Investment Property Hack – Minimise Maintenance Costs

The PMC has discussed the pros and cons about buying new versus established properties.  Here we explore a way you can minimise your maintenance costs in all new properties through statutory home warranty insurance.

 

WHAT IS STATUTORY WARRANTY INSURANCE?

Besides your cherished and loved ones, your property investment/s are one of the biggest assets which you will want to protect. When purchasing a new property be aware that it is mandatory for the builder to take out home warranty insurance to cover structural and non-structural defects for a period of 6 years 6 months.

Once building work is finished, the home warranty insurances may help if:

•  the builder fails to rectify defects
• the builder becomes bankrupt or goes into liquidation
• the builder is in another country or deceased
•  the building suffers from subsidence or settlement.

 

WHAT IS DEFECTIVE BUILDING WORK

Defective building usually falls into 2 categories:

• Structural – e.g. leaking roof, leaking shower, health and safety issues
• Non-structural – e.g. sticking doors or windows, minor cracking of plasterboard.

There is also the ability to justify associated consequential damage caused by the defective building work.

In order to successfully lodge a complaint for assessment of the defective building work, legislative time frames are in place.

1.      Structural Defective Work – The owner can lodge a complaint within 6 years 6 months from when the work is completed and within 12 months of noticing the defect.

2.      Non-structural Defective Work – Generally the builder can provide a 6 or 12 month statutory warranty from the date of practical completion for non-structural defects.

Typically, this is part of the contract conditions for new home construction. If the owner notices a defect within the warranty period, they can request (in writing), that the builder fix the defect.

DID YOU KNOW?

The builder may have also taken out additional cover to be available to fix defects.  Additional cover may also cover:·         reimbursement of reasonable cost of alternative accommodation·         reimbursement of removal and storage costs.The insurance policy which was originally taken out by the builder will outline the conditions and monetary limits.  Make sure you have checked the original building contract and insurance policy for your prospective brand new property purchase.Sounds too hard?  Our team of new property experts knows exactly what to look for to maximise your investment.  We perform the checks and balances to safe guard you against common pitfalls.  Let us show you some really great new properties hot off the shelf from some fantastic developments.  At The PMC we make sure that you are covered!