Home indemnity insurance
Owner-builders are responsible for the building work carried out for a minimum of six years. If the owner-builder sells the home within seven years from the date of a building licence or permit being issued, they are required under the Home Building Contracts Act 1991 to have in place a policy of home indemnity insurance that covers subsequent owners if problems with the building develop and the owner-builder fails to rectify faulty or unsatisfactory workmanship due to disappearance, death or insolvency.
The home indemnity insurance policy must cover the purchaser of the home and subsequent owners for the remainder of the seven year period.
All residential building work valued over $20,000 must be covered by home indemnity insurance, however home indemnity insurance is not required for 'associated work', such as building only a pergola, fence or swimming pool.
Home indemnity insurance can be obtained by contacting an approved insurance provider.