What is Home Owners Warranty? (NSW)

What is Home Owners Warranty? (NSW)



Home Owners Warranty Insurance is an insurance issued by the Home Building Compensation Fund (HBCF) in NSW. It is issued by iCare HBCF, a NSW government statutory insurer. It is compulsory and is there to protect home owners, as any standard product warranty does, for six years on any structural defects or incompletion of the construction and two years coverage for any non-structural defects. In NSW Home Owners Warranty Insurance must be obtained for any contract work over $20,000.


Essentially, your Home Owners Warranty (from here on in referred to as “HOW”) covers you or any subsequent owners of your home, for six years, for any incomplete or defective work carried out on your home.

Under normal circumstances, your contracted builder will warranty and make good on any defects for the warranty period. But unfortunately, there are circumstances where your builder may not be able to complete your project or make good on any defect repairs. They may become insolvent, die or even disappear. Even if a rectification order has been issued, some unscrupulous builders may simply ignore the rectification order. It is in these situations that your HOW acts as your safety net and kicks in.

HOW does vary from state to state and due to increases in claims, has risen in price and may continue to do so in the future? Whether your builder includes this cost in his tender pricing or charges for it separately, you the client will pay for it. Costs will depend on the type and value of the construction. If your builder does not include HOW in the tender price, be sure to have them give you an estimate prior to any signing.

Home Owners Warranty facts NSW:

  • HOW is required for any building work over $20,000
  • HOW must be obtained prior to an issuance of a Construction Certificate
  • HOW cover commences at the completion of construction (handover) or at the termination of any contract (contractor incompletion, death, insolvency etc)
  • HOW cover lasts 6 years for structural defects and 2 years for non-structural defects
  • HOW is transferable to any new owner of the home within 6 years of completion of construction

For further information including tools and resources visit Icare NSW.


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