A builder’s failure to take out mandatory home indemnity insurance (HII) left a Dudley Park resident $132,000 out of pocket when a renovation was left incomplete, WA’s building regulator has told Mandurah Magistrates Court.

Following prosecution by the Building Commissioner, former registered building contractor Peter John Edmonds (BC8225 expired; BP8225) entered a written guilty plea for breaching WA’s home building contract law by performing residential building work without obtaining HII, despite being eligible to take out these policies.

The law requires a builder to purchase an HII policy prior to commencing or accepting payment for residential building work valued at more than $20,000. HII protects homeowners by providing up to $40,000 for a lost deposit and up to $200,000 to address defective or incomplete work if the builder dies, disappears, becomes insolvent or loses their builder registration on financial grounds.

The court heard Mr Edmonds entered into three contracts with the homeowner in 2020 and 2021 for various work including renovations valued at $96,213. He did not take out HII policies for these contracts prior to starting work or at any other stage.

The Building Commissioner’s lawyer told the court the homeowner later lodged complaints about the work. As a result, the State Administrative Tribunal (SAT) ordered Mr Edmonds to pay more than $132,000, which remains unpaid.

Mr Edmonds suffered a serious injury and was unable to finish the project. He eventually became bankrupt. The court heard that if HII had been in place, the homeowner could have claimed for the outstanding SAT order.

On 16 August 2024, Magistrate Leanne Atkins handed down a fine of $2,000 for the HII offence and awarded costs of $504.30, noting Mr Edmonds’ early guilty plea but describing the offending as “serious” and resulting in “significant financial loss” for the homeowner. Her Honour said the building industry should note there was “no excuse” for failing to take out the requisite HII policies.

Building Commissioner Saj Abdoolakhan said the case was a stark reminder of why HII is mandatory.

“If this insurance was in place as it should have been, the homeowner would have been protected from losses up to $200,000 following the builder’s bankruptcy," Mr Abdoolakhan said. 

“As a registered building contractor at the time of the work, this builder was well aware of the HII obligations. On this occasion the court has decided to impose a fine of $2,000, which is 20 per cent of the maximum penalty available.

“If your home building work project is valued at more than $20,000, your builder must provide you with a copy of the HII policy. If you haven’t received this, ask your builder or check the details at QBE’s online certificate register.”

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Media contact: BEmedia@demirs.wa.gov.au