NSW Home Building Compensation Fund (HBCF) Generational Change 11/11/2016
On the 3rd November the NSW Government announced a significant overhaul of the HBCF that administers home owners warranty in NSW.
Notable changes include:
- The NSW Government is planning to exit the home warranty market within 2 years.
- The NSW Government will inject monies into the HBCF to cover the current deficit; the required injection is in excess of $300 million.
- Reforms will establish a framework to allow private insurers to re-enter the market and offer home compensation products. In order to enter the market private insurers will satisfy State Insurance Regulatory Authority (SIRA) Guidelines. (These guidelines are still to be developed).
- Levels of consumer protection remain unchanged i.e. the triggers that invoke the warranty policy, the 2 and 6 year cover and the level of home owner’s entitlement i.e. $340,000 will not change.
- Premiums will increase in 4 tranches over 2 years commencing in March 2017.
- Commencing March 2017 premiums will be adjusted to reflect the systems assessment of the builders/trade persons’ individual risk.
- The cross subsidisation by low risk building sectors of high risk sectors will cease in March 2017.
- New risk management initiatives for builders will be introduced, such as prescribed training and/or a regime of project inspection.
- Broker commissions will cease in March 2017.
- Between March 2017 and September 2017 the broker network will be substantially reduced.
Legislation to support changes will be introduced to the NSW Parliament in the first half of 2017.
The NSW Government has stated they will release further details around the changes over the coming months. Master Builders and MBAIS will participate in the advisory group to be consulted by the Government during the coming year.
It is important to note that between now and March 2017 builders and trade persons with eligibility under the HBCF will experience zero change in their user experience when accessing the HBCF system. Following March 2017 premiums will change and an online job application service will commence operation.
MBAIS will provide regular updates as information on changes to the HBCF come to hand.
Visit the State Government's website for more information in relation to the changes:
HBCF Reforms Q & A Sheet Or contact one of the following MBAIS staff members:
Leeanne Farmer - Home Warranty Team Leader Luke Hueston - State Manager
Phone: (02) 8586 3555 | Email: email@example.com