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New home warranty

One of the great advantages of buying a brand new home is a warranty. Purchasing a home is a significant investment, and you want to make sure it is well protected. In most states and territories throughout Australia, builders are required to be registered or licensed and to provide warranty for a period set down by government.

Is a new home warranty mandatory?

A statutory new home warranty is required by most states and territories. Some have ‘implied’ warranties that require that all work is carried out in a proper and workmanlike manner and the materials used are fit for the purpose for which they are designed. The length of the warranty – and also the contract amount that triggers the requirement for builders to provide a warranty – varies from state to state.

What’s covered?

Warranty generally includes protection against defects in work and materials as well as structural defects and non-completion of works. Warranty is provided as consumer protection for circumstances where the builder dies, disappears or becomes insolvent. While the builder is still around and trading, it is generally their responsibility to rectify items that are considered defects or incomplete work.

Before you sign a contract with your builder.

Be clear on what you are getting for your money. Specifications will generally list all the items, including fixtures, which are going into your new home. Verify that the builder is registered and can provide warranty. Your state government building authority should be able to provide this information. Make sure that you are clear on what you and your builder are responsible for under the contract.

Before you move in.

At completion, your builder will generally schedule a walk-through of your home, also known as a handover inspection. Together, you and your builder will go through the home to verify that it is built according to plan, with the features and inclusions specified in your agreement. At the same time, you should take note of any imperfections and defects that require attention, down to the smallest detail – a sticking drawer, a missing towel rack, a scratch on the wall, and so on. Discuss with your builder how and when these things will be dealt with. It is in yours and your builder’s interest to carry out this inspection so at handover ensure you are completely satisfied with the home. If damage occurs to the home while you are moving in, which does happen from time to time, it will be clear that this is your responsibility and not the builders.

At handover the builder should provide details such as warranties for appliances and so on so that if there is an issue you can contact the manufacturer directly. The builder may also supply handover documentation that outlines what your responsibilities are in relation to maintaining the house properly.

What if I run into a problem with my new home?

Keep in mind that ‘settling’ is common during the first year and may result, for instance, in minor cracks or nail pops. If you have questions about your home, encounter any problems or need service, contact your builder. There may be a maintenance period under the contract where minor maintenance items can be rectified by the builder for a period of time. After this period the warranty provisions relevant for the particular state or territory will dictate what should happen. In most cases any issue can be readily resolved by contacting the builder and it is important to do this first and foremost if you run into a problem.

Expectations and responsibilities.

Open communication is the key to avoiding conflict between you and your builder. What are the builder’s obligations and the performance standards? What are the company’s after-sales service standards and process? What are you responsible for once you move in? What do you need to know in order to avoid problems in your new home? Don’t hesitate to ask your builder for answers to these and any other questions you have.

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