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Tasmania set to insure home owners against builder insolvencies

19 FEB 2022 By Juliet Helmke 2 min read Finance

The Tasmanian government is developing a new scheme to provide a safety net for property owners who are building a home.

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Following the collapse of two building companies in Tasmania that left approximately 50 property owners with incomplete construction projects, the Tasmanian government has announced its intention to implement a home warranty insurance scheme.

The program, currently in development, seeks to provide financial security in instances where a builder disappears, becomes insolvent, or dies.

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An assistance package is currently being rolled out to help property owners already impacted by builder insolvencies. It’s modelled off the current projection for what the insurance scheme will look like once it’s implemented.

It allows for:

 
 
  • Property owners with an incomplete building project to claim up to 20 per cent of the contract price, up to a maximum of $200,000.
  • Property owners who have paid deposits but where work is yet to commence to claim up to 5 per cent of their contract price. This is in line with the statutory protections that already exist to prevent deposits beyond 5 per cent.

This assistance is available to anyone affected by the death, disappearance or insolvency of a builder since 1 July 2021.

Elise Archer, the state’s Minister for Workplace Safety and Consumer Affairs, said the government was pursuing these plans because it recognised that “buying or building a home is the biggest investment many people will make”.

She said she expected the full scheme to be implemented later this year and noted it would be administered by the Department of Justice’s Consumer, Building and Occupational Services (CBOS).





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