ACT regulator says Sublime Constructions clients not eligible for cover

Tanya Nguyen of Wright, front, with other people effected by the Sublime Constructions collapse in February. Photo: Melissa Adams

The only way prospective buyers of recently constructed homes in the ACT can be sure a property is covered for structural and other defects is by demanding to see the original contract between the commissioning owner and the builder and the home warranty insurance certificate.

The warranty insurance covers homeowners against structural defects up to six years after a certificate of occupancy is issued and other defects for up to two years.

It also protects customers in the event their builder goes bust, dies or disappears before the project is completed.

Planning Minister, Mick Gentleman, has told Fairfax it is not the responsibility of private certifiers or the Constructions Occupations Registrar to verify the information provided to them for the issuing of commencement certificates and certificates of occupancy which are accepted as proof valid warranty insurance is in place.

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Jerry Howard, the deputy executive director of the ACT Master Builders, disagrees saying "there is an expectation on the part of the consumer that the ACT Government regulator will do its job properly".

"The Constructions Occupations Registrar and the certifier (dealing with the project) need to cross reference the insurance certificate with the building contract," he said. "Under no circumstances should a commencement notice be issued unless the certifier and the regulator are absolutely convinced the build is covered by valid home warranty insurance."

Fairfax is aware of at least six former clients of failed builder Sublime Constructions who have been refused coverage under their home warranty insurance policies because QBE, the insurer, claimed the entity that took out the cover, Sublime Builders, was not the entity that actually built their homes.

"Accordingly your claim is denied as you are ineligible to claim due to the builder not being dead, disappeared or insolvent," QBE's Nick Nithiananthan wrote in a letter to one of the Sublime Constructions victims, Tanya Nguyen, in a letter dated August 15.

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ACT regulator says Sublime Constructions clients not eligible for cover