Claims Management Policy - SecureBuild · management process to make it simpler and easier for homeowners to lodge a claim, receive relief under their policy and quick ly move forward

1 Home Building Compensation Fund – Claims Management Policy – Version 1.0 © SecureBuild Australia Holdings Ltd 2018

Claims Management Policy 2018 Effective from 1 January 2018. This document has been prepared by: SecureBuild Australia SecureBuild Australia Holdings Ltd ABN: 20 624 004 351 p. PO Box 194, Georges Hall NSW 2198 t. (02) 8713 1800 f. (02) 8713 1818 e. [email protected] w www.securebuild.com.au


Version 1.0 1. Introduction 3

1.1 Guidelines Purpose 1.2 Home Building Compensation Fund Objectives 1.3 Claims

2. Post construction (‘first resort’) defect resolution__ 4 2.1 Dispute Management 2.2 Referral of matters to NSW Fair Trading

3. Claims Management 7 4. Non-acceptance of indemnity offer by homeowner(s) (claimants)___ 14 5. Declinatures (declining claims) 15 6. Decision Review Committee 16 7. Customer Service Standards 17 Appendix A Terms & Conditions 19 Appendix B Fidelity Fund Contracts (Policies) 21 Appendix C HBC Claim form _______28 Appendix D Prescribed Claim Information 34 Appendix E Letter of Receipt _______35 Appendix F Acceptance Letters 36 Appendix G Acceptance of Offer, Release and Subrogation Letter _______39 Appendix H Rectifying Builder Panel ___ 43 Appendix I Indemnity Offer Letters 44 Appendix J Refusal of Indemnity Offer _______48 Appendix K Decision Letter 49 Appendix L Declinature Letter 51 Appendix M DRC (Internal Review Outcome) Letter 53 Appendix N SecureBuild Specific Contract Clauses 54 Appendix O Home Building Act 1989 - Key Definitions _______55


1. Introduction

1.1 Guidelines’ Purpose These guidelines have been developed in compliance with the Home Building Act 1989, the Home Building Regulation 2014 and the Home building compensation (premium) insurance guidelines published 22 December 2017. These guidelines are available to provide builders, contractors, brokers, professional advisors and homeowners with a key reference source for providing the HBCF products offered by SecureBuild Australia as part of the NSW Home Building Compensation Fund (HBCF) Scheme. The HBCF is the consumer protection scheme in NSW that provides protection for homeowners under the Home Building Act 1989. SecureBuild is the trading name of SecureBuild Australia Pty Ltd, which has been issued a licence by the NSW Government to provide homeowners with policies under the HBCF Scheme.

1.2 Home Building Compensation Fund Objectives Cover under the HBCF is an integral component of the Government’s consumer protection strategy for homeowners having building work undertaken in NSW. Cover provides specific safety net protection where a builder is unable or unwilling to fulfil their contractual obligation to a homeowner. This includes where the contractor does not begin or complete work under a building contract and/or return and rectify defective work because of death, disappearance or insolvency [including licence suspension for failure to comply with a compensation (money) order of a Court or the NSW Civil and Administrative Tribunal (NCAT) in favour of the homeowner]. It also protects successors in title.

• Provide a scheme that meets the minimum requirements for a licensed builder under the Home Building Act 1989. • Proactively protect homeowners by identifying unacceptable risks and taking appropriate action. • Ensure that builders are able to take on a level of work (and have access to cover) commensurate with their capacity to do

so. • Minimise unnecessary disruption to the NSW residential construction industry and ensure a consistent approach to the

underwriting of insurance without consideration of market influences. • Contribute to the improvement in standards within the NSW residential construction industry.

By introducing new and innovative products to the HBC market, SecureBuild is committed to providing builders and homeowners with substantially better outcomes than can be delivered by traditional insurance risk transfer products. In addition to this, SecureBuild’s products deliver on each of the HBC fund objectives.]

1.3 Claims The risk-mitigating activities and services of SecureBuild will significantly reduce the risk of a loss being suffered by a homeowner. However, there will inevitably be some instances where losses (e.g. deposits lost when a builder goes into insolvency) do occur. The good news is – under these traumatising circumstances, SecureBuild’s risk-mitigation activities and services respond rapidly and thereby enhance the homeowner’s experience while substantially reducing loss adjustment and claims costs. The homeowner’s suffering (due to builder bankruptcy, insolvency, death, disappearance, or inability to satisfy an order from a court or tribunal.) is considerably lessened. This document sets out the processes for the management of claims received by SecureBuild under the fidelity fund contracts (policies) that have been issued on behalf of SB Fidelity Ltd (SecureBuild). SecureBuild has designed its claim management processes with the understanding that homeowners are under significant stress and anxiety when the most significant purchasing decision of the lifetime has gone wrong. Accordingly, SecureBuild has designed its claims management process to make it simpler and easier for homeowners to lodge a claim, receive relief under their policy and quickly move forward with their lives. Acknowledging that the vast majority of defective work issues occur when the builder is not bankrupt, insolvent, disappeared etc, homeowners who have fidelity fund contracts (policies) with SecureBuild will be able to seek SecureBuild’s assistance to remedy post-construction defects regardless of a claim being triggered.


2. Post construction (‘first resort’) defect resolution Pursuant to clauses within the Terms & Conditions of registration with SecureBuild, builders are obligated to rectify defects SecureBuild detects during or following construction (see Appendix A – in particular clause 6.1). Where a builder is not bankrupt, insolvent, dead, disappeared or subject to an outstanding money order issue by a court or tribunal, SecureBuild will utilise clause 6.1 of the Terms & Conditions of registration to assist homeowners with enforcing their statutory warranty rights under the Home Building Act 1989. The ability of SecureBuild to assist homeowners in this regard, prior to an event allowing them to lodge a claim, is commonly referred to as ‘first resort’ cover protection. Before moving onto outlining our claim management processes, this section of SecureBuild’s Claims Management Policy sets out our process for assisting homeowners with post construction defect resolution.

2.1 Dispute Management Disputes do happen; and they can mostly be attributed to poor communication on the part of the builder – and/or the homeowner’s lack of familiarity with building processes and related laws. Other disputes arise when homeowners withhold payments because they’re dissatisfied with the standards or progress of the project. And then there are the post-construction disputes. These typically relate to a homeowner’s belief that latent defects exist and the builder is refusing to attend to them during the 6-year statutory warranty period (major defects) and 2-years for minor defects). In all these situations, SecureBuild is ideally placed to help both builder and homeowner reach a quick resolution to the problems. SecureBuild will only intervene to assist in resolving the dispute where:

• The home owner has first brought the issues to the attention of the builder; and • The builder has failed or is refusing to resolve the issues; and • Those issues relate to defective or incomplete work.

Where the dispute relates to contractual issues, SecureBuild will not intervene to assist. In these circumstance, the homeowner and builder will be advised to seek their own legal advice. Disputes during the course of the project Where a homeowner requests the assistance of SecureBuild to resolve a dispute or issue they have with their builder, the homeowner will be advised to put their issues in writing and forward these to the builder and seek a response. Should the homeowner’s issues relate to a lack of understanding of the building process or legal framework, they will be provided with information that addresses their misunderstanding. In some instances, the homeowner will be directed to or be provided with a copy of the relevant legislation, code or standard that relates to the issue(s) in contention. If the homeowner has sought a response to issues and the builder has refused or failed to respond, SecureBuild’s building inspector for that project will raise this with the builder. The Builder will be advised that if the issues relate to defective or incomplete work, SecureBuild will conduct an inspection and, in keeping with our Terms & Conditions, the builder will be requested to remedy any incomplete or defective work found. Builders will incur an hourly cost for SecureBuild’s involvement in resolving any dispute with their homeowner client. More typically however, disputes will occur at a progress payment stage where the homeowner is not satisfied with either the progress or quality of the building work and is withholding payment. This is much less likely to occur as a result of SecureBuild’s progress payment approval and inspection service. However, the quick resolution of payment disputes is important in ensuring the builder’s cash flow and preventing unnecessary delays and costs in completing the project. In the first instance, SecureBuild’s building inspectors will attempt to resolve the payment dispute over the telephone. However, if this is not successful a site inspection and on-site meeting will be arranged. Where the site inspection by the building inspector finds no defective or incomplete work, the homeowner and builder will be advised of the findings. Should the homeowner disagree with the inspection findings and continue to withhold payment, they will be advised of the consequences of this course of action (i.e. cessation of the project, a possible breach of contract and the lodgement of a claim in NCAT by the builder). In these circumstances SecureBuild will not charge the builder for the cost of the site inspection.


On the other hand, where a site inspection does disclose defective or incomplete work, the builder will be provided with an itemised report listing the defective and/or incomplete items to be resolved. Arrangements will be made for a follow-up inspection to occur to ensure all incomplete and/or defective work items have been addressed. In keeping with SecureBuild’s Terms & Conditions, builders/contractors will be charged for the costs associated with the site-inspection and follow-up inspection. These charges are designed to act as an incentive to builders to adequately supervise the building work and promptly resolve any defect or incomplete work issues raised with them by the clients. In circumstances where the builder/contractor disagrees with the building inspector’s list of defective or incomplete items, they can seek a review by the Executive Manager, Risk Mitigation Services and Claims. Where the review by the Executive Manager, Risk Mitigation Services and Claims affirms the defects and/or incomplete work item list and the builder refuses to attend to them, in keeping with SecureBuild’s Terms & Conditions the matter is:

• To be referred to the Executive Manager, Registration, Assessments and Risk Management, to determine whether the builder should be de-registered (see section 5 of SecureBuild’s Builder registration (Eligibility) Policy); and

• To be referred to NSW Fair Trading (see section 2.2 below).

