Builders’ insurance review still on the wrong track

LETTER TO THE EDITOR

 

Sir – About 16 members of the public including residential builders and home owners and builders attended the presentation of the Residential Building Cover review at Deloittes, the company requested to conduct the review.

 

The representative from Deloittes halted the presentation halfway through when it became apparent the results of the review did not actually answer any of the concerns of the residential builders present.

 

The results of the review presented seemed to be in our opinion mainly a review of the financial viability of the Master Builders Association fidelity fund.

 

Ongoing questions builders have raised previously were not answered and in fact more questions are now raised. We were advised at the meeting that the “independent” review panel attended an information session with Master Builders during the review process.

 

This courtesy was not extended to any residential builders or members of committees formed by residential builders since the introduction of the Residential Building Cover.

 

This again raises the question, who is driving this independent review as it seems to be one-sided without any opportunity for representation of residential builders?

 

One thing the review has achieved is to confirm that with the introduction of the Residential Building Cover builders and consumers alike have had a 10 year warranty insurance removed and a last resort fund introduced that only activates under the construction period and only if the builder becomes insolvent, walks off the job, loses their licence or dies.

 

At the RBC review meeting builders again put forward the suggestion to the representative present the possibility of reintroducing the home certifiers fund with a price increase to make it viable in conjunction with the reinforcement of the progressive payment system that has been used by banks for the last 25 years.

 

They also suggested the establishment of a trust fund managed by TIO with contributions from each residential building application that would give full insurance cover from commencement to 10 years after completion of contract.

 

Another concern that was again expressed by the builders is the control that the fidelity fund gives Master Builders over the residential building industry in the NT and the rights of privacy for not only registered builders but also home owner builders taking on projects.

 

We would also like to acknowledge the Minister of Central Australia for his support of the residential builders throughout the Territory in his statement to Cabinet that was sitting discussing the review at the same time as we were being presented the results in Alice Springs.

 

Jamie de Brenni

Alice Springs

 

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3 Comments (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. Steve Brown
    Posted January 7, 2014 at 2:54 pm

    Yeh, I am in absolute agreement with Darren and Phil. What a shameful, insulting con the Residential Building Cover is!
    Not only does it serve to drive the small builder and affordability along with them from the industry. It leaves the consumer completely exposed, thinking they have some form of insurance backup when in reality all the cover offers them is a maximum of $200,000 and that only after they have spent years in the court suing the builder and anybody else involved, and upon the action failing!
    Last bloody resort alright! The real question for our community! Who would introduce a scheme like this, and why?
    And to our pollies: “What are you going to do about it?”

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  2. Darren Burton
    Posted January 7, 2014 at 10:51 am

    As a member of the builders collective I was present at the reviews release at Deloittes office. I am a licenced builder and a local who has invested heavily in Alice Springs and its future.
    The residential insurance fund that is now in place was a knee-jerk reaction to a couple of bad builders in the Northern Territory by a few public servants who failed to enforce previous building regulations. The old TIO Fund was working fine.
    It needed to be updated and fees needed to be increased but it was there to protect builders and owners alike, it needed an extra policy attached to protect against builders going broke, leaving the job or if they die.
    The new fund and the old fund would not of helped with the Cary debacle as he was a bankrupt and dishonest person who should not have had a licence if the Builders Licencing Board had done their job.
    The fund now makes it impossible for young builders to make a start and the older builders don’t wish to risk their assets (often their home) now and in the future to go to work each day.
    Most builders are mums and dads and need clarity and insurance cover to go to work each day.
    Builders live in this great community and need the same protection given to home builders and not to be tarred with the same brush as a few dishonest people who had no interest in the building industry – only to act in their own interests.

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  3. Posted January 2, 2014 at 9:53 am

    The Peter Chandler review of the RBC was delivered to the Builders Collective by Deloittes on December 18, 2013, some five months late, and is a document devoid of any substance or integrity.
    The Builders Collective of Australia rejects its presentation as a document not to be relied on as it is not factual nor is it accurate.
    The panel devoid of consumer or industry representation were charged with three terms of reference and the first and the most important was to apply the RBC criteria to the 60 builder failures in the Territory over the past six years, as these very failures were the reason the RBC was introduced according to MBA and BAS.
    The review bypassed applying the RBC criteria to the previous failures which is nothing short of mischievous, and reviewed on the basis all were eligible to claim which is far from fact, and none of their findings can be construed as reliable.
    The RBC Fidelity Fund must be removed and replaced with a genuine consumer protection regime that includes proper industry management which can be achieved very simply by updating and enhancing the previous scheme which should have been done in the first instance.
    It is time for Government to act as far too much of our money has been wasted already that could have been spent on the impacted consumers of the current and past regimes.
    Phil Dwyer
    Builders Collective of Australia

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