Builders Warranty insurance covered by HIH

From: Apprentice Millionaire


Calling experienced investors!

The property I am about to settle on has a builders warranty insurance that was with HIH. My solicitor is advising me to hold back on the settlement (delay it) until the policy is picked up by some other insurer. The house is 18 months old, so there's some life left in that policy.

My risk profile makes me think that given the nature of the building, the newness, the reputation of the builders (Pioneer), I should go ahead and ignore my solicitor's warnings. It is a risk management thing. Has no impact on finance or anything else (not that I am aware of).

What would experienced investors do? Wait, or just do it?

Cheers
Apprentice Millionaire
(aka Jacques in the old forum)
 
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Reply: 1
From: Apprentice Millionaire


Bonjour Michael,

>I believe both the HIA and MBA have new insurers in place
>(each State is different), ring them to find out if it
>covers or applies to you and the policy in question.

After ringing around, it transpires that the onus is on me to sort things out. The HIA and MBA are helping their members in priority.

I am glad my solicitor put in that condition: had it not been included in the contract, I would have to accept the fact that there is no Builders Warranty Insurance with this property. As it is, this issue can be used to delay settlement, and hence even negotiate a lower price as compensation for the lack of this insurance.

>As I said each state is different, but nationally a
>builder is responsible in perpetuity for structural
>faults. Some court case in Tasmania set the precedent for
>this fairly recently.

In perpetuity until the builder stops operating (bankruptcy or any other reason). This is what the insurance is for: in case the builder goes under.

Cheers
Apprentice Millionaire
(aka Jacques in the old forum)
 
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Reply: 1.1
From: Apprentice Millionaire


Hi Michael,

>The builder had performed poor work some 27 years earlier,
>had retired (ceased operating), the property had
>changed hands 3 or 4 times since new and still the
>builder was found liable.

That sounds interesting. I will start searching for this info (please let me know if you find anything in the meantime).

>Just make sure your posterior is covered, which I can see you are doing.

Hey, I am a newbie, but I am learning :) :)

Cheers
Apprentice Millionaire
(aka Jacques in the old forum)
 
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