A Dudley Park resident has been left $132,000 out of pocket after a builder, carrying out renovations on their property, failed to take out mandatory home indemnity insurance.
Peter John Edmonds, who is no longer a registered builder, admitted to carrying out the work without taking out an insurance policy, via a written guilty plea in the Mandurah Magistrates Court earlier this month.
The court heard Mr Edmonds entered into three contracts with the homeowner in 2020 and 2021 for various renovations at their Dudley Park home at a value of $96,213.
The law requires builders to purchase a home indemnity insurance policy if the building work is valued at more than $20,000 and protects homeowners by providing up to $40,000 for a lost deposit and up to $200,000 to address defective or incomplete work if the builder dies, disappears, becomes insolvent or loses their builder registration on financial grounds.
The resident later lodged complaints about the work, which saw the State Administrative Tribunal (SAT) order Mr Edmond to pay the homeowner $132,000.
Mr Edmonds suffered a serious injury and was unable to finish the project before eventually becoming bankrupt, meaning he could not pay the owner.
The court heard if Mr Edmonds took out an insurance policy, the homeowner could have claimed the $132,000.
Magistrate Leanne Atkins handed down a fine of $2000 and awarded costs of $504.30, noting Mr Edmonds’ early guilty plea but describing the offending as “serious” and resulting in “significant financial loss” for the homeowner.
Building Commissioner Saj Abdoolakhan said the case was a stark reminder of why home indemnity insurance (HII) is mandatory.
“If this insurance was in place as it should have been, the homeowner would have been protected from losses up to $200,000 following the builder’s bankruptcy," Mr Abdoolakhan said.
“As a registered building contractor at the time of the work, this builder was well aware of the HII obligations. On this occasion the court has decided to impose a fine of $2,000, which is 20 per cent of the maximum penalty available.
“If your home building work project is valued at more than $20,000, your builder must provide you with a copy of the HII policy. If you haven’t received this, ask your builder or check the details at QBE’s online certificate register.”
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