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Queensland Home Warranty Scheme Product Disclosure—English (PDF)
Building or renovating your home is a significant investment, and ensuring it is protected is crucial.
The Queensland Home Warranty Insurance Scheme is designed to safeguard homeowners from potential financial loss due to building defects or contractor failure. Understanding home warranty insurance is vital for both homeowners and builders. By knowing what is and is not covered, you can protect your investment and avoid potential disputes.
The Queensland Home Warranty Insurance Scheme is a safety net for homeowners. It is a compulsory insurance policy that covers you if your builder or contractor fails to complete the work or if the building has structural defects. This insurance is funded by premiums paid by licensed contractors on behalf of the consumer.
Most residential building work valued over $3,300 (including materials, labour and GST) requires home warranty insurance. This includes new homes, extensions, renovations, and repairs. However, it is essential to note that not all building work is covered. For instance, work on buildings with more than three storeys (excluding carpark levels) is not covered.
Your builder is responsible for taking out home warranty insurance on your behalf. They must include the cost of insurance in their quote to you. Failing to do so can result in significant penalties.
Cover for structural defects generally lasts for 6years and 6months from the date of contract. For non-structural work, it is typically around 6 months from the completion of work. It is important to note that these are general timeframes, and specific circumstances may vary.
To avoid confusion and unnecessary premiums, it is crucial to understand what work does not require home warranty insurance.
Key areas of work that DO NOT require home warranty insurance are:
If you are unsure about whether your project requires insurance, consult the QBCC's detailed A to Z guide of insurable work.
Cost plus contracts can be complex and often lead to misunderstandings about home warranty insurance. The Queensland Building and Construction Commission (QBCC) strongly recommends avoiding these contracts to protect both homeowners and licensees. Learn more about cost plus and construction management contracts.
If your licenced contractor will not or cannot finish the work you contracted them to do, or if they do not fix defects, you may be eligible for a claim under the Queensland Home Warranty Scheme.
You may be able to make a claim if you own a home with an active home warranty insurance policy. The policy is attached to the property, so remains active for a specific time period even if the property is sold. This means you don't have to be the person who originally contracted the building work to make a claim.
Learn more about eligibility requirements and the Queensland Home Warranty Scheme.
The QBCC has developed a series of helpful videos which delve further into home warranty insurance for homeowners. Key topics covered include:
You can also download our home warranty insurance fact sheet or read more on What is Home Warranty Insurance.
The Queensland Home Warranty Scheme is a not-for-profit statutory insurance scheme funded through premium payments and administered by the QBCC to cover homeowners for loss suffered if their contractor fails to complete contracted works or rectify defects.
The QBCC administers the scheme according to the terms and conditions set by state government legislation.
Most residential building work in Queensland valued at more than $3,300 (including materials, labour and GST) must have cover under the Queensland Home Warranty Scheme taken out.
It’s important to note the Queensland Home Warranty Scheme does not cover all building and construction work.
For example, building work carried out in or for a structure of more than three storeys (not counting one storey if it comprises mainly a carpark) is not considered residential construction work under the relevant legislation, and therefore is not insurable under the scheme.
Under the Queensland Home Warranty Scheme licensed contractors must collect the premium from the consumer (homeowner) and pay the premium on behalf of the consumer to the QBCC for residential construction work they undertake.
If the project will cost more than $3,300 (including labour, materials and GST), the home warranty insurance premium must be included in the contract price and collected as part of the deposit. Contractors must collect and pay the premium within 10 business days of entering into a contract or face significant penalties.
For structural defects work, home warranty insurance generally covers the property for 6 years and 6 months from date of contract and remains in place even if the property is sold. Where the build takes more than 6 months to complete this increases to 7 years from date of contract.
For non-structural defects such as cosmetic issues, cover generally lasts for 6 months from completion of the works, and any claim must be made within 7 months from completion.
There are also additional timeframes that apply for claims under the Queensland Home Warranty Scheme. You must make a claim within certain time limits.
Structural defects are covered:
Non-structural defects are covered if you:
All residential construction work valued at more than $3,300 (labour, materials and GST) must have home warranty insurance.
This premium for cover must be built into the contract price if you are:
any residential building, which includes a:
The QBCC has a detailed A to Z guide of insurable work to help make it easier for licensees to understand what is and is not covered. You can find this document and other information on the Queensland Home Warranty Scheme on the QBCC website.
To avoid confusion and unnecessary premiums, it's crucial to understand what work doesn't require home warranty insurance.
Key areas of work that DO NOT require home warranty insurance are:
Cost plus contracts can complicate home warranty insurance matters. While they can be used for residential building work, they often lead to uncertainties regarding final project costs and insurance coverage.
This type of contract limits the protection offered under the Queensland Home Warranty Scheme and can lead to an increased chance of a dispute occurring. The QBCC recommends avoiding cost plus contracts to mitigate these risks.
Further information about cost plus contracts can be found on the QBCC website.
Learn about the non-completion building approval process.
When a claim for assistance to complete residential construction work under the Queensland Home Warranty Scheme (QHWS) is approved, progress of the claim is often restricted by missing certificates that relate to the built work finished before the termination of the original contract, such as:
We have no power to assist with acquiring certificates for the building work carried out before the termination of your contract with the original contractor. Assistance for the cost of these certificates is expressly excluded from the QHWS terms of cover.
Note:
While the QBCC can settle claims in a variety of ways, it is our position that the most appropriate way to settle claims is to pay an appropriately licensed contractor to complete or rectify the building work. The contractor is appointed by the QBCC following a tender process managed by the QBCC’s external building consultant. The appointed contractor that completes the work is responsible for providing certification for any building work carried out as part of the QHWS claim only.
