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Tag Archive for: NSW home building laws

How to Choose the ‘Right’ Builder for Your Project - Magico ConstructionsMagico Constructions

How to Choose the ‘Right’ Builder for Your Project

in Articles

Selecting the right Builder is crucial to the success of your building project.

Without the right Builder, projects risk running over budget, being delayed and worse of all, being ridden with defects.

Below are some of the things you should consider when considering a Builder.

  • What is the company’s and staff’s background history?
    • Is it a relatively new building company? If so, then it is worth considering what experience the Builder may have prior to starting the company. The benefit of choosing an experienced and well-educated Builder is that they will have foresight to identify potential problems with your projects which will help eliminate costly variations and time delays.
  • Client testimonials can be misleading.
    • When reading past client testimonials, be wary of the authenticity and make sure to cross-check things. For example, you may cross check a testimonial to the project and ask to visit that project/site so that you can meet whoever left the testimonial. Not all client testimonials may be an accurate assessment of the Builder. (Similar to how online reviews may not always tell the real story)
  • NEVER choose the Builder who provides you with the lowest quote.
    • Generally speaking, you should NEVER choose the Builder who provides you with the lowest quote. The famous saying of ‘you get what you pay for’ is especially true when it comes to construction.
  • Ask to visit their current job site.
    • We are firm believers that you are only as good as your last project. Which is why we often encourage our potential clients to visit our most current job sites. It is not surprising that everyone has had at least one ‘outstanding’ project in their resume, but what distinguishes a great Builder from the norm is the ability to consistently deliver good-quality construction projects.
  • How systemised and organised is the Builder?
    • Ask how the Builder manage their projects and what systems and processes they have in place to ensure quality control. A well organised Builder will be using some sort of cloud-based project management tool and should have processes and standards in place. (Which could be in the form of having ISO-certification for Quality Control, Work Health & Safety and Environmental Management System)
  • Professionalism
    • Whilst many Builders claim to be a ‘professional’, few manage to really uphold this sense of professionalism. A true professional should be capable of arriving to meetings on time and conduct themselves in a professional manner in all forms of communication. This means no casual smiley-face emojis, no shorten forms of ‘thanx’ or ‘cu’, no penny-pinching in cutting costs to do with having a company website or proper email address.
  • Check that validity of their licenses and insurance
    • If your residential building project involves less than 4 storeys, it is imperative that your Builder is capable and eligible for HBCF (Home Building Compensation Fund). Did you know that you can conduct a search regarding the validity of the Builder License and whether there are any pending court cases online?
      Visit: https://www.onegov.nsw.gov.au/publicregister/#/publicregister/search/Trades
  • Does the Builder ‘care’ about your project?
    • Chances are if you’re speaking to a large volume-based builder, your project will be treated as just another drop in the bucket to them. If the Builder truly cares about your project, they should be pro-active about scheduling site inspections, meetings with you to understand the goals of the project and display enthusiasm and interest.
  • Has the Builder done their ‘homework’ and do they ‘understand’ the project?
    • The easiest way to distinguish this is to see whether the Builder has mentioned any site-specific risks or restrictions for the project. Another way is to gauge this is to see whether the Builder was able to reflect your desired goals and expectations for the project.

The reality is that selecting the ‘right’ Builder for your project is a complex process which involves weighing multiple factors across the board before making the final decision.

If you are someone with limited/no previous construction knowledge, it is probably in your best interest to seek assistance from an experienced professional (such as an architect or project manager) during the project’s tender review stage.

Although this will mean investing a bit of money up front, we strongly believe that it is well worth the investment as it could easily save you thousands of dollars in variations later down the track.

If you have an upcoming project which you would like us to help with, simply fill in our contact form HERE.

Prefer to speak with us directly? Book a free call with our team today and get expert guidance tailored to your needs.

https://magicoconstructions.com/wp-content/uploads/2025/04/choose-1.jpg 600 900 Magico Constructions https://magicoconstructions.com/wp-content/uploads/2026/03/magico-constructions-logo-new.png Magico Constructions2025-04-04 05:12:032025-12-12 06:29:18How to Choose the ‘Right’ Builder for Your Project
What is HBCF? - Magico Constructions Magico Constructions

What is HBCF? Home Building Compensation Fund Explained

in Articles

So what is HBCF and when is it legally required for a project to have HBCF in place?

