Home Indemnity Insurance WA

Are Owner Builders required to obtain Ministerial Exemption if they wish to sell their home within the first 3 years?

Owner Builders – No

Registered Builders – Yes

Owner-builders are responsible for the building work carried out for a minimum of six years. If the owner-builder sells the home within seven years from the date of a building permit being issued, they are required under the Home Building Contracts Act 1991 to have in place a policy of home indemnity insurance that covers subsequent owners if problems with the building develop and the owner-builder is unable or fails to rectify faulty or unsatisfactory workmanship due to disappearance, death or insolvency.

The home indemnity insurance policy must cover the purchaser of the home and subsequent owners for the remainder of the seven year period.

All residential building work valued over $20,000 must be covered by home indemnity insurance, however home indemnity insurance is not required for ‘associated work’, such as building only a pergola, fence or swimming pool.

The prospective purchaser should be provided with a valid certificate of insurance before the sale contract is finalised. Failure to do so can lead to prosecution and a $10,000 fine. If HII cannot be obtained, the property cannot be sold within seven years of obtaining the building permit.