Residential building insurance

Introduction

In the Northern Territory (NT), owners of new homes must have residential building cover as protection from defective or incomplete work.

New homes in this instance include duplexes, units in complexes up to three storeys in height excluding undercroft or underground parking levels, and extensions or renovations to those buildings.

The Building Act sets out the requirements for residential building insurance. Read the Building Act 1993.

Read about getting a fidelity fund certificate for residential building works, including extensions or renovations carried out since 2013.

Read about the home building certification fund, the scheme for insuring residential building work between 1993 and 31 December 2012.


Fidelity fund certificate

This page has information for people doing building work prescribed by law in the Northern Territory (NT) who need residential building cover for defective or incomplete building works.

Residential building cover is issued in the form of a fidelity fund certificate. 

This cover is for residential building work only, not for commercial or transportable buildings or government contracts.

The cover is similar to home warranty insurance cover in other states. 

What is covered

A fidelity fund certificate covers owners against the following costs if a builder becomes bankrupt, dies, disappears or has their registration cancelled by the Building Practitioners Board:

  • costs associated with transitioning to a new builder to complete the work
  • costs of rectifying non-structural defects in the first year after completion
  • costs of rectifying structural defects for six years after completion.

Fidelity fund certificates give consumer protection rights to owners of new homes including all the following: 

  • duplexes
  • units in complexes up to three storeys in height excluding undercroft or underground parking levels
  • renovations and extensions to those buildings.

Building work that requires cover

You must apply for a fidelity fund certificate for prescribed residential building works. 

Prescribed residential building work includes all the following: 

  • building a new home
  • units in complexes up to three storeys in height excluding undercroft or underground parking levels
  • renovations and extensions to the buildings above
  • building work worth over $12,000 that increases the residential floor area of a property.
The table shows common residential building work and whether a fidelity fund certificate is required.

Type of work

Fidelity fund certificate needed

House

Yes

Duplexes and townhouses

Yes

Conversion of shed to house, or enclosure of a carport to form a habitable room

Yes

Prefabricated house

No

Flats less than three storeys excluding undercroft or underground parking levels

Yes

Flats greater than three storeys excluding undercroft or underground parking levels

No

Additions and extensions to:

  • house
  • duplex or townhouse
  • flats less than three storeys excluding undercroft or underground parking level

Yes, for works over $12,000 that increase the floor area

Garden sheds and fences

No

Bathroom renovation

No, unless completed in conjunction with other work to a building that does require a fidelity fund certificate

Bed and breakfast

Yes, unless the building is to be classified as a Class 1b building. Contact your building certifier to discuss your requirements.

Retaining wall separate from and not supporting a residential building

No

Retaining wall for a residential building structure

Yes

Requirements for builders

Registered builders must apply to the fidelity fund for an annual level of cover. 

If you a registered builder in the NT, you must show that you have the financial capability and experience for the level of cover you want. 

On behalf of their clients, builders must also get a fidelity fund certificate for every job that includes prescribed residential building work.

You must have a fidelity fund certificate before you can get a building permit for prescribed residential building work, and before you demand payment from an owner. 

Requirements for owner builders

Owner builders must have a fidelity fund certificate to cover future owners for building defects.

Cover is only available after the property is sold or transferred and if the owner builder becomes bankrupt, dies, disappears or has their registration cancelled by the Building Practitioners Board.

How to apply

Contact the Master Builders Fidelity Fund to get a fidelity fund certificate.

The Master Builders Fidelity Fund is currently the only provider in the NT and manages the fidelity fund.

Website

www.fidelityfundnt.com.au 

Phone

(08) 8922 9680

Email

info@fidelityfundnt.com.au

Post

11/396 Stuart Highway
Winnellie NT 0820

Building disputes and complaints 

If your builder has not died, disappeared, become insolvent or been deregistered, you can't make a fidelity fund claim. Contact the Commissioner for Residential Building Disputes to mediate or make decisions about rectifying or completing work on your property. 

Read more about building complaints and disputes.


Home Building Certification Fund (HBCF)

The Home Building Certification Fund (HBCF) stopped issuing new policies on 31 December 2012. It has been replaced by residential building cover in the form of fidelity fund certificates.

This page is for existing policy holders with the fund.

What is covered

The fund covers policy holders in the event that building work at the time of construction was not compliant with the National Construction Code, which includes the Building and Plumbing codes of Australia.

The code sets the minimum standard for the construction of buildings. It does not relate to the standard of workmanship or the quality of products used.

The fund provides cover where the original practitioners of the building work will not or cannot fix identified non-compliant work.

Cover is only available if an occupancy permit or certificate of substantial compliance has been issued for the work. No cover is available for work that is only covered by a certificate of existence.

You may claim for defective building work for 10 years. The period of cover starts from the date the works were physically completed, but no later than the original two year building permit period.

The fund does not cover you for matters beyond the National Construction Code, such as any of the following: 

  • poor workmanship
  • aesthetics such as minor cracks due to thermal movement, paint finishes and floor coverings
  • normal wear and tear - eg: deterioration of timber on balconies, deterioration of solar hot-water systems, loosening of roof and wall sheeting.

Before you make a claim

If possible, contact the original practitioners to give them the opportunity to correct any defective work.

You can only make a claim if:

  • there is a HBCF policy for the building work
  • the building work has been issued with a certificate of occupancy or a certificate of substantial compliance
  • the claim occurs within the period of cover.

If you are an owner builder, you can't claim for non-compliant building or plumbing work. However, new owners of the property can make a claim within the 10-year policy period.

How to make a claim

Follow these steps to make a HBCF claim:

Step 1. Fill in a HBCF claim form PDF (624.8 KB).

Step 2. Submit the form to a Building Advisory Services office.

How a claim is assessed

You will receive acknowledgement that your claim has been received within five working days. 

You will be contacted if access to your property is needed for an onsite inspection.

The assessment of your claim may take time if it is complex or needs to be independently assessed by a building practitioner. 

Contact Building Advisory Services for updates on your claim. 

Successful claims

For each part of your claim that is found to be valid, you must pay a $200 excess fee to a Building Advisory Services office before rectification work can begin.  

How to appeal a decision

If your claim is was found to be fully or partly invalid, you can appeal for a reassessment of the decision.

Write to Building Advisory Services including details of why you consider the decision to be incorrect.