The Tasmanian Government says, following the collapse of another building company, that it has stepped in to provide cover for people affected by failures in the sector while a new home warranty insurance scheme is being established.

The Government released draft legislation to re-introduce a scheme at the end of last year after an increase in builder failures. Problems have continued with Multi-Res Builders placed in liquidation on Sunday.

Minister for Workplace Safety and Consumer Affairs Elise Archer said yesterday that the Government is providing a Financial Assistance Package during the interim period ahead of the new scheme starting, with support based on the assistance they would have received if the scheme had been in place.

Property owners with an incomplete building project are able to claim for their loss up to 20% of the contract price, up to a maximum of $200,000 through the package.

Owners who have paid deposits but where work is yet to commence are able to claim for their loss up to 5% of their contract price, in line with the statutory protections that already prevent deposits beyond 5%.

Submissions on the Residential Building (Home Warranty Insurance) Amendments Bill closed on March 31.

“I appreciate the significant interest and broad support that was received in consultation on this important bill, including from building industry stakeholders and the wider Tasmanian community,” Ms Archer said.

“The bill will mandate home warranty insurance for residential building work in Tasmania and ensure homeowners are covered for loss caused by incomplete or defective work should unforeseen circumstances occur.”

The bill also complements other changes being introduced to strengthen consumer protections within the building regulatory framework, she says.

Tasmania became the only state without some form of home warranty insurance after a previous scheme was abolished in 2008.