Browse Forums Renovation + Home Improvement 1 Oct 02, 2012 10:28 pm Hello everyone, I have only just joined this forum tonight, so please excuse my ignorance/naivety on posting etiquette. I did do a search but couldnt find anything like my question, so here goes. I would love to hear from anyone who has advice on how to successfully navigate the nightmare of the NSW Home Warranty Insurance process - in respect of using a builder, with a NSW Fair Trade Contract (over $20,000), with a claim for incomplete works due to liquidation. We are in Sydney. We entered into a contract with a small owner/operated business in June (not sure I am allowed to give names here?) to undertake a fairly straightforward renovation of our home. It was to include a rearrangement of the space under the existing roof, a few new windows and doors, a loft conversion with staircase and ensuite, new laundry, kitchen and living areas. SIMPLE eh??! The project was scheduled to take 8 weeks, in the end, we selected the builder because we really liked him and his approach (and we both had a good gut feel about him, oh how wrong we were!) and we/he decided that we should/could continue to live in the house during the process (with our 2 young kids!). We have renovated a previous house ourselves 7yrs ago, so we knew what to expect living here and went in with our eyes open. We completed the NSWFT contract (over $20,000) and off we went. I wont go into all the details of exact figures etc, but basically the original contract was around $160,000, including various PC sums. It was quickly apparent there would be a number of variations (structural, flooring etc), which increased the total project to about $180,000. We paid every progress payment on time, by bank transfer. In total we had paid $145,000. We communicated regularly by email and were generally happy with progress and quality of work. We were realistic that timing would blow out, but after 10 weeks and several large changes in the budget (and having only just got to lock up) we began to ask questions and sent the builder an email with all our queries on budget/variations highlighted. The following day we left for a well earned weeks holiday - our reward to ourselves for surviving the winter living in 2 rooms in the building site without a kitchen. 3 days into our holiday we received an email from the builder announcing his business' liquidation. He waited till we went away in order to retrieve all his tools from our home. nice guy. Devastated, confused, inconsolable, traumatised, angry, violated, robbed... just some of the words that spring to mind. Also - the most distressing and pressing for me - I am now 29 weeks pregnant. This was 4 weeks ago. We are still living in the site because we have no other options. We have tidied up as best we can and continue to cope, because there are few other options. We have submitted our HWI insurance claim - a dizzying 400 pages of emails, photos, contract, receipts, forms and the like. We have just received a date for our assessors visit - next week, 8 Oct, we know that from then we will have to wait for a report, a tender process to new builders on their 'list' and then recommencement of works. Apologies for the long intro, but I really needed to set the scene so you can understand where we are at. so...... here is my question..... The one form we have not submitted to the insurer is called the 'Contract Balance Calculation form' it is basically the form that includes all the exact details of payments and agreed variations, and it seems all topsy turvy to me. Specifically what I do not understand is the sentence 'maximum indemnity under the terms of the insurance policy for a claim for non-completion is 20% of the Final Contract Price'. I dont get it, (or maybe I do, but it just doesnt seem right....) Is it basically saying that the higher the contract price (ie it would be in our best interest to include all and any variation that we ever discussed/agreed in increase the total contract sum to its highest amount) the higher the maximum we would be eligible to receive from the insurer, in terms of increasing the 20% amount?? It just seems totally skewed to me, so that is why I am not sure. Surely the lower the total sum the better, in terms of what we might get back from the insurer? We are realistic that we will possibly not be covered for the total amount of work still to be completed vs the amount of money we had already paid, but the tricky thing is that in the days leading up to the collapse we had started to try and claw back control of the budget by switching several items from the PC/variation budget to us paying them direct. We cannot afford to get this wrong.... If we list the total contract sum (incl variations) as eg $200,000, the 20% maximum indemnity would be $40,000. If we just use the sum on the contract eg $160,000 (with no variations) then the 20% maximum would be $32,000 - which is barely enough to cover the quoted amounts for major items we are still without (most pressing being the kitchen, which is made and ready to be delivered. Also, the insurance certificate only shows the insurable amount as the original contract sum ($160,000)... does that have any effect on the 20% maximum indemnity amount? Regardless of what happens, I am about to have a baby, so no-one is more desperate to get it right than me! Any advice/help/similar experiences would be gratefully received. Thank you! (and congratulations if you stuck with me and read this all the way to the end!!!) Re: Navigating a HWI claim in NSW 2Oct 03, 2012 6:02 am The 'Final Contract Price' should be = the total value of the initial price + all agreed variations. In other words it should be around $200,000 which should give you about $40,000. Agreed means that you need evidence that the builder has agreed to any request for a variation. Good Luck Brian The Harder You Try - the Luckier You Get ! Web site http://www.anewhouse.com.au Informative, Amusing, and Opinionated Blog - Over 600 posts on all aspects of building a new house. I apologise for any confusion, but your understanding is correct. We approached our situation differently based on advice from… 11 53177 Hi there, long-time lurker but first time posting. I've bought a house 2 and a bit years ago and last year we had some major water damage on a converted pergola area… 0 7925 1 9464 |