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Balfour Homes - 4 Common Questions about Home Warranties in Home Construction

4 Common Questions about Home Warranties in Construction

The Housing Industry Association puts the number of new homes being built this year at over 200,000. Even if the pandemic has laid out a few hitches in construction, Australia’s real estate industry is as strong as ever. Plenty of people have chosen to continue building their dream homes, even despite COVID-19.

One of the concerns that many homeowners and builders have is handling the home warranties that come with a new home. Much like the warranties for new appliances and electronics, construction warranties are designed to protect new homeowners and give them some assurance that what has been built for them is built to last.

Homeowner warranties can be a complicated part of building a new home, but we have created this guide to answer whatever questions you might have about these warranties. Here are some of the most frequently asked questions about these warranties:

1. Is it required?

The rules and names of the various regulations may vary from state to state. It is even quite possible that there are different names for similar policies. Generally, however, they are required for projects worth a certain value. Some of these policies are as follows:

  • Work valued over $3,300 needs to be protected under Home Warranty Insurance in QLD.
  • For work valued over $12,000, the Residential Building Warranty Insurance (in the ACT) and Building Indemnity Insurance (in SA) are legal requirements.
  • For work valued over $20,000 in NSW, VIC, and WA, policies exist to protect homeowners. These are the Home Building Compensation Fund, Domestic Building Insurance, and Home Indemnity Insurance, respectively.
  • In TAS, Residential Building Warranty Insurance is not a requirement and is entirely voluntary.


2. Are they transferable?

The warranties, which last ten years, are transferable to anyone else who owns that home within that time frame. This is applicable to any warranty anywhere in Australia.


3. What is owed to me in the contract and warranty?

As per the Domestic Building Contracts Act, builders and tradesmen are required to fulfill the following obligations:

  • Ensure the use of good-quality materials that are new (unless noted and agreed upon in a contract);
  • Ensure that the newly built home is livable when finished;
  • Build the house in the proper ways as stipulated in the contract and design plans;
  • Perform the work with a good level of skill, care, and awareness;
  • To complete the project by the date specified in the contract;
  • To complete the project in full compliance with all the pertinent regulations;
  • And to fulfil all the requirements stipulated in the contract agreed upon by all signing parties.


4. What other things are required?

On top of all of these requirements, builders and tradespeople are required to have domestic building insurance on any work worth over $16,000. This insurance is meant to give the homeowner or client limited cover, protecting them if the builder can’t complete the project or fix any issues due to becoming insolvent, dying, or disappearance.


Need help with your new home and home warranties?

Generally, warranties all function the same way, but home-building warranties have a few more complex requirements, depending on where you live. It is nevertheless important to understand these complexities to protect yourself if something goes wrong with your newly built home.

If you’re looking for someone to help build your new home in Australia, send us a message at Balfour Homes. We compare builders, designs, and land — so you don’t have to.