So you’ve finally managed to liquidate your builder so that you can claim on your HOW insurance. Now you need to jump through a whole lot of other hoops as you battle your insurer (and bureaucracy).
After my posts on HOW earlier in the week, I received an email from Rob. For six years he’s been battling the builder, Consumer, Trader and Tenancy Tribunal (CTTT), the Office of Fair Trading, and the insurer. He still doesn’t have a livable home. Here is an abbreviated version of the story in his words:
“My situation. Engaged a builder to build a house. House should have been finished in May 2003. He did such a crappy job the house cannot be lived in.
Office of Fair Trading ordered him to do repairs. He did not.
I took the matter taken to CTTT where I won but the CTTT decision is suspect because it means I cannot fix the house sufficiently to comply with DA. [Note from Amanda - this is an issue we're going to delve into a little more in a forthcoming podcast]. Further items the CTTT said were adequate will not be passed by Council and there is no avenue available to have the decision of the CTTT changed.
The builder was issued with Supreme Court orders to pay but he did not. Instead he set up a new company. I liquidated the builder’s original company so I could claim on insurance. At this point my costs were $55,000 rent, $65,000 legals.
After an external administrator was appointed to the company I submitted a claim on the Home Warranty Insurance. The insurer inspected the house and said it would cost $167,500 to fix. The real cost to fix is probably significantly higher.
The insurer then offered a total of about $50,000 for my rent ($55,000), legal costs ($65,000) and cost to fix the house ($167,500) which if accepted would have left me $70,000 worse of than if I had accepted the defective house in the first place. That is a house for which I could still not get an occupancy certificate or live in legally.
After a further 12 months the insurer offered $100,000 cash plus the original builder (with his new company) to fix the house but limited the rectification works to $80,000. The work offered, if completed, would still be insufficient to fix the house such that it could be lived in.
Then the insurer made a further offer that was accepted. The offer cannot be disclosed but even if the offer was the maximum available under the policy of $200,000 it would mean I still would not have enough money, based on the insurers valuation to fix the house, to pay my legal costs, reimburse the rent I paid and fix the house.
$65,000 legal cost + $63,000 rent + $167,500 to fix = $295,500 versus a maximum of $200,000 under the insurance policy.
After nearly 6 years I still do not have a house I can live in. I guess the system does not work.”
I’ll be posting a podcast with Rob in early December. You might want to look out for it. I’ve begun to read with interest the tribunal orders relating to his case - and it’s always time consuming going through the details of a renovation disaster once it’s gone legal! Rob told me he already had a suitcase of documentation - I know what that’s like. But I’d like to try and draw out two things: what we’d do differently and what’s broken that needs to be fixed. (Some may say the latter has been established but I’m going to try and look at this afresh myself, with as little of a biased consumer eye as I can!)
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