SIRA commences review of the Home Building Compensation Fund
14 August 2024
SIRA has commenced a review of the Home Building Compensation Fund (HBCF) to identify better protections for people building and renovating their homes, fulfilling an election commitment from the NSW Government.
The HBCF provides insurance coverage for homeowners facing incomplete or defective building work by licensed contractors on residential projects. Homeowners may claim if the contractor has become insolvent, died, disappeared or had their license suspended for ignoring an order to compensate the homeowner.
While the fund is critical to the health of the home building and renovation industry, important elements have not been updated in more than a decade meaning consumers are at risk. The fund’s insurance coverage was set more than 10 years ago at $340,000 but building costs have grown 60% over that time.
The NSW Government is concerned about compliance from building businesses. Over the past 5 years, builders have been issued more than 1,000 Penalty Infringement notices.
Respected industry leader Bronwyn Weir has been appointed to undertake the review and is tasked with providing advice to the Government on issues including:
- assessing high rates of insolvencies in the building industry
- consumer awareness and builder compliance
- appropriate help for consumers who are unlawfully insured
- whether the existing insurance cover amount is adequate, and
- whether the scheme is operating effectively.
Chief Executive of SIRA Mandy Young has stated “this review marks a significant step forward for families investing in their homes in NSW, ensuring the fund remains a robust safeguard. We’re eager to see the findings lead to real improvements for those facing building insolvency and other issues, maintaining our commitment to keeping things fair and reliable.”