Post construction defect disputes

Where a homeowner requests the assistance of SecureBuild to resolve a dispute or issue they have with their builder, the homeowner is to be advised to put their issues in writing and forward these to the builder and seek a response. If these issues relate to a lack of understanding of the building process or legal framework, they will be provided with information that addresses their misunderstanding. The homeowner(s) will be directed to or provided with a copy of the relevant legislation, code or standard that applies to the issue(s) they are raising. But when the homeowner has sought a response to issues and the builder has refused or failed to respond to those issues, SecureBuild’s building inspector for that project will raise these with the builder. The builder will be advised that as the issues relate to defective work, SecureBuild will conduct an inspection and, in keeping with our Terms & Conditions, the builder will be requested to remedy any incomplete or defective work detected Builders will incur an hourly cost for SecureBuild’s involvement in resolving any dispute with their homeowner client. Whilst this is much less likely to occur as a result of SecureBuild’s progress payment approval and inspection service, there may be instances where defects become apparent years after the work has been completed (e.g. water ingress). In the first instance, SecureBuild’s building inspectors will attempt to resolve the dispute over the telephone. However, if this is not successful a site inspection and on-site meeting will be arranged. If the building inspector finds no defective or incomplete work on site, the homeowner and builder are to be advised of these findings. Should the homeowner disagree with the inspection findings they will be advised of the options open to them (e.g. NSW Fair Trading Dispute Resolution Service and/or NCAT). In these circumstances SecureBuild would not charge the builder for the cost of the site inspection. However, where a site inspection does disclose defective or incomplete work, the builder will be provided with a report listing the defective and/or incomplete items to be resolved. A follow-up inspection(s) will occur to ensure that all incomplete and/or defective items are satisfactorily addressed by the builder/contractor. In keeping with SecureBuild’s Terms & Conditions, builders/contractors will be charged for the costs associated with the site-inspection and follow-up inspection. These charges are to act as an incentive to builders to adequately supervise the building work and promptly resolve any defect or incomplete work issues raised with them by the clients. Where the builder/contractor disagrees with the building inspector’s list of defective items, they can seek a review by the Executive Manager, Building Inspections and Claims. However, if the review by the Executive Manager, Building Inspections and Claim affirm the defects and the builder refuses to attend to them, in keeping with SecureBuild’s Terms & Conditions the matter is:

• To be referred to the Executive Manager, Registration and Assessments, to determine whether the builder should be de-registered (see section 5 of SecureBuild’s builder registration (eligibility) Policy); and

• To be referred to NSW Fair Trading (see section 2.2 below).


2.2 Referral of matters to NSW Fair Trading Referral of building disputes

As outlined in section 2.1, in circumstance where a builder/contractor registered with SecureBuild refuses to rectify or complete items detected by SecureBuild’s building inspectors then these matters will be referred to NSW Fair Trading. Whilst the builder’s/contractor’s actions may result in de-registration by SecureBuild (see section 5 of SecureBuild’s Builder Registration (Eligibility) Policy) it does not assist the homeowner in having the defects rectified or incomplete work completed. NSW Fair Trading Inspectors have the power to issue builders/contractors with rectification orders to fix defects or complete incomplete work. When builders fail to comply with these rectification orders they face disciplinary action which could result in suspension or cancellation of their builder’s licence. The referral to NSW Fair Trading will be done for and, on half of, the homeowners. SecureBuild will provide all inspections reports, photographs to support the homeowners dispute application with NSW Fair Trading. Should the builder subsequently face disciplinary action for failure to comply with NSW Fair Trading’s rectification order, SecureBuild will provide the evidence it holds together with a statement from our building inspector to support that process.

Reporting of poor or substandard performance by sub-contractors

Whilst carrying out its risk mitigation services, SecureBuild’s building inspectors will come across poor or substandard work by sub-contractors. SecureBuild’s primary task and intention is to educate tradespeople (sub-contractors) and builders to ensure that they understand their obligations and the requirements of the National Construction Code (NCC) and Australian Standards. As part of SecureBuild’s unique service offering, instances of poor or sub-standard work will be brought to the attention of the sub-contractors who (under the builder’s supervision) will be required to rectify the poor or sub-standard work. In holding the sub-contractor to account in this way, it is hoped that the sub-contractor improves their performance over time. Similarly, the builder will enhance their ability to supervise the work being carried out by their sub-contractors. However, where SecureBuild comes across repeated instances of poor or sub-standard performance by sub-contractors, it will report these matters to NSW Fair Trading so that disciplinary action came be taken against the sub-contractor. SecureBuild will provide NSW Fair Trading with a report setting out the repeated instances of poor or substandard work together with a statement from our Building Inspector to support the disciplinary process.


3. Claims Management 3.1 Notification or lodgement of a claim SecureBuild is licensed to provide:

• ‘Construction period’ fidelity fund contracts; • ‘Warranty period’ fidelity fund contracts; and • Combined fidelity fund contracts.

These products provide protection to consumers against losses in the following circumstances:

a) A person on whose behalf the work is being done against the risk of loss resulting from non-completion of the work because of the insolvency, death or disappearance of the contractor, and

b) A person on whose behalf the work is being done and the person’s successors in title against the risk of being unable, because of the insolvency, death or disappearance of the contractor:

(i) To have the contractor rectify a breach of a statutory warranty in respect of the work; or (ii) To recover compensation from the contractor for any such breach. (Section 99 of the Home Building Act

1989).

Claims from homeowner customers will be made under fidelity fund contracts (policies) issued to the homeowner(s) by SecureBuild which provide cover (indemnity) for:

i. The construction period; ii. The warranty period; or iii. Both periods (combined).

The fidelity fund contracts (policies) issued by SecureBuild can be found at Appendix B. SecureBuild provides its customers with a unique ‘paperless’ claims application experience. Homeowner(s) can either complete the online claim form or contact our call centre (13 33 14) to initiate the claims process. A hard copy claim form is also available to homeowner(s) (claimants) (See Appendix C) Given our risk mitigating service offering and close relationship with the homeowner(s) SecureBuild will already know a great deal about the project and any potential losses that could be suffered by the home owner. This substantially reduces the effort required by the home owner to lodge a claim. The maximum excess permitted by clause 54 of the Home Building Regulation 2014 is $250. SecureBuild’s homeowner customers will not be charged an excess. Following receipt of a claim, an automatic receipt will be issued to the home owner and a claim case created within SecureBuild’s CRM platform. A template letter of receipt is enclosed at Appendix E.

Guarantee of Service 1

A letter acknowledging receipt of a

claim will be immediately forwarded to the homeowner(s) (claimants)

3.2 Claim triggers The exposure to claims of SecureBuild’s fidelity fund continues to be ‘last resort’ in nature. In other words, the builder has to be insolvent, bankrupt, dead, have disappeared or have his/her licence suspended for failure to comply with a tribunal or court money order for a claim to be ‘triggered’. Given SecureBuild’s ongoing relationship with its builder/contractor clients, in the majority of cases, it will become aware that a trigger event has occurred prior to its homeowner customers. Where a trigger event occurs during the ‘construction period’ SecureBuild will notify the owner that the event has occurred and assist them with lodging a claim under the ‘construction period’ fidelity fund contract (policy) issued to them.


3.3 Level of cover Clause 62S of the Home Building Regulation 2014 sets out the minimum level of cover to be provided by the fidelity fund contracts issued by SecureBuild. An alternative indemnity contract must provide cover of no less than:

(a) In the case of a construction period fidelity fund contract—$340,000 in relation to each dwelling to which the fidelity fund cover relates, or

(b) In the case of a warranty period fidelity fund contract—$340,000 in relation to each dwelling to which the fidelity fund cover relates, or

(c) in the case of any other alternative indemnity contract in relation to residential building work that is required by section 92 of the Act—$340,000 in relation to each dwelling to which the fidelity fund cover relates, or

(d) in the case of any other alternative indemnity contract in relation to residential building work that is required by section 96 of the Act—$340,000 in relation to each dwelling to which the fidelity fund cover relates.

The level of cover provided by the fidelity fund contracts (policies) issued to homeowner(s) by SecureBuild set out the level of cover provided together with the limitations and exclusions applicable to the policies. A copy of the policy document(s) is enclosed at Appendix B.

3.4 On risk’ assessment The first step in the claims management process is determining whether SecureBuild is ‘on risk’. The term ‘on risk’ describes a process though which SecureBuild determines that there is:

• A valid policy in place; and • Whether the builder has in fact died, disappeared, become insolvent/bankrupt or is the subject of a court or tribunal money

order; and • Whether the loss has been suffered within the time period set out in the policy; and • Whether the claim has been lodged within the time limitations of the policy; and • Whether all the terms and conditions for indemnifying the beneficiary (homeowner) have been met.

a. Valid policy Upon receipt of a claim, SecureBuild will interrogate its database and files to ensure a valid policy was issued to the homeowner by SecureBuild. Misrepresentations or non-disclosures do not invalidate the fidelity fund contracts (policies) issued by SecureBuild. In accordance with clause 62I of the Home Building Regulation 2014, SecureBuild is not entitled to either refuse to pay a claim under the contract, or to cancel the contract on the ground that it was obtained by misrepresentation or non-disclosure by the contractor; or that the policy premium was not paid providing, in the latter case, that a certificate evidencing insurance has been given; or the insurer has otherwise accepted cover.

b. Evidence of death, disappearance, insolvency/bankruptcy and money orders The death of a builder is a very rare event that gives rise to a claim. A claim involving death would only occur where the builder is a sole trader. Where the building business is a partnership or company, it is usual for the other partner or company to continue running the building business.

• Death SecureBuild will obtain a copy of the death notice or death certificate from the associates of the builder or NSW Office of Births, Deaths & Marriages.

• Disappearance Disappearance events are somewhat harder for the homeowner to provide evidence of. SecureBuild will carry out its own inquiries to satisfy itself that the builder has disappeared. Again, this a very rare occurrence and typically relates to a sole trader.

• Bankruptcy/Insolvency A search of the Australia Financial Security Authority’s website will provide evidence of a builder’s insolvency or bankruptcy. However, given our monitoring processes and relationship with our builder/contractor and homeowner customers, it is highly probable that SecureBuild will have advanced knowledge of a builder’s impending bankruptcy or insolvency. In these circumstances, SecureBuild will contact the administrator or liquidator appointed to the building business to ensure that SecureBuild is kept up to date with any potential winding up or liquidation process. As a highly customer-centric organisation, where the builder has been declared bankrupt or insolvent SecureBuild will contact affected homeowner(s), explain the situation and assist them with initiating the claims process thereby reducing the emotional impact of the insolvency event to the homeowners.


c. Period of Cover Clause 62G of the Home Building Regulation 2014 sets out the time periods that apply to each fidelity fund contract issued by SecureBuild.

• An alternative indemnity contract must provide cover for loss arising from non-completion of the work for a period of not less than 12-months after the failure to commence, or cessation of the work that is the subject of the cover.

• An alternative indemnity contract (other than a construction period fidelity fund contract) must provide cover for other loss

covered in accordance with the Act for a period of not less than:

i. In the case of loss arising from a major defect in residential building work (within the meaning of section

18E of the Act) — 6-years after completion of the work; or

ii. In the case of any other loss — 2-years after completion of the work.

• A construction period that the fidelity fund contract must cover (for loss insured in accordance with the Act) is for a period

of not less than 12-months, after the failure to commence or cessation of the work that is the subject of the cover.

Upon receipt a claim, SecureBuild will determine if the ‘loss’ subject of the claim occurred within the time periods set out within clause 62G.

d. Time limitations for notifying of a loss There are also time limits that apply to the homeowner(s), making them responsible for notifying SecureBuild within the timeframes set out within clause 47 of the Home Building Regulation 2014. In relation to defective building work, under the policy (and regulation) the homeowner is required to notify SecureBuild no later than 6-months after they first become aware, or ought to be reasonably aware, of the fact or circumstance under which the claim arises. In the case of a loss or damage resulting from incomplete work, the homeowner(s) is required to notify SecureBuild no later than 12-months after:

• The contract date, or • The date provided in the contract for commencement of work, or • The date work ceased, whichever is the latest.