In short, HBCF stands for Home Building Compensation Fund. Prior to the 15th of January 2015, it was known more commonly as ‘home warranty insurance’. (Some people still refer to it as home warranty insurance to date)

It is compulsory for all residential projects to have HBCF in place when the contract work is over $20,000 and under 4 storeys high.

Most people seem to have a false understanding that HBCF is meant to serve as some sort of ‘insurance’ for their building project.

Whilst it is true that it serves to cover and protect the client in certain events (which we will cover in detail below).

For most people, it is simply a fee you must pay which provides you little to nothing in return.

It used to be that Builder could obtain HBCF from various insurance companies such as GIO, Allianz, QBE, and Suncorp, just to name a few. (List of past providers can be found here)

However, on the 1st of January 2018, the NSW Home Building Compensation Scheme took into effect. There is now only one company that provides HBCF, which is icare.

The irony of the name ‘icare’ is one that most Builders probably can relate to and appreciate.

What does HBCF Cover?

As iCare phrases it: Certificate of Insurance issued by icare HBCF compensates homeowners for losses arising from defective and incomplete work where the builder or tradesperson:

  • Becomes insolvent/bankrupt
  • Dies
  • ‘Disappears’
  • Has their license suspected by NSW Fair Trading

So as you can see, for most people, these events won’t really be applicable to them.

In my discussions with other Builders, most feel that all HBCF really serves to do is to bail out the incredibly dodgy Builders and extreme cases.

However since it is a legal requirement for projects under 4-storeys to have in place, it is an expense that you must factor in when constructing.

Unlike comprehensive car insurance which will cover you for all repairs (provided you pay for the excess fee and premium), HBCF will not cover all expenses.

As of writing this, HBCF only provides a maximum cover per dwelling of:

  • $300,000, if issued before 1 February 2012
  • $340,000 for all other policies.

So in the event that your project costs more than the above amount, you will need to come up with the funds yourself.

How is HBCF Calculated?

Similar to comprehensive car insurance, the cost for HBCF will vary dependent on the ‘type’ of the project and the construction cost.

HBCF is usually calculated based on a percentage of the construction cost. However, for different project types (such as homes, duplexes, townhouses) the percentages vary.

There is also either a discount or loading applied based on which Builder you select for the project.

Example 1:

A new single dwelling project (C01) of the contract value of $2,000,000 equates to:

Base premium:$19,000.00

GST:$1,900.00

Stamp Duty (9% on Base + GST):$1,881.00

TOTAL:$22,781.00

Example 2:

A new duplex (2 dwellings) project (C02) of the contract value of $2,000,000 equates to:

Base premium:$19,000.00

GST:$1,900.00

Stamp Duty (9% on Base + GST):$1,881.00

TOTAL:$22,781.00

Example 3:

A new multi-dwelling (4 dwellings) project (C03) of a contract value of $2,000,000 equates to:

Base premium:$57,200.00

GST:$5,720.00

Stamp Duty (9% on Base + GST):$5,662.80

TOTAL:$68,582.80

(TOTAL for each dwelling)$17,145.70

Note: This is based on the assumption of there being 0% discount and loading for both examples.

So as you can see, the cost for HBCF varies between single dwellings and multi-dwellings.

In the instance of example 3. Whilst each dwelling is paying less for the HBCF covers the total cost of the HBCF. It ends up costing over triple the amount when compared with a single-dwelling project which has the same construction cost.

Another thing to keep in mind is that at the end of every construction project, the Builder must notify icare of the ‘actual’ cost for the project.

For instance, if the Builder had quoted $ 2 million dollars for a single dwelling project and it ended up costing $ 2.5 million dollars. The Builder will need to inform icare of the actual cost of the project and pay the additional cost.

Book a free call with our team today and get expert guidance from a licensed and qualified builder.

https://magicoconstructions.com/wp-content/uploads/2025/04/HBCF-1-1.jpg 600 900 Magico Constructions https://magicoconstructions.com/wp-content/uploads/2026/03/magico-constructions-logo-new.png Magico Constructions2025-04-04 05:06:292025-12-12 06:29:30What is HBCF? Home Building Compensation Fund Explained
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