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Court ruling highlights owner-builder risks

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A WA court ruling has highlighted the insurance obligations of owner-builders if they sell their property within seven years of receiving a permit, the state’s regulator says.

Perth owner-builder Jonathon Robert Reardon was fined $2400 after he pleaded guilty in the Joondalup Magistrates Court on November 1 to an offence related to not having the necessary home indemnity insurance.

Mr Reardon received owner-builder approval and a building permit in 2013 and completed construction of a two-storey home in the Perth seaside suburb of Yanchep the following year.

In 2016 he entered into a sales contract but didn’t have the home indemnity insurance policy required if an owner-builder sells a property within seven years of the permit issue date.

Building and Energy Acting Executive Director Saj Abdoolakhan says the laws are designed to protect new owners from defects.

“Home indemnity insurance covers subsequent owners if the owner-builder fails to rectify faulty or unsatisfactory workmanship for reasons such as insolvency, death or disappearance,” he said.