Home Building Contracts Act 1991

In this section —

if the builder is an individual — the builder —

has died; or

after due search and enquiry, cannot be found in Australia;

if the builder is not an individual — the builder ceased to exist; or

the builder is insolvent; or

if the builder is a building service contractor under the Building Services (Registration) Act 2011 — the builder’s registration as a building service contractor was cancelled or not renewed because the builder did not satisfy the financial requirements (if any) prescribed by the regulations under section 18(1)(b) of that Act.

A policy of insurance complies with this Division if —

in the case of residential building work to be performed by a builder on behalf of another person, other than a developer, under a residential building work contract, it insures that person and that person’s successors in title against the following losses occurring because a relevant circumstance exists in relation to the builder —

loss of an amount paid by way of deposit under the residential building work contract, up to a limit of $20 000 or another prescribed limit;

loss, other than indirect, incidental or consequential loss, resulting from non‑completion of the residential building work;

in the case of residential building work to be performed by a builder on behalf of another person (whether under a residential building work contract or not), it insures that person and that person’s successors in title against the risk of being unable to take advantage of an entitlement to, or to enforce or recover under, a building remedy order under the Building Services (Complaint Resolution and Administration) Act 2011 because a relevant circumstance exists in relation to the builder; and

in the case of residential building work to be performed by a builder on the builder’s own behalf, it insures the builder’s successors in title against the risk referred to in paragraph (b); and

it provides that claims may be made under it at any time before the expiration of a period of 6 years from the day of practical completion within the meaning of that term in section 11; and

it provides for insurance cover of —

at least $100 000 or such other amount as is prescribed; or

the cost of the building work,

it is issued by or on behalf of an insurer who is —

authorised under the Insurance Act 1973 of the Commonwealth to carry on insurance business; and

approved in writing by the Minister;

it complies with any other prescribed requirements.

Subject to subsection (3), where the policy of insurance relates to work described in paragraph (b) of the definition of home building work in section 3, the cost of the residential building work for the purposes of subsection (1)(e) is only the cost of —

placing the dwelling on the land including siting, stumping and any other work in connection with that placement; and

any building work to the dwelling after placement.

Where the policy of insurance relates to the placement of a transportable dwelling on land for the first time after its construction, the cost of the residential building work for the purposes of subsection (1)(e) is the cost of —

the dwelling; and

placing the dwelling on the land including siting, stumping and any other work in connection with that placement; and

any building work to the dwelling after placement.

An insurer is not entitled to avoid liability under a policy of insurance on the ground that the policy was obtained by misrepresentation or non‑disclosure —

by the builder; or

in the case of a claim by a successor in title to the person on whose behalf the residential building work was performed, by that person.