NSW: Q&A How Many Storeys is my Building (Home Warranty Insurance)?

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This article about NSW Home Warranty Insurance and whether a basement car park counts as a level has been written by Christopher Kerin, Kerin Benson Lawyers.

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• QUESTION: Doing a web search I discovered that the builder/developer has gone into administration. Can you please tell me what ramifications this has for an owner?
• QUESTION: We moved into our newly built apartment in December 2017. There are 20 apartments on 3 levels above ground and our garages basement underneath. Is this considered a 3 or 4 level apartment block?

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Question: Doing a web search I discovered that the builder/developer has gone into administration. Can you please tell me what ramifications this has for an owner?

I am looking at buying a strata villa that is let out as holiday accommodation. The villas are single story and were built 2 years ago.

Doing a web search I discovered that the builder/developer has gone into administration.

Can you please tell me what ramifications this has for an owner?

Answer: There is no direct impact except for the fact that if there are building defects you may need to make a claim on the home warranty insurance policy rather than pursue the builder/developer.

This post appears in Strata News #419.

Question: We moved into our newly built apartment in December 2017. There are 20 apartments on 3 levels above ground and our garages basement underneath. Is this considered a 3 or 4 level apartment block?

Answer: I presume this question is posed for the purposes of determining whether home warranty insurance was required or not.

I presume this question is posed for the purposes of determining whether home warranty insurance was required or not.

From the question, it appears that the building is three storeys in height for the purposes of an exemption from insurance under the Home Building Act. That is, home warranty insurance was required.

Regulation 56 of the Home Building Regulation 2014 addresses this issue as follows:

56 Exemptions from insurance for multi-storey buildings

1. A person who does, or enters into a contract to do, residential building work relating to the construction of a multi-storey building is exempt from the requirements of Part 6 of the Act in respect of that residential building work.
2. A developer who enters into a contract for the sale of land on which residential building work relating to the construction of a multi-storey building has been done, or is to be done, is exempt from the requirements of section 96A of the Act in relation to that residential building work.
3. The exemption in subclause (2) does not apply if the residential building work was contracted to be done before the commencement of this clause and, at the time the contract was entered into, the work was required to be insured.
4. The exemption in subclause (2) extends to a developer who enters into a contract for the sale of land to the extent that work relating to the building’s construction was contracted to be done before the commencement of this clause, if, at the time that work was contracted to be done, it did not relate to the construction of a multi-storey building for the purposes of the Home Building Regulation 2004 .
5. This clause does not apply in respect of residential building work commenced before 31 December 2003 (being the date of commencement of clause 57BC of the Home Building Regulation 1997, the corresponding earlier version of this clause).
6. If a developer entered into a contract for the sale of land on which residential building work in relation to a multi-storey building was proposed to be carried out but was not commenced before 31 December 2003 and the developer complied with clause 61 in relation to that contract–

   1. the provisions of the contract complying with clause 61 (b) (ii) and (iii) cease to have effect, and
   2. the developer must notify the purchaser of the land in writing that they no longer have effect and of the exemption from the requirements of Part 6 of the Act in relation to the residential building work conferred by this clause.
7. In this clause–
   
   “multi-storey building” means a building–
   1. that has a rise in storeys of more than 3, and
   2. that contains 2 or more separate dwellings.

   “rise in storeys” has the same meaning as it has in the Building Code of Australia of the National Construction Code Series.

   “storey” has the same meaning as it has in the Building Code of Australia of the National Construction Code Series.

The BCA defines a storey as:

Storey means a space within a building which is situated between one floor level and the floor level next above, or if there is no floor above, the ceiling or roof above, but not—

1. a space that contains only—

   1. a lift shaft, stairway or meter room; or
   2. a bathroom, shower room, laundry, water closet, or other sanitary compartment; or
   3. accommodation intended for not more than 3 vehicles; or
   4. a combination of the above; or
2. a mezzanine.

This post appears in Strata News #327.

Have a question about NSW Home Warranty Insurance and the amount of storeys in your building or something to add to the article? Leave a comment below.

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Christopher Kerin
Kerin Benson Lawyers
P: 02 8706 7060
E: [email protected]

Read next:

• NSW: Home Building Act Statutory Warranties – What is the Two Year Warranty for Non Structural Defects Worth?
• NSW: Update on the 2% Bond Scheme

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