Services > Building and Construction Law > Queensland Home Warranty Scheme

Queensland Home Warranty Scheme

What is the Queensland Home Warranty Scheme?

The Queensland Home Warranty Scheme is a statutory insurance scheme that provides insurance cover for certain residential construction work valued at more than $3,300. Its purpose is to provide protection for consumers in circumstances of non-completion, defective construction, subsidence or settlement.

The scheme is currently administered by the Queensland Building and Construction Commission (QBCC).

What works are covered?

The Queensland Home Warranty Scheme covers ‘residential construction work’ as outlined in the Queensland Building and Construction Commission Act 1991 (the Act) and the Queensland Building and Construction Commission Regulation 2003.

When are premiums payable?

A policy of insurance for residential construction work must be taken out, by either the licensed contractor or the construction manager, as soon as practicable after a contract for work has been entered into.

The premium payable is based on the value of the contract. When the QBCC accepts the appropriate insurance premium in respect of residential construction work, it must issue a certificate of insurance in respect of the residential construction work.  The certificate is evidence that the contracted works are covered by the scheme.

When does the policy of insurance come into force?

The policy of insurance comes into force on the earliest of the following:

  • When a licensed contractor pays the appropriate insurance premium for the work.
  • On the date a contract between a building contractor and a consumer is entered into for the work.
  • When a building contractor commences the work.

How do I make a claim?

A homeowner seeking to make a claim under the Queensland Home Warranty Scheme must give the QBCC notice of the claim in accordance with the regulations. This means that a homeowner can make a claim on the insurance scheme by completing a Complaint Form and submitting the completed form to the QBCC.

What if I am served with a direction to rectify?

If the QBCC is of the opinion that building work is defective, it may direct the person who carried out the building work to rectify the building work within the period stated in the direction.

If you receive a direction to rectify, it is imperative that you comply with the direction or apply for a review within the 28 days. If you have received a direction to rectify and you were not the person who carried out the building work in question, you can challenge the validity of the direction notice.

Given the limited timeframe imposed by the QBCC in attending to a direction to rectify, it is important that you attend the initial site inspection, so that you can discuss the defects identified with the QBCC building inspector and home owner. This allows all parties to have an understanding of what is required.

What if the defective work was the fault of a subcontractor?

You should immediately alert the QBCC if the defective work was the fault of a subcontractor, so that they can also pursue the subcontractor. A direction to rectify may be given to more than one person for the same building work; however, notification to the QBCC will not absolve you of the obligations as set out in the direction to rectify.

I did work for a developer. Does it matter if a subsequent purchaser makes a complaint about my work?

No, it does not matter if a subsequent purchaser of residential construction work makes a complaint about your work. The legislation expressly states that nothing will affect the right of a subsequent owner of residential construction work to claim indemnity under the statutory insurance scheme. The right of a subsequent purchaser to make a claim is also covered in the insurance policy conditions.

What if I am served with a scope of work?

In the event that you fail to attend to rectification, the QBCC will transfer the complaint to their insurance division who will issue a scope of work to be undertaken. Similar to any direction to rectify, you will then have 28 days from issue of the notice to apply to the Queensland Civil and Administrative Tribunal (QCAT) for a review of the QBCC’s decision.

Payment on a claim under the Queensland Home Warranty Scheme

If you fail to comply with the direction to rectify and rectification work is required, the QBCC will usually seek tenders for carrying out the work. The QBCC (via a claims assessment) may approve a tender for a scope of works for which the owner then engages the rectifying builder under a domestic building contract.

Upon completion of the rectification works, the QBCC makes the payment under the Queensland Home Warranty Scheme and then proceeds to recover the payment against the builder. Section 71(1) of the Act enables the QBCC to recover any payment on a claim under the Queensland Home Warranty Scheme, as a debt, from the building contractor whom the relevant residential construction work was, or was to be, carried out or any other person through whose fault the claim arose.

Sections 111C (3) and (6) of the Act attaches the liability of the company to an individual who was a director of the building company when the building work, the subject of the claim was, or was to have been, carried out and/or an individual who was a director of the building company when the payment was made by the QBCC under the Queensland Home Warranty Scheme.

I did not respond to the direction to rectify and/or the scope of works and am now being pursued for the amount paid on a claim.

If you have any issues with a decision made by the QBCC in relation to defects and/or incomplete works and the proposed rectification works, you should take steps to review the decision. There are authorities which state that failure to do so will prevent the builder from raising such issues in a defence at the stage when the QBCC proceeds to recover the amount paid on the claim.

Why it is important to update my address with the QBCC?

The importance of compliance/review of decisions within tight timeframes, with respect to both directions to rectify and any scope of works received by a builder, is paramount given the consequences which may result from a failure to comply.

It is not sufficient to assert that you did not receive a notice. The relevant address for service of any notice will be the address of the licensee (builder) in the register of licensees kept by the QBCC.

Where can I go for help?

For further information fill out the form to the right to make an online enquiry or otherwise contact us on 07 3009 8444.