Lawcovernotes August 2017

Home building disputes are a prime source of commercial litigation for solicitors, but also a source of complicated claims for Lawcover. In a recent Lawcover claim, an insured acted for home owners who sued their builder for defective and incomplete building works. While the solicitor handled the litigation competently, the builder ultimately went bankrupt and the clients could not recover against him. They could have claimed under the Building Compensation Fund but the solicitor did not advise them about the Fund until the notification period had expired. Solicitors acting for clients against builders should keep in mind that insurance may provide a backup remedy to litigation. However, different time limits apply to insurance claims and solicitors should thoroughly research the insurance position as part of the litigation strategy. The compensation regime around Home Building Insurance (formerly Home Warranty Insurance) has changed with the re- introduction by the NSW Parliament of an open market scheme. With constant changes to the legislative landscape, practitioners should ensure that they remain up-to-date with developments. Litigation is not the only source of Home Building Act 1989 claims. In another Lawcover claim, the insured acted for the purchaser of a newly constructed home. A certificate of insurance was not attached to the original contract for sale. The insured solicitor requested a copy but failed to notice that the certificate was dated after the date the building work was completed. Defective building works discovered later were not covered by insurance under the Act and no other insurance was available. Conveyancing solicitors should ensure that they keep abreast of the changing home building insurance regime. They should also understand the requirements for inclusion of insurance certificates in contracts for sale of properties which have had recent building work. Elissa Baxter General Counsel 5.