Building industry gives cautious backing to return of home warranty insurance

Moves to reintroduce home warranty insurance in Tasmania – the only state without such a scheme – have been cautiously welcomed by the industry, but calls remain for a comprehensive inquiry.

A PLAN to reintroduce home builder warranty insurance in Tasmania has been welcomed by builders, but Labor still wants an inquiry into better protections for homeowners.

Master Builders Tasmania executive director Matthew Pollock said he was encouraged the government was looking into home builder warranty insurance that would cover some gaps in protections for consumers.

Tasmania is the only state without home builder warranty insurance.

“There are some gaps, particularly for new home buyers, that can leave them exposed,” Mr Pollock said.

“We would support some form of insurance scheme but we would be cautious about how any scheme would be structured.

“We don’t want a scheme that adds significant costs given the price rises we’re seeing for materials for builders.”

Master Builders Association CEO Matthew Pollock. Picture: Mireille Merlet

Mr Pollock’s comments follow news revealed in Monday’s Mercury that a cloud hangs over the future of Hotondo Homes with speculation that the business had closed. Mr Pollock said he believed the company’s Hobart operations had shut two weeks ago.

Consumer Affairs Minister Elise Archer said home warranty insurance covered incomplete or defective building work in the event that a builder died, disappeared or became insolvent.

“This is a sensible measure to assist consumers … where this occurs,” she said.

Ms Archer said a model would be developed after consultation with industry and consumer stakeholders and engagement with the insurance industry.

“The government recognises that building a home is the most significant investment many Tasmanians make, and this will ensure there are appropriate measures in place to protect consumers for the small percentage of building projects where things go significantly wrong,” she said.

Consumer Affairs Minister Elise Archer. Picture: Nikki Davis-Jones

Labor’s building spokeswoman Jen Butler said just weeks after rejecting Labor’s call for an inquiry into better protections for the building industry and homeowners, Ms Archer “has finally admitted there is a problem”.

“Since raising this crucial issue, widespread problems have been brought to light and the introduction of home warranty insurance addresses some of these,” she said.

“However, it won’t provide any relief for the hundreds of Tasmanian home builders who have already been stung by this government’s lack of protection.

“Ms Archer must now go the extra step and support Labor’s call to future proof our building industry and better protect both builders and consumers.”

Mr Pollock said he was not sure an inquiry would not fix the problems.

However, he said a better dispute resolution mechanism outside of the courts was needed for builders and consumers.

“We need an independent third party to look at complaints as has been introduced in other states,” Mr Pollock said.

Originally published as Building industry gives cautious backing to return of home warranty insurance