NSW building companies were profiled using data-matching. Nearly half had a problem

Nearly half the building and renovation companies examined in the first stage of a NSW government crackdown were found to be operating without insurance, although all have so far escaped punishment.

The first compliance review of the state’s home building compensation scheme found widespread non-compliance among targeted builders who were profiled using departmental data. Companies overseeing 327 houses, granny flats and duplexes were operating without insurance.

The NSW government is changing planning laws to tackle the acute and growing housing crisis.Credit: Louie Douvis

The revelation comes as the Minns government embarks on an ambitious reform of planning laws to tackle the state’s acute and growing housing crisis.

The compliance audit is part of the state government’s review of the Home Building Compensation Fund, established by the previous Coalition government to provide home owners with a safety net if their builder dies, disappears, or has their licence suspended for ignoring an order to provide compensation.

Respected legal and consulting figure Bronwyn Weir is leading the State Insurance Regulatory Authority’s review of the fund. It is seeking to determine whether the fund’s maximum payout, $340,000 (established a decade ago), is enough coverage for home owners after inflationary pressures pushed building costs up by 60 per cent in the same time.

Bronwyn Weir is leading the review.Credit: Dominic Lorrimer

The SIRA review used data-matching from the Building Commission and icare’s Home Building Compensation Fund records to create a profile of potentially non-compliant builders among the 178,000 with licences in NSW.

Of the 68 home building and renovation businesses initially audited by SIRA, 43 per cent were identified as operating without insurance. A separate review of 10 pool builders completed earlier in 2024 found one without the required coverage.

All the non-compliant businesses were issued with warnings, but so far none have faced punishment.

“All of the identified businesses and projects are now insured,” a SIRA spokesman said.

The findings come as the Minns government grapples with ensuring delivery of the state’s commitments under the National Housing Accord – requiring the construction 76,000 dwellings each year until July 2029 – is matched by sufficient quality.

Late last year, the Building Commission’s powers were broadened, bringing freestanding homes into the remit of the regulator, as part of a suite of measures aimed at ensuring building standards.

The commission has faced criticism from affected clients of the embattled ANSA Homes. The Edmondson Park-based building company’s licence was suspended for 60 days in late June, leaving dozens of financially stricken home owners in limbo.

Several who spoke to the Herald on the condition of anonymity expressed dismay at the lack of protection offered under the HBCF, noting the fund’s limited coverage and that they were not covered under the scheme until ANSA Homes’ licence was cancelled and collapsed into administration.

In May, Hemisphere Constructions director George Khouzame pleaded guilty to nine offences relating to using an unlicensed contractor and the fraudulent lodging of insurance applications on three different worksites.

George Khouzame, the director of Hemisphere Constructions, was responsible for the Condell Park house collapse. But he hasn’t been charged over it.

One offence involved understating the value of building projects on insurance applications, claiming in his Home Building Warranty Insurance that a Macquarie Fields dual occupancy construction project valued at $900,000 was only worth $520,000.

Customer Service and Digital Government Minister Jihad Dib said: “Now that I have taken carriage of the State Insurance Regulatory Authority, I look forward to seeing the outcomes of this review progress and delivering a better scheme for people building a home or renovating.”

Building Minister Anoulack Chanthivong said the review was another opportunity to lift standards in the construction sector, ensuring the delivery of high-quality homes.

“Last year, we set up Building Commission NSW and gave it the power it needs to stop bad building work in its tracks. Now, we’re getting on with action to give mum and dad builders and renovators confidence that they are protected if the worst should happen,” he said.

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