Dealing with Defects? Don’t Delay!

Posted on November 15th, 2016

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Katie Thompson is a Solicitor at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation.

Your guide to home warranty insurance time limits.

The Home Building Act 1989 (The Act) requires builders and tradespeople to be licensed for the work that they do, and to have insurance and proper contracts in place for most jobs. Most residential building works must have home warranty insurance. Home warranty insurance provides insurance cover in respect of loss only if a claim is made to the insurer during the period of insurance. The period of cover depends on the type of loss that occurs. 

For non-completion of work, the Act requires insurance cover for a period of a least 12 months after the failure to commence, or cessation of the work. This means that the insurer must be notified within 12 months for a claim based on non-completion.

Where a ‘major’ defect has occurred, a claim must be notified to the insurer within 6 years of the defect becoming apparent.

A major defect is a defect in a major element of a building that is attributable to defective design, defective or faulty workmanship, defective materials, or a failure to comply with the structural performance requirements of the National Construction Code and that causes, or is likely to cause the inability to inhabit or use the building (or part of the building) for its intended purpose, the destruction of the building or any part of the building, or a threat of collapse of the building or any part of the building.

A major element of a building includes internal or external load bearing components of a building that is essential to the stability of the building such as fire safety systems, waterproofing, footings, floors, walls, roofs, columns and beams.

For other defects, which are not major defects, the insurer must be notified within 2 years of the defect becoming apparent.

In order to be compensated for your loss, you should ensure that you properly notify your insurer by giving notice in writing of the loss and provide all of the information that is reasonably necessary to put the insurer on notice as to the nature and circumstances of the loss.

 

Katie ThompsonKatie Thompson is a Solicitor at Mullane & Lindsay Solicitors and practises in the Commercial dispute resolution and litigation team. If you require any assistance in this area please contact Katie Thompson to arrange a consultation or contact our Newcastle or Sydney office. 

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