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 6 years and 6 months 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.
You can download our home warranty insurance fact sheet or read more on What is Home Warranty Insurance.
A former Brisbane resident has become the fifth person convicted and fined this year for illegal building activities in prosecutions brought by the QBCC.
Paul Joseph Ford was convicted and fined a total of $16,000 in Beaudesert Magistrates Court on 24 April 2024 for three offences relating to unlicensed building work at a Jimboomba property in 2021.
Mr Ford was not present in court when her Honour Magistrate Tracy Mossop convicted him of unlicensed building work, not using a contract that complies with requirements, and demanding an excessive deposit from a homeowner.
The QBCC has also prosecuted another three individuals this year in cases where convictions were not recorded [details of these are in the section below].
Acting Commissioner of the QBCC, Tim Murphy, has urged homeowners to only ever use licensed contractors, regardless of the size of their building project.
He said unlicensed individuals exposed owners to illegal and potentially dangerous work, and their work might not be covered by the safety net provided by home warranty insurance.
“The Queensland Home Warranty Scheme is the most accessible scheme in Australia and protects owners if work is incomplete or defective,” Mr Murphy said.
“Owners should get more than one quote, only use a licensed contractor and a contract, and ensure they have their home warranty insurance policy in place before work starts.”
He said the money paid by owners to the unlicensed individuals prosecuted so far this year highlighted the risks in using unlicensed individuals and ranged from $3,350 to $49,000.
QBCC Prosecutions in 2024 for unlicensed building activities
On 25 January 2024, Paul Lawrence Coplick was convicted of unlawfully carrying out building work, fined $15,000 and ordered to pay compensation of $3,350 to a homeowner.
On 9 February 2024, a man pleaded guilty in the Rockhampton Magistrates Court in relation to two charges brought by the QBCC.
The man was fined a total of $6,000 for unlicensed building work and not using a contract that complies with requirements. Convictions were not recorded.
On 15 March 2024, Richard Kaddour was convicted and fined $20,000 for unlawfully carrying out building work and performing building work without a written contract.
On 5 April 2024, a man pleaded guilty in the Holland Park Magistrates Court in relation to unlicensed building work and carrying out plumbing and drainage work without an appropriate licence. The Magistrate fined the defendant a total of $8,500 and convictions were not recorded.
The QBCC prosecuted a man in the Beenleigh Magistrates Court on 12 April 2024 in relation to unlicensed building work, pretending to be a licensee, not using a contract that complies with requirements and demanding and receiving an excess deposit from a homeowner.
The defendant failed to appear and fined a total of $15,000. Convictions were not recorded.
Two separate cases were prosecuted by the QBCC on 19 April 2024.
Gurbuz Oktay and Charles Falevalu Tauvao were both charged with unlicensed building work, not using a contract that complies with requirements, and demanding excessive deposits from home owners.
Mr Oktay was also charged with pretending to be a QBCC licensee. He was convicted of all four offences and fined $25,000.
Mr Tauvao pleaded guilty to all three offences and was convicted and fined $15,000.
On 24 April 2024, Paul Joseph Ford was convicted and fined $16,000 for unlicensed building work, not using a contract that complies with requirements, and demanding excessive deposits from home owners.
If you're lodging a defective work complaint, it's important to submit photos of the building work issue so the QBCC can understand the matter.
See our top tips below for taking the best photos of your defective work:
You can also save the guide below for easy reference.
Learn more about the common causes of building work disputes, tips to help prevent disagreements from escalating, and the dispute process, including the responsibilities of both parties.
