WA’s Building Commissioner is reminding owner-builders that they must obtain home indemnity insurance (HII) if they sell their home within seven years and if the building work was valued at more than $20,000.
The message follows a $1,800 fine against Great Southern owner-builder Anna Michelle Kemp, who entered a guilty plea at Albany Magistrates Court for breaching the Home Building Contracts Act 1991.
By self-managing a building project on their property, an owner-builder is responsible for any defective work for seven years from the building permit issue date. If the property is sold during this time, the Act requires the owner-builder to provide an HII policy. This insurance provides protection for the purchaser if the owner-builder does not rectify building defects due to disappearance, death or insolvency.
The court was told Ms Kemp entered into a contract to sell her property in Lowlands more than five years after the first building permit was issued, but she had not provided the purchasers with an HII policy. Although Ms Kemp had participated in an owner-builder course that covered the need for HII prior to sale, the court accepted her actions were an oversight rather than intentionally unlawful.
In imposing the fine, as well as costs of $500, Magistrate Erin O’Donnell noted the penalty should be more than the cost of purchasing HII so offenders do not benefit financially by not obtaining the insurance. Her Honour said it was “extremely unlikely” Ms Kemp would reoffend and acknowledged her remorse and favourable engagement with the purchasers on other matters.
Building Commissioner Saj Abdoolakhan said the case should remind owner-builders of their obligations.
“Owner-builder applicants must show they have sufficient knowledge of the duties involved, including completing a course that covers home indemnity insurance requirements in detail,” Mr Abdoolakhan said.
“Without this insurance, subsequent property owners can be left unprotected if the owner-builder is unavailable to rectify building defects for certain reasons.”
More information on becoming an owner-builder is available at the Building and Energy website: https://www.wa.gov.au/organisation/service-delivery/owner-builder-approval
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Media contact: BEmedia@demirs.wa.gov.au
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