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Buying a Home Covered by Builders Warranty?

Buying a Home Covered by Builders Warranty?
December 16, 2015 Josh Rowe

Buying a home that has been built or renovated within the last 5 years may seem like a great way to reduce the risk of structural issues, as the work will still covered under the builders warranty. Most people assume that the builder must fix any issues with the home under the builders warranty, however unfortunately it isn’t that simple. If the previous home owner has not correctly maintained the home or has unknowingly done something to impact the structural integrity of the home, then the builders warranty may be void and you will have to pay for any repairs yourself.

builders warrantyBuilders Warranty

The builders warranty (also known as ‘home warranty insurance’ or ‘building indemnity insurance’) is designed to protect the homeowner from any defects in the builder’s work and ensure the materials are fit for purpose, as well as protecting against structural defects (i.e relating to slab foundations, load bearing brickwork, structural timber, etc). The builders warranty also forms part of the consumer protection in circumstances where the builder dies, disappears or becomes insolvent, however in most cases if the builder is still in business then it is usually their responsibility to correct issues that are caused by defects or work that was not completed to the required standard.

For example, if a previous homeowner placed a garden bed against a wall of the home and this caused movement in the soil, contributing to the foundation slab shifting and causing cracks in the walls, this is not a defect relating to the foundation slab or poor workmanship, as the issue was caused by the homeowner after the construction was completed. The builders warranty will be void, and you as the current homeowner will be responsible for the damage and any costs required to resolve the issue.

Please note that general wear and tear and items that will naturally deteriorate over time (for example issues such as paint peeling, grout cracking or crumbling between tiles, mortar crumbling etc) are all part of the homeowner’s responsibility to regularly maintain to prevent damage to the home.

Each state in Australia has its own laws and regulations that governs the required insurance and warranties of work carried out by home builders and renovators. While most Australian states have similar builders warranty laws and regulations there are some differences (for example, the cost of the work that requires insurance, or the period of time covered).

It is recommended that you:

  • seek further information from your state government or consumer advocacy group prior to buying a home that is still under builders warranty, and make sure you understand what is covered and what is not
  • refer to the Building Code of Australia (BCA) regulations, the warranty legislation and guides (such as the Standards and Tolerances) relevant to your state
  • speak with the original builder in the first instance if you are unsure whether an issue with the home you’re looking to buy will be covered by the builders warranty or insurance
  • use the HomeInspectr smartphone app to identify any potential issues, if any are found have a professional building inspector check for the cause and ask for advice prior to buying


– Mark Chatterton, HomeInspectr


Don’t forget, the HomeInspectr App is available on Google Play & Apple App Store and is a great tool to help you check for potential issues you should look for that may affect the builders warranty.

The idea for HomeInspectr was created when Alyson Chatterton repeatedly observed homes being sold by ‘dodgy’ home owners. We’ve all heard the story – instead of fixing major issues with their home, it was easier to pass the costly remediations on to an unsuspecting new owner.

Property laws in most parts of Australia are based on a “buyer beware” doctrine. It’s very different to buying a car, where the owner is required to obtain a roadworthy certificate before they can sell it. HomeInspectr has been created to help people counter those dodgy homeowners who are shamelessly trying to offload their problem homes on to others.

Mark and Alyson designed HomeInspectr to provide the average home buyer with information to ensure they are aware of potential issues they should look for at an open inspection. They’ve pulled together an easy to understand guide for home buyers, based on the knowledge of a number of building experts with decades of experience in the industry. Our aim is to empower home buyers to find their perfect home.

This article was originally posted here.



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