QBCC Home Warranty Insurance Claims – part 3

Part 5 of the Queensland Building and Construction Commission Act 1991 (Act) establishes a statutory insurance scheme, the purpose of which is in certain situations to provide basic assistance to consumers of residential construction work for loss associated with work that is defective or incomplete.

As part of the building process, the builder pays a premium to the Queensland Building and Construction Commission (QBCC) to insure the residential construction work, the amount of the premium being included as part of the contract price and paid to the QBCC before the residential construction work commences.  However, many consumers of residential construction work are uncertain about the exclusions under the QBCC Home Warranty Insurance scheme.

What is the basic requirement to be covered by the QBCC Home Warranty Insurance scheme?

Earlier articles by Dundas Lawyers have discussed what is and isn’t covered under the QBCC Home Warranty Insurance scheme and what needs to be done to obtain coverage.  Generally there must be a written contract for residential construction work, the contract must bear the licence number of a QBCC licensed contractor.

In some limited situations, a consumer may be covered even if the contractor isn’t licensed or hasn’t paid the insurance premium.  However, prevention is better than cure.  Consumers should minimise their risk and protect themselves by always:

• asking for the contractor’s QBCC licence number;
• checking the currency of the licence with the QBCC website at https://www.onlineservices.qbcc.qld.gov.au/OnlineLicenceSearch/VisualElements/SearchBSALicenseeContent.aspx;
• ensuring they receive from the QBCC a Home Insurance Warranty insurance notice of cover; and
• having a completed written contract signed and dated by all the parties.

What kind of coverage exemptions are there under the QBCC Home Warranty Insurance scheme?

It may come as a surprise that there are many examples of domestic building work excluded from coverage under the QBCC Home Warranty Insurance scheme.  For example, the following types of works are excluded from coverage, even though they are usually associated with the construction of a residence or are otherwise domestic building work:

• construction of driveways and paths;
• erection of fences;
• works performed by an owner – builder;
• defective designs prepared by a builder;
• works where the value performed exceeds the contract price by more than 30%;
• surfacing outside the coping of a pool; and
• other work associated with pools such as paving, slides or diving boards.

In respect of claims for non-completion, cost plus contracts and construction management contracts are not covered, though defects under such contracts that become evident during construction or post-completion will be covered.

A claim for defective work will usually be refused if the consumer unreasonably refuses to allow the licensed contractor who carried out the work to attend on site to remedy the defects in circumstances where the contract remains on foot.

Significantly, structural defects are covered only for six years and six months from the date of payment of the premium and a claim for such structural defects will be exempt if the claim is not lodged within three (3) months of the defect being noticed.  Claims for non-structural defects will be exempt if the consumer becomes aware, or reasonably ought to have become aware of the defect, within six (6) months after the day the work is completed but does not lodged a claim within seven months of the completion date.

The outline above is by no means exhaustive of the coverage exemptions under the QBCC Home Warranty Insurance scheme.

Takeaways

The terms and conditions of the QBCC Home Warranty Insurance scheme are complex.  Like all insurance policies, consumers need to know what they are and aren’t covered for.

Links and further references

Legislation

Queensland Building and Construction Commission Act 1991 (Qld)

Related insights

Top ways to avoid a building dispute in Queensland

Implications of non-compliance with the Queensland Building and Construction Commission Act (Qld) 1991

Termination for incomplete construction work

QBCC Home Warranty Insurance – part 1

QBCC Home Warranty Insurance – part 2

Further information

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.