These limitations are designed to reduce the cost to SecureBuild and other providers of indemnifying homeowners. The rationale behind the limitations is that the longer defects or incomplete work exists, the worse they become and the more they cost to fix or complete. The courts have held that the failure of a homeowner to lodge a claim within these time frames does not preclude them from being indemnified by SecureBuild. However, SecureBuild may reduce the size or the quantum of the indemnification by the deducting the additional cost incurred as a result of the late notification. e. Other limitations and exclusions Clause 42 of the Home Building Regulation 2014 also sets out those events and losses that are excluded from the policy. These exclusions are contained within the fidelity fund contract (policy) documents provided to the homeowner(s) at the time the ‘evidence of cover’ certificate was issued to them (see Appendix B).


3.5 On risk decision and acceptance of the claim The Home Building Compensation (claims handling) Insurance guidelines issued by SIRA, state that (for the purposes of clause 39 of the Home Building Regulation 2014) a claim is deemed to be received by the licence holder on that date when the licence holder receives the prescribed claim information from the claimant. The definition of ‘prescribed claim information’ can be found at Appendix D. Despite the definition, SecureBuild will not place burdens on homeowner(s) (claimants) to prove death, insolvency, bankruptcy or disappearance of their builder. Much of the prescribed information will be known to and accessible by SecureBuild. Accordingly, SecureBuild will immediately commence investigating and assessing its ‘on risk’ status.

Where additional information is required from homeowner(s) (claimants) SecureBuild will contact the homeowner(s) (claimants) by telephone and in writing within 24-hours of determining that further information is required.


Contact homeowner(s) (claimants)

within 24-hours of determining that addition information is required to

determine SecureBuild’s acceptance of the claim.

After examining all information provided by the homeowner(s) together with the information held and obtained by SecureBuild, the homeowner(s) will be advised of SecureBuild’s ‘on risk’ determination, as well as next steps in the claims management process. Where the claims assessment process determines that:

• There is a valid policy in place; and • There is evidence that the builder has in fact died, disappeared, become insolvent/bankrupt or is the subject of a court or

tribunal money order; • The loss was suffered within the time period set out in the policy; and • The circumstances of the losses claims are not excluded under the policy,

the homeowner will be advised by mail that SecureBuild has accepted the claim and will be proceeding to conduct an assessment of the quantum of the indemnification (section 3.6) Copies of the acceptance letters issued by SecureBuild are enclosed at Appendix F. Where SecureBuild has doubt about any of the threshold elements being met, then the homeowner will be contacted and asked to provide additional information to assist with the ‘on risk’ determination. Should one of these threshold elements not be met, then the homeowner(s) (claimant(s)) will be notified (see section 4). Generally, ‘on risk’ decisions are required to be made within 10 business days of receipt of the claim and all required information.


‘On risk’ decisions and acceptance

of claims are to be made within 10 business days of receiving a completed claim from the

home owner.


3.6 Loss Adjustment (claims assessment) a. Loss of deposits (construction period fidelity fund contract) For claims that relate to the loss of a deposit by the homeowner under a ‘construction period’ fidelity fund contract (policy), SecureBuild will obtain evidence from the homeowner of the payment made to the builder. When evidence of payment has been received, SecureBuild will notify the homeowner(s) (beneficiaries) of its acceptance of their claim and its indemnification offer. (see acceptance letters at Appendix F). The homeowner(s) (beneficiaries) will be asked to sign the acceptance, release and subrogation document (see Appendix F). This document absolves SecureBuild from any future claims being made under the policy for that specific incomplete or defective work element and provides SecureBuild with the legal right to pursue recovery of the claims costs from the builder or other relevant third party. Following receipt of the signed acceptance of offer, release and subrogation document from the beneficiaries, SecureBuild will complete an electronic transfer of the indemnification amount to the beneficiaries’ nominated back account. Electronic payments are to be made within 48-hours of receipt of a signed release and subrogation form from the home owner.


Electronic transfer of funds is to occur

within 48-hours of SecureBuild receiving a signed acceptance of offer, release and subrogation form from the

homeowner(s) (beneficiaries).

b. Incomplete work claims (construction period fidelity fund contract) Following our acceptance of a claim (see section 3.5), SecureBuild will immediately allocate a loss adjustment case to the building inspector overseeing the project to carry out the loss adjustment (scoping process). Generally, the loss adjustment case is to be allocated to the building inspector who had carriage of managing the project case file which is now the subject of the claim. The building inspector will contact the homeowner within 48-hours of receiving the loss adjustment case file to organise a suitable time to carry out the loss adjustment inspection(s).


Contact to be made with

homeowner(s) (claimants) within 48-hours of the

acceptance of the claim.

Generally, given SecureBuild’s progress payment and inspection process, no loss should have been suffered by the homeowner when an insolvency or bankruptcy event occurs. Notwithstanding, there may be incomplete/defective items that need to be attended to or, at the very least, costs will be incurred by the homeowner in contracting with another builder to complete the building project. SecureBuild’s building inspector will carry out an inspection and develop a scope of work which includes all incomplete or defective work items. The inspection assessment and the development of the scope of work is to be completed within 10 business days.


Inspection assessment and scope of work to be completed within 10 business days of acceptance

of the claim by SecureBuild.


Should the building inspector require the assistance of an expert (e.g. Geotech), SecureBuild will notify the homeowner(s) (claimants) that there may be a delay with the loss adjustment and assessment process. The homeowner(s) (claimants) will be provided with a date for the completion of the loss adjustment assessment process. Once the loss adjustment assessment has been completed by SecureBuild’s building inspector, SecureBuild will issue a scope of works (incomplete & defective elements) together with the original plans and specifications to at least two (preferably three) builders on its rectifying builder panel. SecureBuild’s rectifying builder panel list can be found at Appendix H. Under their panel agreement with SecureBuild, rectifying builders have 20 business days to respond to the scope of work issued to them.


Rectifying builders have 20 business days to respond to a scope of work

issued to them by SecureBuild.

When quotes are received back from the rectifying builders, SecureBuild will assess and determine the best quote in terms of value for money and readiness to complete the work on behalf of the homeowner(s) (claimants). Within 5 business days of receipt of the final rectifying builder quote, SecureBuild will notify the homeowner(s) (claimants) of SecureBuild’s offer of indemnity. A copy of the letters of offer of indemnity are enclosed at Appendix I. The letter of offer of indemnity will also include a release and subrogation document (see Appendix G).


Notification to homeowner(s)

(beneficiaries) of SecureBuild’s offer of indemnity within 5 business days of

receiving the final quote from its rectifying builders.

Once the offer of indemnity, the release and subrogation form are accepted by the homeowner(s) (beneficiaries), SecureBuild will have the rectifying builder enter into a contract with the homeowner(s) (beneficiaries) within 10 business days.


Homeowner(s) (beneficiaries) enter into a contract with the rectifying builder within 10 business days of

accepting the offer of indemnification.

As part of the indemnification SecureBuild will provide the rectifying builder with a new combined fidelity fund contract (policy). Indemnity settlement by payment Generally, excluding claims relating to loss of deposits, SecureBuild will seek to indemnify homeowner(s) (beneficiaries) by making payments to a rectifying builder who will enter into a contract with the homeowner(s) to complete incomplete work and/or rectify defects. SecureBuild considers this to be a superior outcome for homeowner(s)(beneficiaries) as the homeowner receives additional protection of new contracts issued to the rectifying builder. Subsequent owners of the home can be assured that any incomplete or defective work, which was the subject of a HBC claim has been attended to. However, there will be occasions where SecureBuild may decide to indemnify the beneficiary by making a payment as means of settling a claim. Circumstance that may give rise to settlement by the making of a payment include (but are not limited to):

• Where the cost of incomplete or defective work exceeds the maximum level of indemnification under the fidelity fund contract (policy); or

• Where it is difficult for SecureBuild to engage a rectifying builder to contract with the beneficiary to complete the building work or rectify the defects; or

• SecureBuild and the homeowner(s)(beneficiaries) have agreed that the making of a payment to settle the claim is mutually beneficial to both parties.


NB: SecureBuild retains the right to determine whether settlement by payment will apply. Such decisions are not considered reviewable decisions. Should SecureBuild elect to indemnify the homeowner(s)(beneficiaries) by making a payment, the homeowner(s) (beneficiaries) will be asked to sign the acceptance, release and subrogation document (see Appendix G). This document absolves SecureBuild from any future claims being made under the policy for that specific incomplete or defective work element and provides SecureBuild with the legal right to pursue recovery of the claim’s costs from the builder or other relevant third party. Following receipt of the signed acceptance of offer, release and subrogation documents from the beneficiaries, SecureBuild will complete an electronic transfer of the indemnification amount to the beneficiaries nominated back account. Electronic payments are to be made within 48-hours of receipt of a signed release and subrogation form from the home owner. Guarantee of service 3 (above) applies. Upon completion of the project SecureBuild will contact the home owner to obtain their feedback regarding their experience. c. Defective building work claims (warranty period fidelity fund contracts) Following our acceptance of a claim (see section 3.5), SecureBuild will immediately allocate a loss adjustment case to the building inspector to carry out the loss adjustment (scoping process). Generally, the loss adjustment case is to be allocated to the building inspector who did not have carriage of managing the project case file which is now the subject of the claim. The building inspector allocated to undertake the loss adjustment process will contact the homeowner within 48-hours of receiving the loss adjustment case file to organise a suitable time to carry out the loss adjustment inspection(s).


Contact to be made with

homeowner(s) (claimants) within 48-hours of the

acceptance of the claim.

SecureBuild’s building inspector will carry out an inspection and develop a scope of work that includes all defective work items. The inspection assessment and the development of the scope of work is to be completed within 10 business days.


Inspection assessment and scope of work to be completed within 10 business days of acceptance

of the claim by SecureBuild.

Should the building inspector require the assistance of an expert (e.g. Geotech), SecureBuild will notify the homeowner(s) (claimants) that there may be a delay with the loss adjustment and assessment process. The homeowner(s) (claimants) will be provided with a date for the completion of the loss adjustment assessment process. Once the loss adjustment assessment has been completed by SecureBuild’s building inspector, SecureBuild will issue the scope of work to at least two (preferably three) builders on its rectifying builder panel. Under their panel agreement with SecureBuild, rectifying builders have 20 business days to respond to the scope of work issued to them. SecureBuild’s rectifying builder panel list can be found at Appendix H. When quotes are received back from the rectifying builders, SecureBuild will assess and determine the best quote in terms of value for money and readiness to complete the work on behalf of the homeowner(s) (claimants). Within 5 business days of receipt of the final rectifying builder quote, SecureBuild will notify the homeowner(s) (claimants) of SecureBuild’s offer of indemnity. A copy of the letters of offer of indemnity are enclosed at Appendix I. The letter of offer of indemnity will also include a release and subrogation document (see Appendix G).



