Browse Forums General Discussion 1 Feb 24, 2011 11:04 pm We are in a bit of a dilemma- so I thought I would ask the lovely H1ers here for some advice/opinions. Late yesterday afternoon a vandal decided it would be a nice idea to throw a rock through our front window. We noticed it driving past the house and immediately reported the issue to our "Site Supervisor" who insisted that it was OUR problem and we had to resolve it/ bear the cost ourselves. We were stunned to say the least.... We would really love some advice/ opinions on where we stand....our perhaps even just a comment on how YOUR insurance and handover worked so that we have something to compare it against before we take matters further. Our situation is 'unique' so a bit of background is required- so I'm REALLY sorry if I get long-winded. For those not familiar with our build- we took a few things out of our building contract and organised our own tradesmen for a few areas of our home build (painting, air conditioning, kitchen cabinetry, electrical work, security system, flooring) We understood that if our tradesmen caused any damage that it WOULDN'T be covered by the builders insurance which we understood/ respected but for the most part they covered insurance on the house until handover. It was our understanding that we would mutually work out the timing of their contractors and our tradesmen etc. Intially things worked out quite well....However, just before Christmas things changed. Progress had been dragging on a bit (eg. their guy doing the cornices hurt his back and couldn't complete the work...just to name one thing) and we thought there was no way that the house would be completed before Christmas. We thought that they would take a break over Christmas and finish the work in the new year BUT then all of a sudden (in the last week or so before Christmas) the builders got a whole pile on contractors in and got the bulk of their work completed. It was chaos but a lot of stuff was done quickly and co-ordinating with our tradesmen was completely thrown out the window. At such short notice we couldn't organise several of OUR tradesmen (especially in the days right before Christmas) So right on Christmas we received a notice saying that according to them they had reached practical completion (excluding the stuff WE need to organise) We were told we had 5 days to notify them in writing of any issues and that final payment was to be paid ASAP (I can't remember the exact timing. I think it was within 7-10days) We were told we would incur interest if we didn't make payment when requested so we did the right thing- Completed OUR OWN PCI, supplied them with the list of issues in writing and made final payment via bank transfer even though there was A LOT of stuff that hadn't been completed (lots of half jobs eg. spa in place but plumbing/ pump not finished, insulation in the roof space but not spread out, etc...) We couldn't even question anything as they had officially commenced holidays. We didn't have further contact with the builders until mid January when they resumed work after the Christmas/ New Year break we FINALLY did a walk through the house. The site supervisor was quite obliging as we looked over the quite extensive list of items to be completed/ corrected. There were a few things they needed to completed that we requested they do after we had completed painting (Eg door furniture, fitting rails in robes, mirrors in bathrooms etc) It wasn't how we thought things were going to work at the beginning of the build but we had to make the best of the situation. They had their money so they were happy and we needed a bit of extra time to finish our stuff and as far as I was concerned we were all happy with the situation (Even though it wasn't how we thought things would work out) Now my husband has been working on the painting himself (His hours are long with full time work and he has been painting before and after his 'day job') and it has taken a lot longer than expected for him to complete painting. In that time the builders' contractors have been coming and going in dribs and drabs completing the items on the maintenance list- (although they still haven't completed stuff on the list that isn't related to the hold up with the painting) We haven't been fussed that they haven't completed the items because there is still a fair bit of painting to go (although we are getting much closer to having our side of stuff done) The house is still on "builders keys" and we have had various contractors organised by the building company coming and going (including one guy who decided to show his friend through the house at 7pm one night ) So fast forward to today and our Site supervisor tells us that according to them we have taken possession of the house (even though they openly admit we haven't actually had handover??) and all insurance matters are OUR responsibilty. The problem is that the bank (where we organise our insurance through) told us that our insurance doesn't take affect until the day of handover....which hasn't officially taken place.....so although they started preparing documents at the time of PC they don't 'date' things until handover.....so as far as we can tell we possibly have no insurance for the damaged window. (and if that is the case thank goodness nothing more serious has happened!!!!) Our understanding was that we didn't take 'possession' until OUR keys (not the builder/ tradesmen keys) turned in the lock. I'm shocked that the builders would expect that we would have home insurance when they have in excess of 30 people who hold 'trademens keys' to our house and are coming and going when they please! I've been holding off showing friends and family through our house until official handover for health/ safety/ insurance reasons thinking that it was still under the builder's insurance. Now to add to this- my husband commented on the fact that we have had tradesmen in our home showing their mates around out of working hours (without our persmission)and the site supervisor just shrugged it off. My husband asked where we stood when the insulation guys come in to spread out the roof insulation and what would happen if he accidentally put his foot through the