This article is from the Australian Property Journal archive
BUYERS of residential apartments in NSW will be able to have their homes insured against building defects for 10 years after the state government announced a policy that is the first of its type in Australia.
Minister for Fair Trading, Victor Dominello said the NSW Department of Customer Service had accepted the application of Resilience Insurance to offer decennial liability insurance as a form of security under the Strata Building Bond and Inspections Scheme. In the wake of the Opal Tower and Mascot Towers incidents and resulting NSW government inquiry, Resilience Insurance launched this year a latent defects insurance (LDI) specially designed for high-rise residential property.
“This is a big win for apartment owners and body corporates,” Minister Dominello said.
“Decennial liability insurance provides those living in residential apartment buildings with comprehensive consumer protection for building defects caused by substandard design and building work.
“It also provides an insurance safety net for consumers that is currently lacking in residential apartment buildings.
Mascot Towers residents were evacuated from the inner Sydney apartment building on a Friday night three years ago after cracks were discovered in its basement. That happened six months after nearly 3,000 Opal Tower residents in Sydney Olympic Park were forced out of their homes on the previous Christmas Eve due to structural defects. A subsequent review recommended an overhaul of the construction industry, while the Mascot Towers Owners Corporation told the NSW government inquiry into the regulation of building standards, quality and disputes in 2019 that buyers have more consumer protection buying a $1,000 television than a multimillion-dollar apartment.
Now, purchasers and body corporates will no longer need to prove liability and will only have to demonstrate the damage for assessment.
Under the decennial liability insurance scheme, developers or builders would take out a policy to cover any potential costs by an owner to fix serious defects of critical building elements for up to 10 years.
A policy would cover critical parts of a building’s common property, including the building’s structure, fire safety systems and waterproofing.
Building owners can make a claim as soon as a defect is identified.
“We’re looking to clean up the market and bring an end to expensive litigations against developers who have deep pockets or subsequently vanish into thin air,” NSW Building Commissioner David Chandler said.
Project Remediate reopened
Meanwhile, the NSW government is providing eligible owners corporations yet to register for Project Remediate another opportunity to do so. The program offers interest-free loans and expert construction teams to remove and replace combustible high-risk cladding.
Work has also included the installation of previously absent elements such as fire barriers, moisture management and window heads.
More than 200 owners corporations of eligible residential apartment buildings have opted-in to Project Remediate, according to the government.
The closing date for owners to register for Project Remediate is 16th December, which intends to improve safety and quality of high-risk residential apartment buildings by the middle of 2024.
