IPART Makes Recommendations for HBCF Insurance Scheme Reform

The Independent Pricing and Regulatory Tribunal (IPART) has released its final report containing 22 recommendations for reform of the Home Building Compensation Fund scheme. The scheme requires that building businesses obtain insurance for any contracts over $20,000 in value, and aims to protect consumers in the event that their builder ceases to exist during construction or throughout the warranty period.

View the full report here

View a summary of the key recommendations here

While many of the recommendations relate broadly across the construction industry, one in particular relates to landscaping. The IPART report notes:

“The Landscape Association and the Swimming Pool and Spa Association (SPASA) identified certain works that should be excluded from HBCF cover. The Landscape Association considered that soft-scape works should be excluded from the scheme, because they do not represent a risk that needs to be covered by the HBCF. It submitted that soft-scape works are complete once installed, can be taken over at any stage by a new contractor, and do not have any lingering warranty insurance. It noted that they can represent a substantial proportion of the overall contract price for residential works. Hence, these items should be excluded from the calculation related to eligibility for HBC insurance, maximum caps on the value of works a contractor can carry out and in the $20,000 threshold per contract over which HBCF insurance is required.”

The report includes this key recommendation:
“We recommend that the Home Building Act is amended to make clear that soft-scape landscaping works are not residential building works. This is to ensure that a HBCF premium is not paid on soft-scape landscaping works which cannot give rise to a claim under the scheme.”

The Landscape Association is pleased to see the recommendations put forward by IPART, but notes that the decision regarding adoption of any/all of them will rest with the NSW Government. We will, of course, provide further updates as soon as they are available.

The Landscape Association has been working with IPART over several months to provide input on the scheme and its impact on the landscaping industry and we would particularly like to thank Andrew Rivett and Matt Leacy from Landart for their time and invaluable contribution to this consultation process.