensed builders have had to provide insurance to cover their work for faulty materials or workmanship when work involves a residential property for some time now. In May 1997 the law changed so that this insurance could be taken out with several insurance companies offering this type of insurance, previously this was done through one policy overseen by the Department of Fair Trading

As from Ist May 1997 all building work, done under a contract dated on or after this date or if no contract work commenced after this date, with a value of $12,000.00 or more must be insured by the builder, developer or owner-builder. The insurance must be for a period of seven years. Builders are required to rectify building work that is faulty or damage caused by faulty materials for a period of seven years. The insurance policy covers owners when the builder cannot be found or goes into liquidation. Buildings over three stories in height do not have to be covered by insurance.

All owner-builders or developers or builders residential property must attach to the contract for a sale of land a copy of a certificate of insurance that complies with the requirements. If these requirements are not complied with there is a fine of $11,000.00 and if the insurance certificate is not attached to the contract the purchaser may be able to withdraw from the contract.