HUNDREDS of home owners have been left stranded after Privium, one of Australia's most active home building companies, suddenly downed tools on November 11, and went into voluntary administration on November 17.
What does that mean for those holding an insurance certificate? What if they don't?
According to the State Insurance Regulatory Authority (SIRA), impacted homeowners in NSW (those with unfinished homes or homes with defects) may be protected through the home building compensation scheme. In NSW, that is managed by icare HBCF. "Should the voluntary administration lead to the successful restructuring of Privium Group, concerns about incomplete or defective building work can then be pursued through the business directly."
SIRA has an online check to find out if there is valid home building compensation cover for your residential building work. Meanwhile, NSW Fair Trading is investigating the operations of Privium Group and has encouraged people with "outstanding work or monies with Privium" to lodge a complaint.
Who is icare?
icare Home Builders Compensation Fund (HBCF) is an employer-funded workers insurer, owned by the state and overseen by the NSW treasurer but independent from government. It was one of three organisations that replaced WorkCover in 2015. It is aware of 145 Privium projects currently underway and insured under HBCF, and is contacting potentially affected home owners.
What can icare do?
It is not yet clear what will happen with the builder or a home owner's entitlements to claim at this point, icare says. "Because voluntary administration is designed to resolve a company's future, and, if possible, to save the company or its business, where we accept a claim but the company resolved its issues without compromising the home owner's rights and returns to ordinary trading, we may need to refer the home owners back to the company and normal dispute resolution pathways."
Is a 'trigger event' required for the claims to be paid out?
Yes, a trigger is required. Voluntary administration, which Privium has entered, is a valid trigger, for so long as the voluntary administration continues. If icare accepted a claim, but it was not yet completed and Privium went back to business as usual, ie: reversed out of voluntary administration, home owners would be referred back to the company and "normal dispute resolution pathways".
What happens to people who do not have a certificate of insurance?
It is generally illegal in NSW for a builder to accept a deposit without having HBCF insurance in place. If this has happened, it should be referred to Fair Trading and to SIRA to review.
How long does it generally take for an insurance claim in these circumstances to be completed?
This can vary considerably, depending on the events, the course of the voluntary administration. icare is obliged to make a preliminary claims decision within 90 days of receiving the required claims information, depending on the nature of the works. The time to complete a claim will vary depending on the circumstances of the claim, including the size of the claim, how progressed the work is, availability of builders to complete the works, etc.