ceiling. Our SS commented that in a situation like that their insurance would cover it. It seems a bit odd that they can have cover under some circumstances but not to cover the damaged window. The situation that really annoys us is that we picked up a number of issues with anticon and (as far as we can tell) apparently the roofing guy is upset that we picked up errors with his work and he said he will come back to complete the work but only on the condition that my husband doesn't come anywhere near the house for 2-3 days while they fix their mistakes. So according to the builders we have apparently taken possession of the house BUT they can still insist that we stay away from our own house that we have paid for in FULL while their cranky roofing guys come and fix work they should have done properly in the first place! (sorry this is turning into a rant) It sounds like a double standard to me. If we have taken possession (like they say we have although I don't believe we have legally) then as far as I'm concerned the locks should be changed and the roofing guys would need our permission to be on our property. So can anyone offer any advice/ or comments that might help me to work out where we stand and where we go from here!? Has the bank given us the wrong info here? Have we been too naive? As far as I'm concerned it is the builder's responsibility to make things more clear. Is this a matter I should take to the "Master Builder's assocation" or is there some other 'body' I should address my complaints to? Whose responsibility is it to replace the damaged window? Re: Advice/opinions on timing of Home insurance and handover 2Feb 24, 2011 11:16 pm I suggest you speak to BACV, google that and their number comes up. They have always been friendly and their advice is spot on and free. Good luck! Now: Building another new home Settlement: 8 July 2021 Construction due to start: In two months Re: Advice/opinions on timing of Home insurance and handover 3Feb 24, 2011 11:24 pm We are based in WA (Sorry I thought I had WA listed in my profile- but obviously I haven't as it isn't showing in my post above) Does anyone know if there is a WA equivalent? Re: Advice/opinions on timing of Home insurance and handover 4Feb 25, 2011 12:20 am It might be something that is in limbo between a few departments, but maybe call DOCEP and ask for their opinion? Or the Building Commission. Good luck, and let us know what happens! Oceanic with Nautilus upgrades. Handover 8 September 2010 Re: Advice/opinions on timing of Home insurance and handover 5Feb 25, 2011 1:47 am It's an interesting one Miss, and here is my take on it. According to the MBAWA Contract section 27, the first part of the PCI process was correct in that the builder notified you and asked you for the list of defects, and you correctly provided the list to them. According to the contract, Practical Completion is not achieved until all items "required by the contract" are completed. I don't think the builder was entitled to request payment at that point since they had not reviewed your list or acted on it (and because all required items for habitation were not installed). The issue is that you did pay them and therefore I think they could reasonably assume that Practical Completion was met, at which point you are entitled to take possession of the house (and the builder should give you the keys - i.e. handover). At this point any works/damage done by the builder would probably be covered by their own insurance, but they are no longer covering the house. Based on that, I would conclude that the window is to be covered by you since the house is technically "in your possession" once you achieve PC. What confuses things greatly is that there are still things to be done by the builder that should have been done before PC, and you are also doing things yourselves to achieve PC, and you have not actually been given possession of the house. So, as Oceanus said, I would try contacting the Building Commission for advice to start with (http://www.buildingcommission.wa.gov.au/bc/index.aspx) as it would certainly be worth trying to clarify the situation just in case someone does put their foot in it! Re: Advice/opinions on timing of Home insurance and handover 6Feb 25, 2011 9:04 am More details on BACV: What is BACV? Building Advice and Conciliation Victoria (BACV) is a one-stop shop for consumers and builders providing free advice and assistance to resolve domestic disputes. This service is a joint service delivered by Consumer Affairs Victoria (CAV) and the Commission. CAV is the entry point for this process and can be contacted on 1300 557 559. Legislative changes to builders warranty insurance for domestic building contracts signed after 1 July 2002, saw the introduction of BACV to help home owners and builders work together to prevent or resolve building disputes. The Domestic Building Contracts Act 1995- sets out minimum terms and conditions and implied statutory warranties in the domestic building contract which you and your builder sign. It also provides frameworks for paying deposits and stage payments and resolving domestic building disputes. This Act is administered by Consumer Affairs Victoria (BACV) Now: Building another new home Settlement: 8 July 2021 Construction due to start: In two months Re: Advice/opinions on timing of Home insurance and handover 7Feb 25, 2011 9:20 am Thanks Oceanus and Westy- I'll try the building commission and DOCEP. Thanks for the extra info on BACV Karmaz- but I doubt this service can help me given I am in WA. Can anyone else reading this let me know how things have worked with timing of THEIR insurance. Eg. Do the insurance policies take effect when they receive keys OR at the time payment is made? The main issues I have is that..... - We received a notice of PC via E-mail when their offices had apparently closed (right on Christmas) so there was no-one we could even speak with to clarify anything. We followed instructions according to the E-mail yet they haven't followed through. They declared practical completion was achieved on the 24th of December and we received the E-mail on the 27th of December. We provided their list and made payment prior to them returning to work