Home Warranty Insurance - more tales of failure

by Amanda on November 15, 2008

While this renovator’s builder refuses (and seems unable) to fix her leaking deck, getting another builder to fix the problem would void her HOW insurance. Authorities say she needs to FORCE him to fix it.

In The Renovator’s Survival Guide I wrote about my friend Margaret, whose builder stealthily altered clauses in the contract after it had been negotiated with the architect. Margaret and her architect laid it on the line at a site meeting and had him sign a new contract. She also told him to stop burying them in a barrage of emails and faxes ‘flagging’ all sorts of spurious and potential claims. After that was sorted out, things seemed to go well. That was about a year ago when I interviewed Margaret for the book.

I caught up with Margaret this week and was disappointed to learn that after building was complete, she discovered that the deck of the apartment above her, which had been built during the renovation, leaked onto her deck. They had the builder return to fix it. They believed he had. Then it rained again, the leak returned, the builder then returned. Despite several attempts, the problem remained.

Margaret and her neighbour had retained about $80,000 of the contract price at this stage, but the builder didn’t respond to their calls or return to fix it another time. Margaret and her neighbour had other ‘leak experts’ out to look. The waterproofing and tiling were supposedly fine, so they were left wondering where was the leak? And what damage was it causing to the structure while it went unfixed?

(By the way, Victoria-based building insurance rectifier Steve Peluso, a director of Master Menders, says that fixing renovation defects accounts
for about 60 per cent of their business. Of that, water ingress, usually
over balconies, accounts for 40 per cent. 50-year veteran of the Australian building
industry, John Coghlan, also a founding principal of Buildspect, Victoria’s
largest building consultancy says that modern balconies cause ‘untold trouble’.)

In any case the real point of the story is this: Getting someone other than their builder to fix the problem would apparently VOID their Home Owners Warranty Insurance. Therefore Margaret and her neighbour need to begin a mediation process with their builder to force HIM to fix the leak. That’s the same builder that was unable to fix the problem and wouldn’t return their calls, despite being owed $80,000.

Margaret is spitting chips. “I don’t want to have anything to do with him!”, she says. “Plus, I’m too busy for this shit. This way we’ll be in mediation for months and months trying to force this shonk to fix it.” However, until they do, they can’t get their completion certificate either.

One can’t help wondering (again) just what benefit Home Owners Warranty is in a situation like this. It seems more of a hindrance than a help.

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