The ACT’s home warranty system is set to be reviewed by the ACT Government and the local construction sector is on board.

Expected to be completed in mid-2023, the ACT Government said they are working with stakeholders to ensure the protection of Canberra consumers and that the cover remains contemporary and fit for purpose.

Master Builders Association (MBA) provided input to enable the government to “properly scope and commence the review” and Minister for Sustainable Building and Construction, Rebecca Vassarotti, said she looks forward to “ongoing positive engagement” with stakeholders.

MBA CEO Michael Hopkins said “the ACT’s home warranty system has served the community well and now operates as an exemplary system compared to systems operating in other jurisdictions”.

“The MBA looks forward to working cooperatively on a review of the home warranty system to ensure it remains fit for purpose and continues to provide adequate consumer protection whilst also remaining affordable.”

Mr Hopkins told Canberra Daily the ACT home warranty system hasn’t been substantially reviewed since its commencement more than 20 years ago, and the housing market has drastically changed since the early 2000s.

“There’s been a number of changes over that time – home values have increased substantially over that time and residential construction is now more complex, particularly for multi-unit buildings,” he said.

“One issue that could be looked at in the review is how the system applies to the common areas of multi-unit complexes to ensure the system is fit for purpose.

“Generally speaking, the ACT home warranty system serves the community very well compared to other states and jurisdictions’ systems in place, but it is appropriate the government reviews the system to ensure it’s up to date with current practices for residential buildings.”

Ms Vassarotti said that as Canberra grows and develops, “it is essential that we continue to build confidence in our building regulatory system as we progress the important building quality reform work that has begun”.

“Consumer protection is a fundamental element of a well functioning building regulatory system and a priority as we progress this work.

“The ACT Government approved the establishment of the Fidelity Fund to offer home warranty cover at a time where the market for building insurance had failed. It is now one of the two operating schemes in the ACT, it continues to be an important mechanism to provide insurance to consumers where things go wrong with their builders.”

The review is set to examine a range of issues within the framework, including:

• Current application and approval of processes for home warranty schemes, including fidelity funds;
• Insurance settings, for example, a potential increase in the minimum prescribed amount;
• Scope of building matters covered;
• Settings in other jurisdictions;
• Currency of the scheme’s prudential standards; and
• Reporting obligations as an approved scheme.

“This was an issue that was explored in the inquiry into building quality conducted at the end of the last parliamentary term, which provided recommendations on how the fund could be strengthened,” Ms Vassarotti said.

“Members of the community have also shared their experiences of engaging with home warranty cover providers, which has proved key insights on what changes could be made to improve the home warranty cover’s legislative framework and its operation.”

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