after their Christmas/ New Year break yet they haven't responded in writing nor provided keys as per the contract.... and they even admit that "handover" hasn't taken place. The bank is saying our insurance isn't dated until the date of "handover" It is all very confusing. There are a few points in the contract with 'grey areas' 27(c) "Within 5 working days after the service of such notice the Owner shall give to the Builder notice in writing, of those matters and things (if any) which the Owner considers are required by the Contract to be done for Practical Completion. WHICH WE DID The Builder shall forthwith do all such things (if any) as may be required by the Contract for the achievement of Practical Completion and shall give to the Owner further notice in writing when he has done all such things." YET THEY HAVE NOT DONE THIS WE HAVEN'T RECEIVED A RESPONSE IN WRITING 27(d) "In the event that the Owner does not give any notice within the time specified in paragraph (c), the Works shall be deemed to have reached Practical Completion at the date of service of the notice given by the Builder pursuant to the provisions of paragraph (b)." WE PROVIDED THEM WITH THEIR LIST SO THAT THEY COULDN'T COME BACK AND SAY THAT IT HAD DEEMED TO HAVE REACHED PC 28(b) "Should the Builder not receive from the Owner any payment on Practical Completion by the due date the Builder shall be entitled to interest thereon at the rate specified in Appendix 1 item 6." WE OBVIOUSLY DIDN'T WANT TO INCUR INTEREST SO MADE PAYMENT TO AVOID THIS EVEN THOUGH NO-ONE WAS AVAILABLE TO CONTACT AT THE BUILDING COMPANY TO CLARIFY ISSUES 28(c) "The Owner shall not be entitled to take possession of the Works nor receive the keys of the dwelling house until payment to the Builder of all money remaining due under paragraph (a) and any interest accrued thereon has been made." 28(d) "On payment of the said money the Builder shall hand all keys to the Works to the Owner or such other person as the Owner may authorise to receive them." WE MADE PAYMENT BUT HAVE NOT RECEIVED KEYS! 26(d) "THE MAKING OF ANY PAYMENT TO THE BUILDER SHALL NOT BE TAKEN AS PROOF OR ADMISSION THAT ANY WORKS HAVE BEEN EXECUTED IN ACCORDANCE WITH THE DRAWINGS AND SPECIFICATION BUT SHALL BE TAKEN TO BE A PAYMENT ON ACCOUNT. " This clause covers the circumstance of your anticon worries that we have agreed to remediate and practical completion maintenance items. We found this hard to interpret but took it in good faith that if we made payment then works would still be completed Westy- I get what you're saying in that because we made payment we were ENTITLED to take possession and be provided with keys....but as you've noted...... that's what our issue is! Locks weren't changed and we DIDN'T receive our own keys and even the SS has stated that 'handover' hasn't occured so we presumed that we hadn't officially take possession. Oh well- will make some calls and see what I can come up with- Re: Advice/opinions on timing of Home insurance and handover 8Feb 25, 2011 3:53 pm Well I rang the building commission and I didn't really get anywhere. I'm not sure the lady was really listening to my questions but....... In a nutshell they may deal with issues related to "poor workmanship" but couldn't really offer me advice on things related to "procedures" or insurance. The person basically said that because the vandalism wasn't the 'fault' of the builders the builders weren't necessarily responsible for organising a replacement window (This left me puzzled as I'm thinking surely they must have some kind of cover for that because you hear of vandalism on building sites ALL the time. The vandalism wasn't OUR 'fault' either....so in theory we could use the same argument. ????) She told us we could go to the police and report the damage (Hmm That's great to know.....but are the police going to pay for the new window???) She then said that we could see whether our insurance would cover it and that is where I tried to explain that is what the issue was.... That our bank hadn't finalised insurance on the house because "handover" hadn't taken place yet the builders are arguing that we have taken possession. Surely if we had taken possession then we would have keys to our own home and it wouldn't still be on tradesmen's locks! She explained that there wasn't a proper definition of "handover" it was a term used by builders and could vary from contact to contract. Hmm... well that doesn't help us much! Anyhow- we have since finalised insurance just so that we are covered (It was the most sickening feeling to think there may not have been adequate coverage) I have told my husband that if they are claiming we have possession then I want the keys TODAY and from now on no-one is to enter OUR HOUSE without either myself or my husband personally letting them in. It doesn't help us out with the issues with the window but at least we are protecting ourselves just in case anything else happens! Not sure where else to go from here. I'm SO disappointed with the whole situation! Re: Advice/opinions on timing of Home insurance and handover 9Feb 25, 2011 4:04 pm Well they were a lot of help weren't they. Hopefully your insurance will cover things now. A thought though - our bank required us to take out insurance before they would approve the loan. I guess your bank didn't ask for that? Re: Advice/opinions on timing of Home insurance and handover 10Feb 25, 2011 4:26 pm There were some 'insurance related' things sorted out with the bank early on but I don't recall what type of insurance it was! That probably sounds really naive doesn't it but in this day and age you 'presume' that there are processes to be followed and we have followed any and all instructions provided by our bank and builder and we "thought" everything was covered in one way or another! The advice from the bank was that our home insurance didn't take effect until handover and that's what we would need to use to claim for the damage to the window. That was only activated today and the damage occured on Wednesday....so if what the bank is telling us is true and correct- nope they can't help us out with the cost of a replacement window! 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