Building and Construction Law Update: Changes to The Home Warranty Scheme

Licensed contractors carrying out residential construction work may be affected by changes to the Queensland Home Warranty Scheme, which commenced on 28 October 2016.

The Scheme is administered by the Queensland Building and Construction Commission and provides homeowners with insurance where contractors fail to complete works or rectify defects. A licensed contractor must pay a premium towards the scheme if they enter into a contract directly with a consumer (i.e. the home owner) to perform residential construction work valued over $3,300.

The premium payable varies according to the “insurable value” of the work, being the reasonable cost of having all materials supplied and the work carried out by a licensed contractor, whether or not the work is carried out on this basis.

For contracts entered into on or after 28 October 2016, the scope of works covered by the Scheme has been expanded and now includes:

• The erection, construction or installation of residential swimming pools.
• The installation of a manufactured home.
• In relation to a residence or related roofed building (including sheds):
  • all building work performed within the building envelope (internal or external parts of the building), for example, painting, tiling, plastering, roof restoration and repair work, rendering of walls, floor restoration and glazing work;
  • anything attached to the building if it requires building or plumbing approval;
  • any structure attached to the external part of the building where there is no other supporting structure, for example, an awning or handrail; and
  • stairs or an access ramp which are permanently attached to the building.
• In relation to plumbing and drainage for a residence or related roofed building:
  • building work for the primary water supply, including the installation of a water tank;
  • building work for sewerage or drainage; and
  • stormwater drainage.

Licensed contractors performing residential construction work should be aware of their obligations under the Scheme and make allowance for adjusted premiums payable on the expanded scope of works covered by the Scheme.