Changes to Home Warranty Scheme for multiple dwellings and duplexes
Additional changes to notional pricing as part of the Queensland Home Warranty Scheme have now been introduced (effective from 2 December, 2016) to make premiums fairer for those who own apartments and units, and for those who do work for them.
Notional pricing is an alternative premium calculation method which applies to duplexes, multiple dwellings, work for two or more detached dwellings and work to common areas for these buildings. This method results in a higher premium than for a detached dwelling and reflects the inherent higher claim risk for this work. Notional pricing is calculated by dividing the total contract value by the number of units, selecting the premium for this amount and multiplying the amount by the number of units in the building. Notional pricing has been in existence since 1992.
As of 2 December 2016, notional pricing no longer applies when certain types of building work are carried out for common property in or on a multiple dwelling or duplex.
The types of common property work to which notional pricing will no longer apply are those types of work which, when performed on their own, were not covered by the Scheme prior to 28 October 2016. This means that the types of work in or on common property for a multiple dwelling or duplex that will no longer attract notional pricing include:
- solid plastering
- fire protection work
- physical termite management work.
Other types of work such as internal wall and floor tiling, replacing flooring, replacing a roof and drywall plastering, which have been covered by the Scheme for more than a decade, will continue to attract notional pricing where the value of the work exceeds the relevant monetary threshold under the current Scheme. (The monetary thresholds are found in Part 5 of the Queensland Building and Construction Commission Regulation 2003 and are set at zero dollars, $5,000 or $20,000 depending on the nature of the work.)
If the contract includes an element of work which would have been covered by the Scheme when performed on its own prior to 28 October 2016, it will continue to attract notional pricing if the total value of the contracted work exceeds the relevant monetary threshold.
For more information about notional pricing visit How premiums for units and multiple dwellings are calculated.