What does the HBCF do?

A builder is obliged by law to obtain a Certificate of Insurance (CoI) under the HBCF scheme before asking any payment under the contract for a residential construction, addition, or alteration project with a contractual value over $20,000. 
 
The HBCF provides a safety net for homeowners if their builder has been unable to honour commitments under the building contract due to insolvency, death or disappearance. The safety net is also provided where the builder’s licence has been suspended for failing to comply with a Tribunal or Court order to pay compensation to the homeowner.

What does the CoI cover you for?

This insurance gives protection to the homeowner for losses arising from defective and incomplete work where the builder or developer: becomes insolvent, dies, disappears, or has their building licence suspended due to non-compliance of a money order by Tribunal or Court. The period of cover lasts for six years from the date of job completion. 

Who is a Developer?

Under the Home Building Act 1989 an individual, partnership or corporation having residential building work done in connection with an existing or proposed dwelling in a building or residential development where four or more of the existing or proposed dwellings are or will be owned by the individual, partnership or corporation is considered to be a ‘developer’.  
 
A developer of residential building work also includes the owner of the land where the development is carried out and who owns, or will in future own, four (4) or more of the existing or proposed dwellings. 
 
The definition also provides that if another person or organisation who will also own four or more of the units in the development entered into the building contract for the work, then they are also considered to be a developer.
 
Developers are not covered by an insurance policy under the HBCF scheme, however, a purchaser of a property from a developer and their successors in title are covered by the policy.