QHWIS Non-Completion Cover: The 3-Month Termination Window (QLD)

What it is

The Queensland Home Warranty Insurance Scheme (QHWIS) is the statutory insurance that protects homeowners when a residential builder fails to complete contracted work, dies, becomes insolvent or has their licence cancelled. The scheme is administered by the QBCC under Part 5 of the QBCC Act 1991. It is not a normal commercial insurance product. The homeowner pays a single premium at the start of the contract and cover runs from that point.

Non-completion is one of three claim heads under QHWIS. The other two are defects in the first year of completion and major structural defects for six years and six months from completion. Non-completion has the tightest timing rules of the three. Missing the window is fatal to the claim.

When non-completion cover applies

Non-completion cover applies to a residential construction contract over $3,300 where:

• The contract was lawfully terminated by the homeowner because of the builder's default, or
• The builder has died, or
• The builder is a company that no longer exists, or
• The builder's QBCC licence has been cancelled for failure to meet financial requirements

If none of those triggers are met, there is no non-completion claim. A homeowner who simply gives up on a slow builder cannot lodge a non-completion claim.

The 3-month termination window

Two timing rules apply in sequence.

Rule 1: Two years from start

If work has started, the contract must end within 2 years of the start date. If work has not started, the contract must end within 2 years of contract signing. Cover does not extend beyond that 2 year envelope. A contract that drags on for three years with no termination is uninsured for non-completion even if the builder later defaults.

Rule 2: Three months from termination

Once the contract has lawfully ended (by termination, builder death or licence cancellation), the homeowner has 3 months to lodge the non-completion claim with QBCC. Lodging after 3 months is out of time and QBCC will reject the claim.

This 3-month window is the single most missed deadline in the QHWIS system. A homeowner who terminates and then waits to see what the builder does next can lose cover entirely.

What QBCC actually pays

Maximum non-completion cover is $200,000 standard or $300,000 with the optional additional cover purchased at contract start. The cover responds to:

• Additional completion costs (the gap between the original contract price and the replacement builder cost)
• Repair of defective work already done by the original builder
• Reimbursement of the insurable deposit if work has not yet started

QBCC usually settles a non-completion claim by engaging a replacement builder to finish the job. Cash settlement is the exception, not the default. The homeowner does not get to choose how the claim is resolved.

What this means for builders

A builder may think non-completion cover is the homeowner's problem. It is not. Every QHWIS claim paid out by QBCC becomes a recovery action against the builder. The QBCC can:

• Recover the claim cost from the builder by court action
• Use the claim history as evidence in MFR enforcement
• Cancel the builder's licence with a 3 year exclusion period if claims are not paid back

Where TradeLens fits

TradeLens monitors job duration and the risk that a contract is approaching the 2 year cover envelope. If a job is heading for delay beyond cover, TradeLens flags it so the builder and homeowner can talk about an extension or termination before insurance is lost. The cheapest way to avoid a QHWIS claim is to finish the job.

Practical advice for residential builders

• Never let a fixed-price contract drift past 18 months without a written extension and notification to the homeowner
• If insolvency looks likely, advise the homeowner of their QHWIS rights in writing
• Keep the QBCC certificate of insurance on file with the contract for every job
• After a termination, document the date in writing and confirm receipt with the homeowner. The 3-month clock starts on that date
• If a claim has been paid out on a previous job, expect QBCC scrutiny on the next MFR return

A non-completion claim is the most visible failure point in QHWIS. It is also the most preventable. Every step that keeps the job moving keeps the claim out of QBCC.