Review of the Home Building Compensation Fund Terms of Reference

The NSW Government made an election commitment to Review the Home Building Compensation Fund (HBCF) as part of its Plan for Building Reform to restore faith and confidence in the industry. The HBCF provides insurance for residential building projects in the State (the HBC Scheme).

The review is occurring in a context where the Government is seeking to support a well-functioning housing market that is accessible and affordable, consistent with the Government’s housing policies.

Terms of Reference

The reviewer will inquire into the HBC Scheme and provide a report in accordance with the following terms of reference:

1. Review the operation of the HBC Scheme in respect of the following fundamental issues and recommend the actions, if any, that are necessary or desirable to achieve the objectives of the scheme in relation to:
   1. the prevalence and nature of home building business insolvencies in NSW relevant to the HBC scheme;
   2. the adequacy of the HBC insurance cover amount and future adjustments to it and, if necessary, how to deal with the impact on premiums of future adjustments;
   3. awareness and understanding of the HBC Scheme amongst building businesses and homeowners;
   4. compliance with insurance and HBC-related requirements by building businesses and help for homeowners who are unlawfully uninsured.
2. Review the feasibility and desirability of a multi-insurer market for the HBC Scheme and, if so, recommend additional actions to facilitate this.
3. Given the Government is in the process of consolidating building-related legislation, review the draft legislation relating to the HBC and recommend the changes, if any, that are necessary or desirable at this time to promote cohesiveness with the wider legislative package.
4. The review is to be informed by past reviews addressing matters within the scope of the terms of reference.

Consultation

The reviewer will consult with the public, key stakeholders in the home building and insurance industries and within Government.

Advisory Panel

An advisory panel of suitable Government, industry and consumer representatives will be appointed by the Minister to provide advice to the Reviewer (including SIRA, NSW Treasury, icare and the Building Commission NSW).

Reporting date

The final report is to be provided to the Minister by 24 February 2025.