If your circumstances indicate your claim may be suitable to be settled in another way, your claims officer will discuss the options with you and provide you with written details of the proposal.
To avoid unnecessary delays to the progress of your claim you should contact the building certifier who provided the building approval to advise you about the building approval process and how to engage their services directly.
When requesting a quote from the building certifier to re-engage their services request an itemised quote separating:
By seeking an itemised quote from the building certifier, you may be entitled to claim for the cost of building approval for the new work, subject to the terms of your original contract and the QHWS.
If you are unable to re-engage with the private certifier who issued the building approval, you should contact your local council for assistance with the appointment of a private certifier.
The QBCC recognises that a person’s home is likely to be their biggest asset, so it is reassuring to know that the nation-leading Queensland Home Warranty Scheme (QHWS) may help to protect owners if things go wrong.
QBCC Commissioner Anissa Levy says Queensland is the only state to offer first resort home warranty consumer protection cover.
“Customers can face many challenges when a construction company collapses and there are contracts and incomplete projects they need to navigate,” Ms Levy says.
“One of the reasons the QHWS is in place, is to help protect homeowners when something like this happens.
“Last financial year, the QBCC approved claims totalling $36 million under the QHWS.
“This money helps thousands of Queenslanders who have been left with unfinished projects, or if a builder has failed to rectify defective works, or if their building has been affected by subsidence or settlement,” Ms Levy says.
The QHWS extends coverage for incomplete residential construction work where the homeowner has paid a deposit, but work has not started. In these circumstances, the scheme may refund the deposit to the homeowner.
Where work has started the QHWS may cover completion of the work up to a maximum of $200,000. The level of assistance the scheme can provide will be assessed on a case-by-case basis.
There are certain eligibility requirements for a non-completion claim. The contract must be validly terminated within two years of work commencing on site, and the claim must be made within three months of the termination. Homeowners are encouraged to seek legal advice about their contractual rights and obligations. Commissioner Levy is also reminding homeowners that claims can take time.
“Every claim is unique and approval times for claims will vary, depending on a range of factors. Simpler claims can be processed quickly (for example, deposit refunds where no work has started). However, more complex non-completion claims require careful consideration and may therefore take longer to assess.
“In all other states in Australia, a consumer has to wait until the builder is deceased, insolvent or is otherwise non-contactable, before a homeowner can make a claim, or exhaust all other options via a court process,” Ms Levy says.
For residential construction projects, the QHWS provides claims coverage of up to $200,000 for incomplete work, and up to $200,000 for defective work or subsidence-related issues post completion.
The work is covered for a period of 6 years 6 months. Further information about the Queensland Home Warranty Scheme is available on the QBCC website.
Oracle Building Corporation Pty Ltd
Queensland homeowners who have a contract with Oracle Building Corporation Pty Ltd Homes and have paid a deposit can make a claim under the Queensland Home Warranty Scheme.
With the consent of the appointed liquidators, the QBCC cancelled Oracle’s QBCC licence on Friday, 26 August 2022. This will save homeowners time and money because all contracts between Queensland homeowners and Oracle are ‘at and end’.
Consequently, it is not necessary for homeowners to terminate their contract with Oracle prior to making a claim under the QHWS.
There are time limits that apply to coverage under the QHWS. Affected consumers have until Monday, 28 November 2022 to lodge a claim for refund of deposit or for completion of their home.
Non-completion claims lodged after this date will not be eligible for assistance.
The QBCC has come to the rescue for a Brisbane family after their home improvement dreams looked like going down the drain.
The Jennings family approached the QBCC for help after problems arose with the renovations at their home in northwest Brisbane.
QBCC Commissioner, Anissa Levy says the regulator stepped in to get the renovation back on track for the Arana Hills family thanks to the Queensland Home Warranty Scheme (QHWS).
“It's always good to hear from one of our many satisfied customers. In this instance we had a family of five living in a home with several defects including unusable bathrooms,” Ms Levy said.
“Thanks to the QHWS, the QBCC, our partners Sedgwick Building Consultants and the rectification builders this family now have their renovations completed including three working bathrooms.”
Ms Jennings said she was thrilled to have their family home back in working order.
“It’s a welcome relief to have the work completed and we are very satisfied with the excellent job by the rectification builder and the QBCC kept us informed the whole way,” Ms Jennings said.
Commissioner Levy says Queensland is the only State to offer first resort home warranty consumer protection cover.
“Being a first resort limited scheme, the QBCC is the first port of call for consumers. If QBCC cannot resolve the issue, and the contractor is at fault, a claim is paid provided the statutory requirements are met.
“This process means that consumers are not required to take expensive and lengthy legal action against builders".
“Instead, the QBCC pays a claim within the limits of the scheme, and, wherever possible, takes recovery action against any person or company that is determined to be responsible for the debt.
“In all other states, the consumer has to wait until the builder is deceased, insolvent or is otherwise non-contactable, before a homeowner can make a claim, or exhaust all other options via a court process.”
Further information about the Queensland Home Warranty Scheme is available on the QBCC website.
BACKGROUND
For residential construction projects, the QHWS provides claims coverage of up to $200,000 for incomplete work, defective work or subsidence-related issues post completion.
The work is covered for a period of 6 years 6 months from when the contract is signed by the homeowner and the primary contractor.
In 2021-22, 150,171 Queensland Home Warranty Scheme polices were written. Of those contracts 119,682 (80 per cent) were for renovations and 30,489 (20 per cent) were for new construction.
The building and construction industry is one of Queensland’s most important sectors.
The Queensland Building and Construction Commission (QBCC) supports Queenslanders by: