Insolvency/deregistration of your company will have significant consequences

for builders seeking to obtain home warranty eligibility for future projects 

Historically, when a building company has experienced financially difficulty, the common practice had been to liquidate and wind up the company. This enabled a builder to wind up their company that was in debt and essentially create a new business with which they could commence trade under.  

Whilst liquidating a troubled company might have been the best solution at the time, it actually creates a myriad of issues for a builder wishing to carry out work in the future. 

It is prudent to note that liquidating a company in financial difficulty and creating a new company under which a builder could continue to operate under is now a thing of the past. For those builders adopting this practice, they will now be faced with significant difficulty in obtaining Home Warranty Eligibility. 

If the Insurer determines that a builder applying for Home Warranty Eligibility has a history of insolvency or deregistration of any companies they may have been associated, or reveals any historical adverse information, the insurer is obliged to reject and cancel their eligibility application in full.

The Home Warranty Insurer takes a grim view of any builders who have a history of liquidating or deregistering their building companies and ultimately as the builder you run the risk of having your Home Warranty Eligibility withdrawn. This will then prevent you or your company from undertaking any contracts that require Home Owners Warranty insurance. .

Please note that this is not scare mongering, there are countless builders in various states that are in exactly this position and are having extreme difficulty in obtaining Home Warranty Eligibility. This inevitably restricts builders to only undertaking contract work where Home Warranty Insurance is not required, if a building license is granted or renewed.

We urge all builders that before considering whether or not to wind up your building company to speak your Home Warranty representative broker or arrange for your accountant and legal representative to speak to us.

We advise that MBA Insurance Services is a licensed insurance broker that can only represent you to the insurer if you have appointed us as your Home Warranty representative broker. At no other time can we represent you to the insurer for Home Warranty Insurance.