Home guarantees create headaches
Owners of newly built properties are being told there are backup options if the guarantees backing their homes fall over – but they will come at a cost.
Thousands of recently built homes are covered for shoddy building work by Builtin’s 10-year Homefirst Builders Guarantee, which is backed by CBL Insurance.
But CBL was put into interim liquidation last month and said it could not pay claims.
Platinum Homes clients Teresa Cook and her husband, Roger, have been caught up in the insurer’s failure.
They are still waiting for their house to be built with Platinum Homes in Levin, and are living on-site in a caravan.
They sold their house in Tawa, Wellington, when they signed an agreement to have their new brick-and-tile home built in October 2016.
The Cooks took out the insurance policy, which was intended to give them peace of mind through the drawn-out build, but were worried what would happen without CBL to honour it.
There is only $53,000 left of the $345,000 construction price to pay but the house is still not inhabitable.
There’s no kitchen, the decorating hasn’t been done, painting work is still to be finished and there is no carpet, among other problems.
Platinum Homes chief executive Shaun Riley said his firm was waiting for a report from the liquidator to get a clearer idea of its next steps.
If CBL was not going to be in a position to handle claims in future, another option was available, he said.
‘‘This came as a shock to us as CBL is a publicly listed company that has been around a long time. There’s nothing in their last annual report or any disclosures that would have caused concern until a few weeks ago.
‘‘We are working on this now to see what options are available and will be in contact with our clients once we understand what these options are.’’
Jim Rickard, of Builtin, said policyholders with building guarantees that were less than 12 months old would be able to access a new provider, at an additional cost.
‘‘We’re also in talks with insurers to try and find a solution for homeowners with older guarantees.’’