Security requested by icare hbcf
The Home Building Act 1989 provides that a person who is the immediate successor in title to a developer of a residential building project is entitled to the benefit of the statutory warranties under the Act as if the developer were required to hold a contractor licence and had done work under a contract with that successor in title to do the work.
Accordingly, where a proposed multi dwelling development has a contract value over $750,000 a developer must also demonstrate their financial capacity and if unable to do so may be required to provide suitable security. Further information on the circumstances where a developer may be required to provide a security are contained in the Underwriting Guidelines.
Bank guarantees will not be sought by icare hbcf as a condition for providing cover for a specific project, though a builder or developer can provide a bank guarantee if they choose.
Developers with securities held by other insurers
Securities provided by builders and developers to other insurers are unable to be transferred to icare hbcf. Securities that builders and developers provided to RBUA, QBE and/or Vero prior to 1 July 2010 while they were providing cover under the Privatised Scheme will remain in place until they are released by the insurers, independently.
Important information to Developers providing security
icare hbcf strongly recommends that persons intending to provide a security (including a Deed of Indemnity) for a builder or developer obtain appropriate legal and financial advice prior to submitting the deed. The terms of the Deed of Indemnity (or other security) and the implications of providing it should be explained to and fully understood by the persons providing the security. They should also have had an opportunity to examine the financial affairs of the builder and/or developer.
References on this website to builders and building work include and apply to work undertaken by trade contractors and other building contractors such as electricians, plumbers, carpenters, swimming pool builders etc.