HOMEOWNERS STILL IN LIMBO

The Tasmanian Greens today called on Consumer Affairs Minister, David Llewellyn, to amend the Housing Indemnity Amendment Bill 2008 in the Upper House to provide a retrospective opt out option for consumers. Greens Shadow Building Matters spokesperson Kim Booth MP said that a simple amendment to the Bill requiring insurers to refund, on a pro-rata basis, consumers who wish to opt out of the scheme once the Bill achieves royal assent, would enable homeowners currently locked into limbo, to pay the insurance, proceed with the project and then cancel their insurance at a later date if they wished, thereby removing any so called ‘tail risk’ to the insurers and giving back the consumer their hard earned premium dollars. The Greens also called on the Minister to clarify whether he has honoured the commitment made in the State Parliament that he would advertise the changes to legislation that abolishes the compulsory Home Owners Warranty (HOW) insurance scheme and its status to the wider community.

The Greens today supported homeowner Ms Sharon Webb who has been informed that she has to buy $1100 worth of insurance or the Meander Valley Council will not process her home renovation plans, and her call for government departments to be required to provide consumers advice that reflects the expected imminent changes to the law. “It is critical that the government amends the Housing Indemnity Amendment Bill in the Upper House to provide a retrospective opt out provision as it was completely unacceptable for consumers who find themselves in the position similar to that of Ms Webb, who have waited months to line up a builder, and are now in limbo,” Mr Booth said. “Ms Webb’s example illustrates an unfair situation where she has waited months to line up a builder but is now in limbo with work not being able to start on renovations until her plans are processed by the Meander Valley Council, which the Council refuses to do until evidence of the worthless insurance has been presented.” “The amending of the Bill in the Upper House by the government would provide a simple and immediate solution enabling consumers to start their building project with the certainty that they will receive the majority of their worthless premium refunded once the Bill receives royal assent and the insurers will be safe from any perceived ‘tail risk’ liability.” “Although Minister Llewellyn should be applauded for moving to abolish this ‘junk’ insurance he needs to realise that there are consumers out there who are desperate to start building and yet have no idea where they stand, why they are being told to buy insurance that is worthless and how they are going to be able to progress their building works whilst in regulatory limbo,” Mr Booth said.

“We aren’t talking peanuts here, this is insurance which ranges anywhere from $1000 to $3000 plus.” “It is absurd that the insurance companies can still rake in the dollars despite legislation to abolish the scheme being half way through the Parliament.” “It is important to be very clear on the fact that even should a consumer purchase this insurance now, and then the legislation passes the Legislative Council next week, that consumer cannot get a refund, and will have lost up to $3000 or more.” “Therefore it is imperative that Minister Llewellyn not only amends the Bill in the Upper House but also ensures that official public notification, including advertising, is undertaken to advise consumers that these changes are underway and they may want to wait before commencing building related activities that would have required that insurance certificate under the old law.” “The Consumer Affairs Department and local councils need to be provided with a clear advisory brief with which they can inform consumers of these expected and imminent changes, and allow an informed choice to be made.” “Minister Llewellyn committed to advertise the status of housing insurance and the changes that the government were enacting yet I have seen no evidence of that advertising and consumers like Ms Webb are unaware of it.” “The Minister needs to come out today to clear up this mess, ensure that his Department is advising people appropriately, and shed some light on what the process is going forward to provide clarity and security to consumers,” Mr Booth said. Attached: Hansard , House of Assembly, Minister Llewellyn commits to advertising changes to insurance regime, Tuesday 27 May 2008 (1 page): TASMANIAN House of Assembly Hansard Minister Commits to Advertise Status of Housing Insurance Tuesday 27 May 2008 - Part 2 - Pages 37 - 97 HOUSING INDEMNITY AMENDMENT BILL 2008 (No. 20) In Committee … Mr GUTWEIN - I understand what you are saying in regard to the issue of creating something that is ultra vires in the current act. I do understand that, and there is a law that people need to take out this insurance at the moment and by looking at the commencement date, then obviously we do create an issue where we have a current law that is supposed to operate. On that basis and the fact that we cannot obviously change the current law, would you be prepared to advertise that this bill has been passed by the lower House and that it will be before the upper House with the expectation that it will become law in a fortnight from now, so at least those people who are entering into building contracts or looking to sell their property do so in the full knowledge that the circumstances in which they are entering into those contracts may change within a very short time? Would you be prepared to do that? Mr LLEWELLYN - I am happy to do that. I am sure we can advertise in some way. But I would have to be cautious about the time it is passed. One could say that during June or whatever, it is likely that the bill will pass the Chamber and people should be aware of the fact that it may well affect their outcome.

Mr Hidding - Are you the minister responsible for consumer affairs? Mr LLEWELLYN - Yes. Mr Hidding - So the warning could be, the minister responsible for consumer affairs advises that consumers should check with their providers as to whether the signing of the date could be not put down. Mr LLEWELLYN - I do not think I can go that far.

Mr Hidding - I bet you can. Mr LLEWELLYN - Mr Chairman, in answer to that question, all I can do is put out a notice, as minister responsible for consumer affairs, saying that the bill has been passed by the House of Assembly and that ultimately it will be subject to scrutiny in the Legislative Council. Should the bill pass, it will change the way that we deal with issues and people should be aware that is the situation. Mr Hidding - Fair disclosure.

Mr LLEWELLYN - That is right. Mr BOOTH - Thank you, Minister, I think that would be a very important thing to do. It is certainly welcomed by the Greens that you notify them and we will be putting out a media release welcoming the passage of the bill through this House and, no doubt, congratulating you for bringing it through as well… . Tue Jun 2008 02:06 (7 months, 1 week ago)