Notification to homeowner(s) (beneficiaries) of SecureBuild’s offer of

indemnity within 5 business days of receiving the final quote from

its rectifying builders.

Once the offer of indemnity, the release and subrogation forms are received and accepted by the homeowner(s) (beneficiaries), SecureBuild will have the rectifying builder enter into a contract with the homeowner(s) (beneficiaries) within 10 business days.


Homeowner(s) (beneficiaries) enter into a contract with the rectifying builder within 10 business days of

accepting the offer of indemnification.

As part of the indemnification, SecureBuild will provide the rectifying builder with a new combined fidelity fund contract (policy). Indemnity settlement by payment Generally, excluding claims relating to loss of deposits, SecureBuild will seek to indemnify homeowner(s) (beneficiaries) by making payments to a rectifying builder who will enter into a contract with the homeowner(s) to complete incomplete work and/or rectify defects. SecureBuild considers this to be a superior outcome for homeowner(s)(beneficiaries) as the homeowner receives additional protection of new contracts issued to the rectifying builder and sub-sequent owners of the home can be assured that any incomplete or defective work which was the subject of a HBC claim have been attended to. However, there will be occasion where SecureBuild may decide to indemnify the beneficiary by making a payment as means of settling a claim. Circumstance that may give rise to settlement by the making of a payment include (but are not limited to):

• Where the cost of incomplete or defective work exceeds the maximum level of indemnification under the fidelity fund contract (policy); or

• Where it is difficult for SecureBuild to engage a rectifying builder to contract with the beneficiary to complete the building work or rectify the defects; or

• SecureBuild and the homeowner(s)(beneficiaries) have agreed that the making of a payment to settle the claim is mutually beneficial to both parties.

NB: SecureBuild retains the right to determine whether settlement by payment will apply. Such decisions are not considered reviewable decisions. Should SecureBuild elect to indemnify the homeowner(s)(beneficiaries) by making a payment, the homeowner(s) (beneficiaries) will be asked to sign the acceptance, release and subrogation document (see Appendix G). This document absolves SecureBuild from any future claims being made under the policy for that specific incomplete or defective work element and provides SecureBuild with the legal right to pursue recovery of the claims costs from the builder or other relevant third party. Following receipt of the signed acceptance of offer, release and subrogation document from the beneficiaries, SecureBuild will complete an electronic transfer of the indemnification amount to the beneficiaries nominated back account. Electronic payments are to be made within 48 hours of receipt of a signed release and subrogation form from the homeowner. Guarantee of Service 3 (above) applies. At the end of the rectification process SecureBuild will survey the homeowner to obtain their feedback regarding their experience.

3.7 Loss Adjustment (claims management) costs All claims management costs will be paid from SecureBuild’s fidelity fund.

3.8 Supply of data to the State Insurance Regulatory Authority (SIRA) APIs have been developed that will transfer (in real time) information regarding the claims received and managed by SecureBuild as required by SIRA as part of SecureBuild’s licensing conditions with the NSW Government.


4. Non-acceptance of indemnity offers by homeowner(s) (claimants) Where a claimant is unsatisfied with SecureBuild’s indemnity offer, they will be contacted within 48-hours of refusing the offer so that SecureBuild can learn more about the reasons behind the refusal.


Homeowner(s) (claimants) to be

contacted within 48- hours of refusing an indemnity offer to understand

reason for the refusal.

Where discussions with the claimant result in the acceptance of the offer then the processes outline above will apply. However, where the homeowner(s) (claimants) remain dissatisfied with the offer, they are to be provided with correspondence setting out the reasons for SecureBuild’s decision regarding the indemnity offer made together with their rights to:

• Seek an internal review of our decision by SecureBuild’s Decisions Review Committee (DRC); and/or • Lodge an appeal of our decision with the NSW Civil & Administrative Tribunal (NCAT) or the NSW Supreme Court (where

your claim involves an amount in excess of $500,000).

The homeowner(s) (claimants) will also be advised that should they believe SecureBuild’s management of their claim did not comply with the NSW Home Building Act 1989, Regulation or Guidelines they may seek a regulator compliance review by the State Insurance Regulatory Authority (SIRA). A copy of the correspondence to be forwarded to homeowner(s) (claimants) who refuse an indemnity offer and remain dissatisfied with SecureBuild’s decisions, is enclosed at Appendix J along with written reasons for SecureBuild’s decision in respect of their claim. (Appendix K).


Correspondence setting out the

reasons for SecureBuild’s decision and the homeowner(s) (claimants) rights to

internal and external review is to be sent within 5 business days of the

receipt of the refusal to accept SecureBuild’s indemnity offer.


5. Declinatures (declining claims) Where SecureBuild’s ‘on risk’ and claims assessment process determines that if:

• No valid policy was issued by SecureBuild in relation to the building work which is the subject of the claim; and/or • The items set out within a claim are outside the applicable time limits set out within the fidelity fund contract (policy) and

regulation; and/or • The items set out within a claim are determined as not being incomplete or defective work attributable to the claimant’s

builder/contractor,

Then, the claim will be declined. When declinature decisions are made, SecureBuild’s claim staff will contact the homeowner(s) (claimants) to explain the reasons for its declinature decision. Contact will be made with the homeowner(s) (claimants) within 48-hours of the declinature decision being made.


Homeowner(s) (claimants) to be contacted within 48- hours of a declinature decision being made to explain the reason for

the declinature decision.

Following contact being made with the homeowner(s) (claimants), SecureBuild will provide them with correspondence setting out the reasons for the declinature decisions together with their rights to:

• Seek an internal review of our decision by SecureBuild’s Decisions Review Committee (DRC); and/or • Lodge an appeal of our decision with the NSW Civil & Administrative Tribunal (NCAT) or the NSW Supreme Court (where

your claim involves an amount in excess of $500,000.)

The homeowner(s) (claimants) will also be advised that should they believe SecureBuild’s management of their claim did not comply with the NSW Home Building Act 1989, Regulation or Guidelines they may seek a regulator compliance review by the State Insurance Regulatory Authority (SIRA). A copy of SecureBuild’s declinature letter to homeowner(s) (claimants) is enclosed at Appendix L. SecureBuild will issue a declinature letter to the homeowner(s)(claimant) within 5 business days of the declinature decision being made.


SecureBuild will issue a declinature letter to homeowner(s) (claimants)

within 5 business days of the declinature decision being made.


6. Decision Review Committee SecureBuild’s Decisions Review Committee (DRC) SecureBuild has established and will maintain a Decisions Review Committee (DRC). The DRC includes two senior executives of SecureBuild, who will also provide the chair of the committee. The committee will also have (1) industry representatives (each with a reserve) as nominated by the Master Builders Association of NSW. The DRC will not convene without an industry representative participating. SecureBuild’s DRC is to operate as a committee of review consisting of industry experts and builders, constituted by SecureBuild to internally review the decisions made by SecureBuild that affect both its builder/contractor and homeowner customers. These decisions include:

• Refusal by SecureBuild to register a builder/contractor; and • Suspension or cancellation of a builder’s/contractor’s registration with SecureBuild; and • Partial or full declinature of claims made under the fidelity fund contracts (policies) issued by SecureBuild.

The DRC will also be responsible for reviewing and making recommendations regarding changes to this claims management policy and SecureBuild’s procedures as well as consideration of other matters and related processes. The DRC will meet as required. It shall make its determinations having regard to prudent insurance industry practice, the Home Building Act 1989, Home Building Regulation 2014 guidelines issued and published by SIRA together with case law relating to HBC claims. Where a committee member has a conflict of interest in any matter, they must abstain from decision-making in relation to the particular matter. SecureBuild will conduct an internal review within 20 business days of receiving a request for a review from homeowner(s) (claimants).


SecureBuild’s DRC will conduct

an internal review of a decision within 20 business days of

receiving a request from the homeowner(s) (claimants).

Following their review of SecureBuild’s decision in respect of a claim declinature, the DRC can determine to:

• Overturn the original decision; or • Amend the original decision; or • Uphold the original decision.

SecureBuild will immediately contact the homeowner(s) (claimants) to advise them of the outcome of the review conducted by the DRC. The Chair of the DRC will issue correspondence to the homeowner(s) (claimants) setting out the outcome of the internal review conducted and provide reasons for the determination made by the DRC. The correspondence setting out the outcome of the DRC’s internal review together with its reasons will be issued to homeowner(s) (claimants) within 5 business days of the DRC’s review. A template DRC letter to claimants can be found at Appendix M.


The Chair of the DRC will issue

correspondence to homeowner(s) (claimants) setting out the outcome of the internal review and reasons for its determination within 5 business days

of the review.

Internal review decision made by the DRC are binding upon SecureBuild. Accordingly, where the DRC overturns or amends a decision made by SecureBuild, it will immediately commence processes to make indemnity offers to the homeowner(s) (beneficiaries) SecureBuild’s ‘Complaints and Disputes Policy’ provides further detailed guidelines on the handling of complaints and disputes in relation to decisions involving applications for, or a review of, registration and applications for a Certificate (project certificate) for a specific project.


7. Customer Service Standards Standards The Market Practice Guidelines made under the Home Building Act 1989 require SecureBuild to document its service standards. Notwithstanding, being a customer-centric organisation, SecureBuild has developed ‘guarantee of service’ standards and is committed to delivering for every customer. The service guarantees that apply to all SecureBuild’s services are contained within SecureBuild’s Customer Charter.

Table 1. Service Standard for Dispute Resolution and Claims Management

Guarantee of Service 1 A letter acknowledging receipt of a claim will be immediately

forwarded to the homeowners (claimants) Guarantee of Service 2 Contact homeowner(s) (claimants) within 24-hours of

determining that additional information is required to determine SecureBuild’s acceptance of the claim

Guarantee of Service 3 ‘On risk’ decisions and acceptance of claims are to be made within 10 business days of receiving a completed claim from the home owner.

Guarantee of Service 4 Electronic transfer of funds is to occur within 48-hours of SecureBuild receiving a signed acceptance of offer, release and subrogation form from the homeowner(s) (beneficiaries).

Guarantee of Service 5 Contact to be made with homeowner(s) (claimants) within 48-hours of the acceptance of the claim.

Guarantee of Service 6 Inspection assessment and scope of work to be completed within 10 business days of acceptance of the claim by SecureBuild.

Guarantee of Service 7 Rectifying builders have 20 business days to respond to a scope of work issued to them by SecureBuild.

Guarantee of Service 8 Notification to homeowner(s) (beneficiaries) of SecureBuild’s offer of indemnity within 5 business days of receiving the final quote from its rectifying builders.

