I have been discussing with my commercial lawyer and we spoke briefly RE: my intention to purchase a new residential property. I am looking at Duplexes within the Sydney Metro and I'd like to know if there are any exceptions to the 7 years Building Warranty for newly established buildings? (For example, if the property was an owner-builder property and the owner has lived in it, is he exempt from having to have builder's warranty for himself? Are there are clauses of scenarios where a new or as-new (say 18 months old) building can be sold without building warranty? Keen to get thoughts/feedback.
Only unit blocks over 3 storeys are exempt from HOW insurance. OB are required to effect HOWI if they are selling and only for the balance of the warranty period.
Thanks for your response. Any thoughts RE: Preferences for Company Builders vs Sole Trader owner builders? Anything to watch out for? Is HOWI provided by the Licence Holder or the business entity that erected the building?
Check the regulations in your state but if the builder refuses or goes into liquidation then the insurance can still be used. Note the 7years is not on everything so it would behoove you to read up on it and find out what it does cover
HOWI is provided by an insurer not by the builder or developer but is paid for by them. Generally, avoid owner builders as you don't know what quality they have built or their experience. Read up on the fair trading website.
Thanks Scott. Your feedback is appreciated. Would you consider OB if they have a decent track record? Or is it typically better to just look for a company. In this scenario, the OB lives next door.
@pinot - If the OB has a track record, then they shouldn't be building and flipping properties, they should be licensed and carry on the business of a builder. Therein lies the issue - they are only permitted to build one house every 5 years and it is their PPOR.
