If you’re thinking of renovating your house, it’s important to understand the insurance requirements and in particular Home Owners Warranty Insurance. Home Owners Warranty Insurance is required where the cost of residential building work exceeds $20,000. The insurance covers you (the home owner) and any future owners of the property for defective residential building works for a period of 6 years.
What type of renovations are considered “residential building work?”
- the construction of a “dwelling”;
- the making of alterations or additions to a “dwelling;”
- the repairing, renovation, decoration or protective treatment of a “dwelling”; or
- co-ordinating or supervising the kind of work set out above.
The definition of “dwelling” is so broad that it encompasses not only houses but also swimming pools, spas, garages, carports, decks, verandas, cabanas, workshops, driveways, retaining walls, fences and gates. People are often surprised to hear that something as simple as repairing a swimming pool, pouring concrete for a new driveway, or putting up new fences can constitute residential building work and could potentially be subject to insurance requirements.
There are, however, some exclusions, including:
- internal painting work;
- demolition work;
- work involved in the installation of a material that forms an upper layer or wearing surface of a floor that does not involve any structural changes to the floor, including vinyl or carpet but not including floor tiles.
If you decide to sell your home, and have completed residential building work at that property within the prior 6 years, you will need to provide a copy of the Home Owners Warranty Insurance to the new owner as part of the sale.
The implications are slightly different for owner-builders and developers, in next week’s article we will look at what you need to know as an owner-builder.
If you have any questions about your obligations relating to Home Owner Warranty Insurance, give our awesome property team a call on 1800 650 656. We’re here to help!
Aaron Strickland | Solicitor