Guarantee of Service 9 Homeowner(s) (beneficiaries) enter into a contract with the rectifying builder within 10 business days of accepting the offer of indemnification.

Guarantee of Service 10 Homeowner(s) (claimants) to be contacted within 48-hours of refusing an indemnity offer to understand reason for the refusal.

Guarantee of Service 11 Correspondence setting out the reasons for SecureBuild’s decision and the homeowner(s) (claimants) rights to internal and external review is to be sent within 5 business days of the receipt of the refusal to accept SecureBuild’s indemnity offer.

Guarantee of Service 12 Homeowner(s) (claimants) to be contacted within 48-hours of a declinature decision being made to explain the reason for the declinature decision.

Guarantee of Service 13 SecureBuild will issue a declinature letter to homeowner(s) (claimants) within 5 business days of the declinature decision being made.

Guarantee of Service 14 SecureBuild’s DRC will conduct an internal review of a decision within 20 business days of receiving a request from the homeowner(s) (claimants).

Guarantee of Service 15 The Chair of the DRC will issue correspondence to homeowner(s) (claimants) setting out the outcome of the internal review and reasons for its determination within 5 business days of the review.


Appendix A Terms & Conditions

Acceptance of the terms and conditions outlined below is required to obtain and retain registration for cover under the Home Building Compensation scheme from SecureBuild Australia Pty Ltd (SecureBuild). Any breaches of these terms and conditions may result in de-registration, a change in profile and risk rating and/or legal action to recover any losses incurred by SecureBuild. 1. Licensing 1.1 Builders and contractors registered with SecureBuild (Registered Contractor) must hold a current NSW Fair Trading contractor licence for the duration of the period of registration. 1.2 The Registered Contractor must ensure that all Registered Contactors are qualified and/or nominated supervisors hold the relevant current contractor licence during the period of registration. 1.3 SecureBuild must be notified immediately of the following:

a) a change to the Registered Contractors license status b) a change to the Registered Contractor’s qualified or nominated supervisors licence status c) early termination of the contract for any reason d) any disciplinary action being taken by NSW Fair Trading, or other regulatory body, that may impact on the licensing status

of the Registered Contractor e) any dispute between the Registered Contractor and the owner where a complaint has been made to NSW Fair Trading f) when a claim has been lodged against the Registered Contractor in the NSW Civil and Administrative Tribunal (NCAT) or

any other Court or Tribunal. 2. Financial 2.1 SecureBuild is to be immediately notified if the Net Tangible Asset (NTA) position of the Registered Contractor’s business changes by more than 30% from the position lodged with SecureBuild at the time of application for registration. 2.2 The Registered Contractor must not exceed their maximum turnover level by more than twenty (20) %. 2.3 If requested by SecureBuild, SecureBuild will be given reasonable access to, or be provided with financial documents and information of the Registered Contractor’s business for the purposes of assessing the financial viability of the Registered Contractor. 3. Contracting 3.1 If requested by SecureBuild, prior to execution of a building contract, or at any time throughout the building work, the Registered Contractor shall provide SecureBuild with the documents relating to the building work, including but not limited to, contract, estimates, quotations, plans and specifications, 3.2 SecureBuild is entitled to at its discretion, refuse to issue a HBCF certificate to any of the Registered Contractor’s proposed clients, however, the issuing of a HBCF certificate shall not be unreasonably refused. 3.3 Progress claim payment amounts (or percentages) set out within the building contract entered between the Registered Contractor and its client are to be the same as those approved by SecureBuild. 3.4 Three of the progress claim payments within contracts for the construction (including renovations and additions) of dwellings are to occur at: • Lock-up pre-lining • Waterproofing • Final. 3.5 Registered Contractors must include in all building contracts requiring a HBCF certificate, the terms and conditions contained in the SecureBuild Special Conditions. Where a Registered Contractor fails to insert the SecureBuild Special Conditions into a building contract, the SecureBuild Special Conditions shall be implied into the contract and takes precedence over any terms in the contract which apply to those conditions. Where a HBCF certificate has been issued, the Registered Contractor agrees to abide by the SecureBuild Special Conditions. 3.6 Registered Contractors must notify SecureBuild of any variations to the building contract which are greater than ten (10) % of the contract price. The Registered Contractor will pay any difference in premiums where the above variation increases the value of the building work insured.


3.7 The Registered Contractor is to provide SecureBuild with the details of any engineer and principal certifying authority (PCA) engaged by the Registered Contractor, or its client, along with copies of a certificate of currency for their professional indemnity insurance policies for the period of engagement. 3.8 In addition to the above, the Registered Contractor is to provide a copy of the following if applicable:

a) Development Consent b) Construction Certificate c) Building Contract, and d) Occupation Certificate, including all the certificates required for provision of the Occupation Certificate.

4. Progress Payments 4.1 No payments are to be demanded or received from the Registered Contractor’s client for Progress Claims without prior approval from SecureBuild’s Building Inspector. 4.2 SecureBuild, may at its discretion, require additional inspections prior to Progress Claim payments. 5. Site Access 5.1 SecureBuild’s Building Inspectors and/or authorised representatives are to be given access, on reasonable notice, to building sites to conduct inspections at any stage of the building work. 5.2 No reasonable request to conduct tests, inspections or inquiries to assist SecureBuild confirm compliance with the building contract, NCC, AS/NZ Standards or any other applicable code, standard or regulation will be refused by the Registered Contractor. 6. Defects and incomplete work 6.1 In addition to any requirement of the building contract, defective or incomplete building work identified by SecureBuild’s Building Inspector during or post construction is to be rectified within timeframes agreed between the Registered Contractor and the inspector. 6.2 The Registered Contractor, or their authorised representative, must be present during inspections undertaken by SecureBuild Building Inspectors where such inspections are mandatory requirements for payment of a Progress Claim. 6.3 The Registered Contractor must pay SecureBuild for any follow-up inspections required for approval of payment of a Progress Claim at a rate of $200 per hour plus GST, or a rate as notified by SecureBuild. 6.4 The Registered Contractor must pay for an inspection and completion of a report on the stage of the work at termination at the above rate, where the Registered Contractor has terminated the contract before the completion of the contract period. 7. Disputes 7.1 The Registered Contractor must make every effort to resolve disputes with the its client quickly and efficiently. 7.2 If the Registered Contractor’s client lodges a dispute complaint with SecureBuild, the Registered Contractor must deal with that dispute quickly and efficiently and cooperate with any reasonable request by SecureBuild in relation to the dispute. 7.3 In circumstances where the Registered Contractor requests SecureBuild’s involvement in assisting to resolve a dispute with their client, or their client is experiencing difficulties in resolving their dispute with the Registered Contractor, SecureBuild will charge a fee to the Registered Contractor covering the cost of the Building Inspector’s involvement at a rate of $200 per hour. Such engagement does not create a legally binding duty to the Registered Contractor to act solely for the Registered Contractor. 8. Use of Information 8.1 The Registered Contractor gives permission to SecureBuild to use the information it collects from the Registered Contractor in SecureBuild’s business operations or to provide such information as required by law to other parties including, the State Insurance Regulatory Authority, other HBCF Providers and the client, subject to the terms of the SecureBuild Privacy Policy or any other applicable privacy laws.


Appendix B Fidelity Fund Contracts (Policies)








Appendix C HBC Claim Form







Appendix D Prescribed Claim Information Required information when lodging a claim:

• The name, address and contact details of the claimant and of each owner of the property that is the subject of the claim • The address of the property that is the subject of the claim • The certificate number or other identifier of the building cover contract, which is the subject of the claim, or a copy of the

certificate for the cover that is the subject of the claim • Whether the claimant believes that the contractor has died, disappeared, become insolvent or any other event which allows

a claim to be lodged (per 6.2) and details of the source of that belief, including all relevant documents obtained by the claimant

• If the claimant became the owner of the property after completion of the work performed by the contractor, evidence of the transfer of title

• Where the claimant contracted directly with the contractor, evidence of the contract between the claimant and the contractor in relation to the work and information about the work performed

• A description of all defective or incomplete work alleged by the claimant together with the date on which it was first observed by the claimant to be defective or incomplete, and

• Details of any prior complaints made or action taken by the claimant in relation to the defective or incomplete work.


Appendix E Letter of Receipt


Appendix F Acceptance Letters Failure to Commence

HOME BUILDING COMPENSATION HBC CLAIM (number)

Dear (Homeowner)

We’re pleased to advise you that SecureBuild has accepted the claim you lodged under your HBC fidelity fund contract (policy) (policy number) on (date).

Following our receipt of your proof of payment of the deposit to your builder/contractor we intend to fully indemnify you for this amount ($ amount).

To accept our offer of indemnification, could you please sign and return the subrogation and release form enclosed with this letter and provide us with your bank account details to facilitate payment direct to your account.

Should you not be satisfied with our offer of indemnification you have the right to:

a) Seek an internal review of our decision by SecureBuild’s Decisions Review Committee (DRC); and/or

b) Lodge an appeal of our decision with the NSW Civil & Administrative Tribunal (NCAT) or the NSW Supreme Court (where your claim involves an amount in excess of $500,000.

You can seek an internal review of the decision made in respect of your claim by completing the review request at www.securebuild.com.au/internalreview

You can lodge an appeal of our decision on line with NCAT at www.ncat.nsw.gov.au/Pages/apply_to_ncat/apply_online.aspx

Should you believe that our management of your claim did not comply with the NSW Home Building Act 1989, Regulation or Guidelines you may seek a regulator compliance review by the State Insurance Regulatory Authority (SIRA) by going to: www.sira.nsw.gov.au/complaints

If you have any questions, please do not hesitate to contact our claims team on 13 33 14.

Yours sincerely,

SecureBuild Claims Management Team (Date)

http://www.ncat.nsw.gov.au/Pages/apply_to_ncat/apply_online.aspx

http://www.sira.nsw.gov.au/complaints


Acceptance Letters Failure to Complete


Dear (Homeowner)

We’re pleased to advise you that SecureBuild has accepted the claim you lodged under your HBC fidelity fund contract (policy) (policy number) on (date) and is moving forward to assess the loss you have suffered.

The next step in the process involves us carrying out an inspection that will assist us in assessing the quantum (or amount) of the loss you have suffered as a result of the incomplete and/or defective work of your builder/contractor.

A SecureBuild Building Inspector will contact you in the next 48 hours to organise a time to access your home or building site to carry out this inspection.

We know that this is a very stressful time for you and we’ll endeavour to complete this inspections assessment within 10 business days.

Following this inspection, SecureBuild will obtain quotes from builders/contractors on its builder rectification panel and select the most appropriate quote received.

We will come back to you at this time to advise you of our offer of indemnification.

Should you accept this offer you will enter into a contract with the builder selected and they will rectify the defects and/or incomplete work identified by us and this work will be paid for by SecureBuild in settlement of your claim.

