Apartment house Grand Reve takes out insurance against construction defects

Kassis felt this was a turning point for NSW home buyers.

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“While the insurance policy was expensive at almost $3 million and we had to jump through so many hurdles to get it, it gives people more security and an extra level of comfort in what they buy.

“The Toplace building leaves a bad taste and it is a shame to see what is happening but it will raise awareness of our building and our insurance.

“It gives people confidence while also letting other developers realize that not having insurance is crazy.”

The insurance policy is the latest coup in a series of reforms launched by Chandler and Victor Dominello, the NSW Government’s Minister for Fair Trade, following a string of horror stories about development failures, including Mascot Towers, Opal Tower and separate concerns about flammable cladding, were initiated.

Chandler said it took hard work to get to a point where rated developers and builders got insurance, but said it was worth all the pain.

The Toplace group was contacted for comment on Skyview but did not respond in a timely manner.

For Grand Reve, the insurance was already proving to be a marketing advantage, with about 50 percent of the homes selling, said Adam Sparkes, deputy director at marketer McGrath Projects.

“Having the new insurance sets it apart … and gives consumers confidence and confidence,” he said.

“If unforeseen building defects become apparent within the 10-year period from handover, these will be promptly remedied by the insurance company.”

Insurance broker Joe Khoury said inspections of the key areas where deficiencies are likely to occur, particularly fire sleeves and waterproofing, meant any construction issues could be addressed and rectified immediately.

“The risk of defects occurring later is greatly minimized,” he said. “We’ve had a lot of positive feedback…many buyers have said they’ve been waiting for a policy like this. It’s still early days… but I think others will apply now too.”

To date, Resilience Insurance has issued five policies and is pricing another 42 for development. Over 220 ratings are on the train through the iCIRT system.

Georges, co-developer of Grand Reve, said inquiries from buyers have increased since they started promoting the insurance.

“There has been a lot of negativity about buying homes in Sydney but although the insurance means an additional cost for us it gives people peace of mind when buying. So this is good for us and good for the industry.”