The NSW Government is working to improve the sustainability of the home warranty insurance (HWI) scheme ensuring it continues to meet the needs of homeowners and the building industry in NSW.
Minister for Fair Trading Matthew Mason-Cox today announced that the Government will initiate a review of the scheme to keep it on a sustainable footing and ensure it provides adequate protection for homeowners while minimising costs for builders.
“Home warranty insurance is a key consumer protection in the residential building sector. It is the safety net that provides cover for consumers in the event that a builder dies, disappears or becomes insolvent.
“The review will consider a range of matters to ensure the sustainability of the scheme,” he said.
Home warranty insurance is mandatory in NSW for residential building work valued at more than $20,000, unless exempt.
The NSW Government currently underwrites the scheme which is funded by premiums and established under the Home Building Act 1989.
The review will build upon recent changes to the Home Building Act. This includes clarifying what constitutes minor and major defects thereby reducing conflict between builders and customers; tougher penalties including prison sentences for repeat offences and the removal of HWI for owner builders.
Mr Mason-Cox said it was important the scheme continued to meet the needs of the community and the building industry.
“I will set up a stakeholder working group to assist in developing options for the Government to consider,” he said.
“Refinements to the scheme will be progressed as part of a package of reforms relating to multiple occupancy of buildings, security of payments and community title in the first half of 2015,” Mr Mason-Cox concluded.