From that point onward, you will continue to pay the rectifying builder to complete your home in accordance with the contract you enter into with the rectifying builder.

You can find more information regarding how we will manage your claim on our website at: www.securebuild.com.au/claims

In the interim, if you have any questions or concerns, please do not hesitate to contact our claims team on 13 33 14.

Yours sincerely,


http://www.securebuild.com.au/claims


Acceptance Letters Warranty Period


Dear (Homeowner)

We’re pleased to advise you that SecureBuild has accepted the claim you lodged under your HBC fidelity fund contract (policy) (policy number) on (date) and is moving forward to assess the loss you have suffered.

The next step in the process involves us carrying out an inspection that will assist us in assessing the quantum (or amount) of the loss you have suffered as a result of defective work of your builder/contractor.

A SecureBuild Building Inspector will contact you in the next 48 hours to organise a time to access your home or building site to carry out this inspection.

We know that this is a very stressful time for you and we’ll endeavour to complete this inspections assessment within 10 business days.

Following this inspection, SecureBuild will obtain quotes from builders/contractors on its builder rectification panel and select the most appropriate quote received.

We will then come back to you at this time to advise you of our offer of indemnification.

Should you accept this offer, you will need to enter into a contract with the builder selected and they will rectify the defects identified by us and this work will be paid for by SecureBuild in settlement of your claim.

You can find more information regarding how we will manage your claim on our website at: www.securebuild.com.au/claims

In the interim, if you have any questions or concerns, please do not hesitate to contact our claims team on 13 33 14.

Yours sincerely,


http://www.securebuild.com.au/claims


Appendix G Acceptance of Offer, Release and Subrogation Letter





Appendix H Rectifying Builder Panel

Company ABN Licence # Address Suburb Postcode Email Phone - Mobile Phone - WorkBaxter Homes 20 084 042 151 99405C 9/2 Joule Place Tuggerah 2259 craig.baxter@baxterh 0412 381 900Ferris Building Pty Ltd 82 126 196 503 163788C 15 Grainger Street Lambton 2299 [email protected] 0412 719 181Danbuilt Pty Ltd 34 420 122 370 157972C 9 McBrides Lane Inverell 2360 [email protected] 0417 650 210Australian Restoration & Construction P/L 42 169 552 416 291154C 4/14 Distribution Ave Molendinar 4214 [email protected] 1300 728 225Harmony Homes Pty Ltd 99 152 659 722 256793C Suite 21/286 New Line Road Dural 2158 rexr@harmonyhomes 0477 660 114Ausnorth Investments Pty Ltd 15 711 598 112 1245121 27/2-8 Reserve Circuit Murrumba Downs 4503 [email protected] 0438 868 316 1300 287 667David Reid Homes Sapphire Coast 32 556 434 016 12 Sir William McKell Drive Pambula 2549 paulbailey@davidreid 0414 489 259 264957216Locagroup Building & Maintenance Pty Ltd 27 133 489 960 277538C 15 Cross Street Ryde 2112 [email protected] 0419 248 576Hudson Homes Pty Ltd 49 163 189 071 259372C L4 18 Smith Street Parramatta 2150 rob.borg@hudsonhom 0417 065 900Edgeworth Constructions Pty Ltd 47 130 236 172 204959C 4/33 Pendlebury Road Cardiff 2285 [email protected] 0432 595 290Ezy Projects Pty Ltd 34 608 585 351 298387C & 15046119 3/9 Park Road Five Dock 2046 [email protected] 0424 572 430David Reid Homes South Coast & Southern Highlands P/L 28 658 406 156 238534C 294 Princes Highway South Nowra 2540 [email protected] 44227188Rescom Builders Pty Lts 88 026 570 439 235971C 11/378 Parramatta Road Homebush West 2140 [email protected] 0400 300 600 1300954348


Appendix I Indemnity Offer Letters Incomplete Work – Construction Period


Dear (Homeowner)

We’re pleased to advise you that SecureBuild has accepted the claim you lodged under your HBC fidelity fund contract (policy) (policy number) on (date) and has completed an assessment of the loss suffered by you.

Following receipt of quotes from our panel of rectifying builders, we intend to fully indemnify you for the amount ($ amount).

This indemnification amount will be paid to the rectifying builder (name of builder) by SecureBuild who you will enter into a contract with to complete your home.

From that point onward, you will continue to pay the rectifying builder progress claim payments under the contract with them until your home has been completed.

SecureBuild will issue (name of the builder) and you new fidelity fund contracts (policies) that will provide you cover for the work being undertaken by (name of builder) in addition to post construction.

SecureBuild’s building inspector (name of building inspector) will continue to support you through the building process and let you know when to make progress payment to the rectifying builder.

The warranty period policy issued to you by your previous builder still provides you with defect cover for the work completed by that builder.

To accept our offer of indemnification, could you please sign and return the acceptance of offer, release and subrogation form enclosed with this letter.




You can seek an internal review of the decision made in respect of your claim by completing the review request at www.securebuild.com.au/internalreview

You can lodge an appeal of our decision on line with NCAT at www.ncat.nsw.gov.au/Pages/apply_to_ncat/apply_online.aspx

http://www.securebuild.com.au/internalreview



Should you believe that our management of your claim did not comply with the NSW Home Building Act 1989, Regulation or Guidelines you may seek a regulator compliance review by the State Insurance Regulatory Authority (SIRA) by going to: www.sira.nsw.gov.au/complaints


Yours sincerely,




Indemnity Offer Letters Incomplete Work – Warranty Period


Dear (Homeowner)



This indemnification amount will be paid to the rectifying builder (name of builder) by SecureBuild who you will enter into a contract with to rectify the defects to your home.

SecureBuild will issue (name of the builder) and you new fidelity fund contracts (policies) that will provide you cover for the work being undertaken by (name of builder) in addition to post construction.

SecureBuild’s building inspector (name of building inspector) will continue to monitor the rectifying builder’s rectification of the defective work identified by us.

To accept our offer of indemnification, could you please sign and return the acceptance of offer, release and subrogation form enclosed with this letter.




You can seek an internal review of the decision made in respect of your claim by completing the review request at www.securebuild.com.au/internalreview You can lodge an appeal of our decision on line with NCAT at www.ncat.nsw.gov.au/Pages/apply_to_ncat/apply_online.aspx Should you believe that our management of your claim did not comply with the NSW Home Building Act 1989, Regulation or Guidelines you may seek a regulator compliance review by the State Insurance Regulatory Authority (SIRA) by going to: www.sira.nsw.gov.au/complaints If you have any questions, please do not hesitate to contact our claims team on 13 33 14.

Yours sincerely,






Indemnity Offer Letters Incomplete Work – Settlement by Payment


Dear (Homeowner)



We have determined that, given the circumstances, it would be best for us to settle your claim via us making a payment to you.

To accept our offer of indemnification, could you please sign and return the subrogation and release form enclosed with this letter and provide us with your bank account details to facilitate payment direct to your account.




You can seek an internal review of the decision made in respect of your claim by completing the review request at www.securebuild.com.au/internalreview You can lodge an appeal of our decision on line with NCAT at www.ncat.nsw.gov.au/Pages/apply_to_ncat/apply_online.aspx Should you believe that our management of your claim did not comply with the NSW Home Building Act 1989, Regulation or Guidelines you may seek a regulator compliance review by the State Insurance Regulatory Authority (SIRA) by going to: www.sira.nsw.gov.au/complaints If you have any questions, please do not hesitate to contact our claims team on 13 33 14.

Yours sincerely,

SecureBuild Claims Management Team (Date





Appendix J Rejection of Indemnity Offer


Dear (Homeowner)

We write in reference to the claim you lodged under your HBC fidelity fund contract (policy) (policy number) with SecureBuild on (date).

After discussing this matter with you, we understand that you are not satisfied with the indemnity offer made by us

We regret that you are not satisfied with our offer to settle your claim with us. Nevertheless, we would like to advise you of the steps you can now take to seek the outcome that you are after.

You have the right to:



You can seek an internal review of the decision made in respect of your claim by completing the review request at www.securebuild.com.au/internalreview You can lodge an appeal of our decision on line with NCAT at www.ncat.nsw.gov.au/Pages/apply_to_ncat/apply_online.aspx NB: Should you wish to lodge an appeal with NCAT or the NSW Supreme Court, you are advised to do so within 45 days of receiving this letter. Additionally, should you believe that our management of your claim did not comply with the NSW Home Building Act 1989, Regulation or Guidelines you may seek a regulator compliance review by the State Insurance Regulatory Authority (SIRA) by going to: www.sira.nsw.gov.au/complaints If you have any questions, please do not hesitate to contact our claims team on 13 33 14.

Yours sincerely,






Appendix K Decision Letter


Dear (Homeowner)


After discussing this matter with you, we understand that you are not satisfied with the indemnity offer made by us

The reasons for our decision regarding the indemnity offer made to you are as follows:

(delete reasons not applicable)

• The scope of work developed in relation to your claim has been assessed by quantity surveyors and found to be more than adequate to complete or rectify the defects to your home;

• Under the policy there was a substantial delay by you in enforcing your statutory warranty rights which led to a further deterioration of the incomplete or defective work to your home;

• Under the policy there was a substantial delay by you in notifying us of the incomplete work or the defects which led to a further deterioration of the incomplete or defective work to your home;

• Some items set out within your claim where determined by us to be outside the time period applicable (list items and applicable dates);

• Some of the items set out within your claim where determined by us not to be incomplete or defective work under the policy (list items);

• Under the policy you made payments to the builder without being notified by SecureBuild to make such payments.

We regret that you are not satisfied with our offer to settle your claim with us. Nevertheless, we would like to advise you of the steps you can now take to seek the outcome that you are after.

You have the right to:



You can seek an internal review of the decision made in respect of your claim by completing the review request at www.securebuild.com.au/internalreview You can lodge an appeal of our decision on line with NCAT at www.ncat.nsw.gov.au/Pages/apply_to_ncat/apply_online.aspx NB: Should you wish to lodge an appeal with NCAT or the NSW Supreme Court, you are advised to do so within 45 days of receiving this letter. Additionally, should you believe that our management of your claim did not comply with the NSW Home Building Act 1989, Regulation or Guidelines you may seek a regulator compliance review by the State Insurance Regulatory Authority (SIRA) by going to: www.sira.nsw.gov.au/complaints






Yours sincerely,



Appendix L Declinature Letter


Dear (Homeowner)


After fully investigating and assessing your claim, we regret to advise you that we will not be making an indemnity offer to you and have determined to decline you claim.

One of our claims staff has contacted you to explain the reasons for our decision. However, we wish to provide with our reasons in writing in addition to letting you know the steps you can take should you not be satisfied with our decision.

The reasons for our decision to decline your claim as follows: (delete reasons not applicable)

• All of the incomplete or defective work items set out within your claim where determined by us to be outside the time period applicable (list items and applicable dates);

• All of the items set out within your claim where determined by us not to be incomplete or defective work under the policy (list items);

• Under the policy you made payments to the builder without being notified by SecureBuild to make such payments.

