Quick Facts:

– If your building project is between $5,000 – $20,000, a small jobs contract under the HBCF scheme is required

– If your building project is over $20,000, you will need HBCF Insurance

– A licensed tradesperson/landscaper is required to provide a homeowner with a HBCF policy or certificate of insurance before commencing any project greater than $20,000

– The HBCF policy covers major project defects for up to 6 years and 2 years for general defects

– In NSW, HBCF was formerly known as ‘Home Warranty Insurance’

What is ‘HBCF’ and why do I need it?

No, it’s not a new acronym for the popular Boating, Camping and Fishing retail giant ‘BCF’, it’s actually an incredibly important type of insurance cover you NEED to know about.

So, what IS ‘HBCF’? Do I need to have ‘HBCF’ insurance for my landscaping project? Grab a cuppa and strap yourself in, there’s a lot to learn!

In a nut-shell, HBCF, or the ‘Home Builders Compensation Fund’, is a compulsory insurance cover that gives homeowners a level of ‘protection’ when engaging a licensed tradesperson to carry out residential building work.

In NSW, any residential building work (including landscaping) with a contract value of $20,000 including gst or greater, will require insurance cover through the Home Building Compensation Fund (HBCF). It’s important to note that the construction of retaining walls, paving, decking and other aspects of a landscaping project, may be considered ‘building’ under the HBCF scheme.

According to HBCF insurance provider ‘icare’ , ‘The Home Building Compensation Fund (HBCF) works as a safety net for homeowners as a last resort, if they are faced with incomplete or defective work carried out by a tradesperson’.

Did you know: A licensed builder or tradesperson in NSW is legally obliged to obtain HBCF insurance before starting any building works over $20,000

What does HBCF cover?

Good news for homeowners! HBCF insurance gives ‘cover’ to those who may have experienced a financial loss due to defective or incomplete building work. You may be able to claim compensation if a tradesperson (or landscaper) is unable to honour their commitments a under contract due to:

● Insolvency
● Dies, disappears, or
● has their building license suspended

What information should a HBCF insurance certificate detail:

● Builders name and company name
● Homeowners name
● Building site address
● Building contract amount
● Description of the building works being carried out

Unsure whether your HBCF certificate is legitimate? No problem. You can check your address and validity via the HBCF online register here.

Are there costs associated with HBCF Insurance?

Yes. While HBCF insurance is a great benefit to homeowners, there are costs associated with obtaining this type of cover.

Typically a tradesperson (or landscaper) will apply for HBCF cover via icare’s online portal on behalf of their client. Once approved, a HBCF insurance policy and certificate will be acquired. Keep in mind, policy costs will likely be passed on (to you) as the homeowner upon project completion.

The cost for HBCF insurance varies depending on the total value of the project. It is a tradesperson’s responsibility to disclose the premium amount, however it is in the homeowners best interest to consider these additional costs as part of their overall budget. To help estimate the costs associated with HBCF insurance, you can visit iCare’s online policy calculator here.

Landscaping/building projects between $5,000 – $20,000

Suitable for smaller scale repairs or renovation projects, residential building (or landscaping) work between $5,000 and $20,000 must be covered by a small jobs contract.

A tradesperson (or landscaper) must give a copy of the NSW Fair Trading ‘Consumer Building Guide’ to homeowners before entering into a home building contract. There are generally no costs involved with entering a small jobs contract.

Did you know: There are some instances where HBCF insurance is not required. For example, if your project is under $5,000 or only contains softscaping elements such as planting, mulching or turf installation.

When building or renovating your property or landscape, it may be worthwhile seeking legal advice to ensure peace of mind. It’s also important that your future tradesperson or landscaper has a good handle of their responsibilities when it comes to having the right licences and insurances in place.