• All of the items within your claim are exclusion under the policy issued to you (list exclusions)

Now that you have received formal notification from us regarding our declining of your claim you have the right to: a) Seek an internal review of our decision by SecureBuild’s Decisions Review Committee (DRC); and/or


You can seek an internal review of the decision made in respect of your claim by completing the review request at www.securebuild.com.au/internalreview You can lodge an appeal of our decision on line with NCAT at www.ncat.nsw.gov.au/Pages/apply_to_ncat/apply_online.aspx NB: Should you wish to lodge an appeal with NCAT or the NSW Supreme Court, you are advised to do so within 45 days of receiving this letter. Additionally, should you believe that our management of your claim did not comply with the NSW Home Building Act 1989, Regulation or Guidelines you may seek a regulator compliance review by the State Insurance Regulatory Authority (SIRA) by going to: www.sira.nsw.gov.au/complaints If you have any questions, please do not hesitate to contact our claims team on 13 33 14.

Yours sincerely,

SecureBuild





Claims Management Team (Date)


Appendix M DRC (Internal Review Outcome) Letter

INTERNAL REVIEW OF A SECUREBULD DECISION

Dear (Homeowner)

I write to advise you of the outcome of an internal review conducted by the Decision Review Committee (DRC) of SecureBuild in relation to a complaint lodged by you on (date).

The DRC who conducted a review of SecureBuild’s original decision in relation to your complaint is comprised of: The Chief Executive Office of SecureBuild; and The Executive Manager, Risk Management & Claims; and An independent industry representative from the Master Builders Association of NSW.

After fully considering the material provided to the committee together with the additional information provided by you, the committee has determined: (delete selections not applicable)

• To overturn the original decision made by SecureBuild; • To amend the original decision made by SecureBuild (insert details); • To uphold the original decision made by SecureBuild.

I understand that someone from SecureBuild’s has contacted you to explain the reasons for our decision. However, we wish to provide you with our reasons in writing in addition to letting you know the steps you can take should you not be satisfied with our decision. The reasons for our review determination was that the original decision was (or was not) in keeping with SecureBuild’s policies and procedures approved by SIRA. (Overturning or amending the original decision) The determination made by the DRC is binding on SecureBuild. Accordingly, you can expect to hear from them in the near future regarding the altering of the original decision. (Upholding the decision) Should you believe that SecureBuild’s has not complied with the NSW Home Building Act 1989, Regulation or Guidelines in making the decision it has you may seek a regulator compliance review by the State Insurance Regulatory Authority (SIRA) by going to: www.sira.nsw.gov.au/complaints We thank you for bringing this matter to our attention and it is our hope that your complaint will improve the quality of our products and services

Yours sincerely,

SecureBuild Chair Decisions Review Committee (Date)


Appendix N SecureBuild specific contract clause SecureBuild Special Conditions Progress Payments and Inspections 1) The provisions contained in this section, where applicable, take precedence over the other provisions of the contract pertaining to

payments to the builder by the owner where both parties agree on the following terms.

2) As a condition precedent for the provision of a Home Building Compensation Certificate to the owner, the Home Building Compensation Fund provider (SecureBuild) will be entitled to independently monitor the progress of the work under this contract and have access to the owner’s property: a) For the purpose of assessing progress claims identified below as mandatory inspections; or b) any time on reasonable notice; or c) When requested by either party to inspect the work.

3) Mandatory inspections are required at the following stages:

a) Lock-up pre-lining; b) Waterproofing; and c) Final.

4) If the builder requires a progress payment for works undertaken for a mandatory inspection, then the contract must provide for

progress claims to align with the mandatory inspections.

5) The builder must provide the SecureBuild building inspector with at least 48 hours’ notice of the requirement to attend for the purpose of a mandatory inspection.

6) The contract may, by agreement of the parties, provide for progress claims other than those required for mandatory inspections. Such other progress claim payments must be approved by the SecureBuild building inspector and must comply with the percentage rates as notified by SecureBuild.

7) The parties agree that any progress claim payment, whether requiring a mandatory inspection or not, will not be paid by the owner until approval for payment is provided to the owner by the SecureBuild building inspector.

8) Notwithstanding any other provision of this contract, the parties agree that if a SecureBuild building inspector notifies the owner not to pay a progress claim until further work is completed, or defective building work is rectified, then non-payment of the progress claim will not be a breach of the contract.

9) The owner must pay the progress claim to the builder within 5 business days from the date of approval by the SecureBuild building inspector, or such time as agreed by the parties and the SecureBuild building inspector.

10) Payment of a progress claim by the owner without prior notification of approval by the SecureBuild building inspector may prejudice the rights of the owner under the SecureBuild policy.

11) The parties agree to pay SecureBuild the fee for any inspection undertaken by the SecureBuild building inspector other than the mandatory inspections, at a rate of two hundred dollars ($200) per hour plus GST. The party requesting the inspection will be liable for the fee payable for the inspection unless otherwise agreed.

The owner may engage SecureBuild to arrange inspections for the purpose of the assessment of progress claims other than the mandatory inspection progress claims. Such inspections will be paid for by the owner at the rate of two hundred dollars ($200) per hour plus GST. Disputes 1) The parties may request, by agreement or otherwise, the engagement of the SecureBuild building inspector for the purposes of

informally resolving a dispute in relation to the work under the contract.

2) The engagement of the SecureBuild building inspector under this section, does not create a legally binding or confidential agreement with either or both parties for the purposes of the dispute, any future dispute or any other action that arises from a dispute under the contract or any other applicable law.

3) The parties agree to pay SecureBuild a fee for the engagement of the SecureBuild building inspector under this section, at a rate of two hundred dollars ($200) per hour plus GST.


Appendix 0 Home Building Act 1989 - Key Definitions Adjusted Net Tangible Assets (ANTA) relates to the Net Asset position of an entity adjusted for discounting applied to arrive at Net Tangible Asset position. Not all balance sheet values are adopted at face value; examples include the discounting of goodwill and related party loan assets. Discount factors are not publicly available.to the builder by the owner where both parties agree on the following terms. Builder is synonymous with contractor for the purposes of this guideline. Residential building work means any endeavour that involves the co-ordination and supervision involved in any work related to:

a) The construction of a dwelling, or b) The making of alterations or additions to a dwelling, or c) The repairing, renovation, decoration or protective treatment of a dwelling.

It includes roof plumbing and specialist work done in connection with a dwelling and work concerned in installing a prescribed fixture or apparatus in a dwelling under clause 8 of the Home Building Regulation 2004 (or in adding to, altering or repairing any such installation). It does not include work that is declared by the regulations to be excluded from this definition – refer to clause 9 of the Home Building Regulation 2004 and below table. (Section 3(1) Home Building Act 1989)


Residential Building Work fixtures and apparatus included (Clause 9 Home Building Regulation 2004)

Residential Building Work work excluded (Clause 9 Home Building Regulation 2004)

For the purposes of the definition of residential building work in section 3(1) of the Home Building Act 1989, any fixture or fixed apparatus designed for the heating or cooling of water, food or the atmosphere or for air ventilation or the filtration of water in a swimming pool.

For the purposes of the definition of residential building work in section 3(1) of the Home Building Act 1989, the following is declared to be excluded from that definition:

a) Any work (other than specialist work) the reasonable market cost of the labour and materials involved in which does not exceed $1,000 (inclusive of GST).

b) Any work (other than specialist work) involved in the manufacturing of moveable dwellings, within the meaning of the Local Government Act 1993 (other than moveable dwellings that are manufactured homes, within the meaning of that Act),

c) Any work (other than specialist work) involved in the site preparation for, or the assembling or erection on site of, moveable dwellings excluded by paragraph (b), unless the work requires development consent.

d) Any work referred to in paragraph (c) done in relation to land on which a council has authorised a moveable dwelling to be placed by issuing an approval under the Local Government Act 1993, whether or not a development consent is also required.

e) Any work that would otherwise be residential building work but which, by or under an Act (other than the Home Building Act 1989) a person is prohibited from being done unless the person is the holder of a contractor licence or another authority under that other Act (refer below note).

f) Any work (other than specialist work) done in relation to the removal and transport of a dwelling (refer below note), the supervision only of residential building work: • by a person registered as an architect under the Architects Act 1921 or the Architects Act 2003, or • by a person supervising owner-builder work for no reward or other consideration, or • by any other person, if all the residential building work is being done or supervised by the holder of a contractor licence authorising its holder to contract to do that work,

g) Demolition work - any work involved in the installation of any material that forms an upper layer or wearing surface of a floor (even if installed as a fixture) that does not include any structural changes to the floor,

h) Any work that involves the installation or maintenance of any fixed apparatus such as a lift, an escalator, an inclinator or a garage door by means of which persons or things are raised or lowered or moved in some direction that is restricted by fixed guides.

i) Work referred to in (e) is not excluded from the definition of residential building work if it is part only of the work to be done under a contract to do residential building work.

Work referred to in (f) is not excluded from the definition of residential building work, if it is part only of the work to be done under a contract to do residential building work at the new site of the dwelling (whether or not that work is done under the same contract as the contract to remove and transport the dwelling).


Dwelling means a building or portion of a building that is designed, constructed or adapted for use as a residence (such as a detached or semi-detached house, transportable house, terrace or town house, duplex, villa-home, strata or company title home unit or apartment). It includes any swimming pool or spa constructed for use in conjunction with a dwelling and such additional structures and improvements as are declared by clause 5 of the Home Building Regulation 2004 to form part of a dwelling. It does not include buildings or portions of buildings declared by clause 6 of the Home Building Regulation 2004 to be excluded from this definition – refer to the following table. (Section 3(1) Home Building Act 1989).

Dwellings structures & improvements included (Clause 5 Home Building Regulation 2004)

Dwelling buildings & structures excluded (Clause 6 Home Building Regulation 2004)

For the purposes of the definition of dwelling in section 3(1) of the Home Building Act 1989, the following structures and improvements are declared to form part of the dwelling when involved in joint construction.

• Parts of a building containing more than one dwelling (whether or not the building is also used for non-residential purposes), being stairways, passageways, rooms, and the like that are used in common by the occupants of those dwellings; together with any pipes, wires, cables or ducts that are not for the exclusive enjoyment of any one dwelling,

• Parts of a building containing one dwelling only (where the building is also used for non-residential purposes), being stairways, passageways and the like which provide access to that dwelling,

• If non-residential parts of a building containing one or more dwellings, provide support or access to the residential part, these structural elements are regarded as part of the dwelling.

• Cupboards, vanity units and the like fixed to a dwelling

• Detached garages and carports • Detached decks, porches, verandas, pergolas and

the like • Cabanas and non-habitable shelters • Detached workshops, sheds and other outbuildings

(but not jetties, slipways, pontoons or boat ramps and any structures ancillary to these exceptions)

• Concrete tennis courts and the like • Driveways, paths and other paving • Retaining walls • Agricultural drainage designed or constructed to

divert water away from the footings of a dwelling or a retaining wall

• Fences and gates • Ornamental ponds and water features, and other

structural ornamentation, the construction or installation of which requires development consent.

For the purposes of the definition of dwelling in section 3(1) of the Home Building Act 1989, the following are declared to be excluded from that definition:

a) A boarding house, guest house, hostel or lodging house

b) All residential parts of a hotel or motel c) Any residential part of an educational institution d) Accommodation (other than self-contained units)

specially designed for the aged, disabled or children e) Any residential part of a health care building that

accommodates staff f) A house or unit designed, constructed or adapted

for commercial use as tourist, holiday or overnight accommodation

g) Any part of a non-residential building that is constructed or adapted for use as a caretaker’s residence

h) A moveable dwelling (with or without a flexible annex) within the meaning of the Local Government Act 1993, that is, or is capable of being, registered under the Road Transport (Vehicle Registration) Act 1997 (such as a caravan or a motor home)

A Residential building for the purposes of which development consent can be granted only because of State Environmental Planning Policy No 15—Multiple Occupancy of Rural Land.


Contractor means a person (being a licensed builder or licensed trade contractor) required by section 92 of the Home Building Act 1989 to enter into a contract of insurance. It is synonymous with Builder for the purposes of this guideline (Section 90(1) Home Building Act 1989. ‘Date of completion’ of residential building work means: 1) The completion of residential building work occurs on the date that the work is complete within the meaning of the contract

under which the work was done. 2) If the contract does not provide for when work is complete (or there is no contract), the completion of residential building work

occurs on practical completion of the work, which is when the work is completed except for any omissions or defects that do not prevent the work from being reasonably capable of being used for its intended purpose.

3) It is to be presumed (unless an earlier date for practical completion can be established) that practical completion of residential building work occurred on the earliest of whichever of the following dates can be established for the work: a) The date on which the contractor handed over possession of the work to the owner. b) The date on which the contractor last attended the site to carry out work (other than work to remedy any defect that does

not affect practical completion). c) The date of issue of an occupation certificate under the Environmental Planning and Assessment Act 1979 that authorises

commencement of the use or occupation of the work. d) (In the case of the owner-builder work) the date that is 18 months after the issue of the owner-builder permit for the work.

4) If residential building work comprises the construction of 2 or more buildings each of which is reasonably capable of being used and occupied separately, practical completion of the individual buildings can occur at different times (so that practical completion of any one building does not require practical completion of all the buildings).

5) This section applies for the purposes of determining when completion of residential building work occurs for the purposes of any provision of this Act, the regulations or a contract of insurance.

(Section 3B Home Building Act 1989) Developer means in relation to residential building work, an individual, partnership or corporation (other than a company referred to in section 3A (3) of the Home Building Act 1989) on whose behalf the work is done in the circumstances set out in section 3A (2) of the Act. (Section 90(1) Home Building Act 1989) Section 3A of the Home Building Act provides: (1) For the purposes of this Act, an individual, a partnership or a corporation on whose behalf residential building work is done in the circumstances set out in subsection (2) is a developer in relation to that residential building work. (1A) Residential building work done on land in the circumstances set out in subsection (2) is, for the purpose of determining who is a developer in relation to the work, deemed to have been done on behalf of the owner of the land (in addition to any person on whose behalf the work was actually done). Note. This makes the owner of the land a developer even if the work is actually done on behalf of another person (for example, on behalf of a party to a joint venture agreement with the owner for the development of the land). The other person on whose behalf the work is actually done is also a developer in relation to the work. (2) The circumstances are:

a) The residential building work is done in connection with an existing or proposed dwelling in a building or residential development where 4 or more of the existing or proposed dwellings are or will be owned by the individual, partnership or corporation.

b) The residential building where work is done in connection with an existing or proposed retirement village or accommodation specially designed for the disabled where all of the residential units are or will be owned by the individual, partnership or corporation.

(3) A company that owns a building under a company title scheme is not a developer for the purposes of this Act. Disappearance of a builder or owner-builder includes a reference to the fact that, after due search and inquiry, the builder or owner-builder cannot be found. (Section 90(2) Home Building Act 1989) Home building compensation means insurance under a contract of insurance required to be entered into by or under Part 6 of the Home Building Act 1989. (Section 90(1) Home Building Act 1989)

Insolvent means:

• in relation to an individual, that the individual is insolvent under administration (within the meaning of the Corporations Act 2001 of the Commonwealth), or

• in relation to a corporation, that the corporation is an externally administered body corporate (within the meaning of the Corporations Act 2001 of the Commonwealth)

(Section 90(1) Home Building Act 1989)


Insolvency includes where the licence of a builder has been suspended (under section 42A of the Home Building Act 1989) for failure to comply with a monetary order of the NSW Civil and Administrative Tribunal (NCAT) or a court (not applicable to owner-builders). (Section 99(3) Home Building Act 1989)

Key managers consist of directors of companies, partners in partnerships and proprietors of sole trader operations. In most building entities, particularly small builders, the nominated supervisor is also deemed a key manager, particularly where directors/partners, in their own right, have insufficient experience to support the requested project limits.

Major risk management issue means that the outcome of a risk management investigation by the insurance agent determines that there has been a significant change, such that the risk to HBCF for that builder has materially increased or a risk management investigation has not been resolved within one (1) month of identification then the issue is escalated to a major risk management issue.

Minimum Eligibility requirements means:

• Possessing a builder’s licence or the intention to obtain one, and • having the experience required for the requested annual turn-over and construction limit, and • Satisfying business registration, ABN requirements, and • Having positive net tangible assets in the business or through securities available to be charged, and • Not being an undischarged bankrupt or being otherwise insolvent.

Multi-storey building means a building that has a rise in storeys of more than three, and that contains two or more separate dwellings.

• Rise in storeys has the same meaning as it has in the Building Code of Australia. • Storey does not include a space within a building if the space includes accommodation only intended for vehicles.

(Clause 74(5) Home Building Regulation 2004)

Non-contracting owner, in relation to a contract to do residential building work on land means an individual, partnership or corporation that is the owner of the land but is not a party to the contract and includes any successor in title to the owner. (Section 3(1) Home Building Act 1989)

Owner of land means the only person who, or each person who jointly or severally, at law or in equity:

a) Is entitled to the land for an estate of freehold in possession, or b) Is entitled to receive, or receives; or if the land were let to a tenant would be entitled to receive the rents and profits of the

land, whether as beneficial owner, trustee, mortgagee in possession or otherwise. (Section 3(1) Home Building Act 1989)

Owner-builder means a person who does owner-builder work and who is issued an owner-builder permit for that work. (Section 3(1) Home Building Act 1989) Owner-builder work means owner-builder work within the meaning of section 29 of the Home Building Act 1989 that involves:

a) The construction of a dwelling, or b) The alteration of, or additions to, a dwelling, or c) The construction of an in-ground swimming pool.

(Section 90(1) Home Building Act 1989.)

Owner-builder work means owner-builder work within the meaning of section 29 of the Home Building Act 1989that involves:

a) The construction of a dwelling, or b) The alteration of, or additions to, a dwelling, or c) The construction of an in-ground swimming pool.

(Section 90(1) Home Building Act 1989.)

Section 29 of the Home Building Act 1989 and clause 45 Home Building Regulation 2004 provides: Owner-builder work is any work (including supervision and co-ordination) involved in the construction of, or alterations, repairs or additions to, a dwelling (which includes a house, terrace, town-house, garage, swimming pool and certain other structures and improvements): 1) Where the reasonable market cost (including labour and materials) exceeds $5,000, and 2) Which relates to a single dwelling or dual occupancy:

a) That requires development consent under Part 4 of the Environmental Planning and Assessment Act 1979, or b) That is a complying development within the meaning of that Act.

Past insolvent/s means for the purposes of assessing an application by a builder for eligibility or reviewing a builder’s eligibility:’


1) A corporation that was an “externally administered body corporate’ within the meaning of the Corporations Act 2001 (Cth)

namely, a corporate: a) That is being wound up; b) In respect of property of which a receiver, or a receiver and manager, has been appointed (whether or not by a court) and is

acting; c) That is under administration; d) That has executed a deed of company arrangement that has not yet terminated; or e) That has entered into a compromise or arrangement with another person the administration of which has not been

concluded. f) An individual who was “insolvent under administration” within the meaning of the Corporations Act 2001 (Cth) namely, a

person who: g) Under the Bankruptcy Act 1966 or the law of an external Territory, is a bankrupt in respect of a bankruptcy from which the

person has not been discharged; h) Under the law of an external Territory or the law of a foreign country, has the status of an undischarged bankrupt;

2) and includes: a) A person, whose property or part thereof is subject to control under: b) Section 50 or Division 2 of Part X of the Bankruptcy Act 1966; or c) A corresponding provision of the law of an external Territory or the law of a foreign country; or d) A person who has executed a personal insolvency agreement under Part X of the Bankruptcy Act 1966; or e) The corresponding provisions of the law of an external Territory or the law of a foreign country; where the terms of the

agreement have not been fully complied with.

Associates of past insolvents for these purposes would include a person who has been a director of, or otherwise in a position of influence over, or has taken part in the management of a corporation described above. Specialist work means:

a) Plumbing work (other than work declared by the regulations to be roof plumbing work), or b) Gasfitting work, or c) Electrical wiring work, or d) Any work declared by the regulations to be refrigeration work or air-conditioning work. (Section 3(1) Home Building Act

1989)

Structural defect means any defect in a structural element of a building that is attributable to defective design, defective or faulty workmanship or defective materials (or any combination of these) and that:

a) Results in, or is likely to result in, the building or any part of the building being required by or under any law to be closed or prohibited from being used, or

b) Prevents, or is likely to prevent, the continued practical use of the building or any part of the building, or c) Results in, or is likely to result in:

(i) the destruction of the building or any part of the building, or (ii) physical damage to the building or any part of the building, or

d) Results in, or is likely to result in, a threat of imminent collapse that may reasonably be considered to cause destruction of the building or physical damage to the building or any part of the building. (Clause 71(1) Home Building Regulation 2004)

Structural element of a building means:

a) Any internal or external load-bearing component of the building that is essential to the stability of the building or any part of it, including things such as foundations, floors, walls, roofs, columns and beams, and

b) Any component (including weatherproofing) that forms part of the external walls or roof of the building. (Clause 71(2) Home Building Regulation 2004

Work In Progress Projects commenced but not completed.

Documents

Claims Management Policy - SecureBuild · management process to make it simpler and easier for homeowners to lodge a claim, receive relief under their policy and quick ly move forward