Western Australian Builder Penalised for Inaccurate Completion Notices

The Building Services Board imposed a $5,000 fine on Sovereign Building Company Pty Ltd, based in Balcatta, after determining that the contractor engaged in misleading conduct under Western Australia's builder registration regime. An investigation by the Department of Local Government, Sport and Cultural Industries' Building and Energy division revealed that between 2021 and 2024, Sovereign submitted 25 notices of completion to QBE Insurance for building work at six development sites. These notices were lodged despite the projects not having reached practical completion at the time.

QBE Insurance requires completion notices as evidence that each site has achieved practical completion before extending additional HII capacity to builders for further projects. By submitting these forms prematurely, Sovereign's notifications did not accurately reflect the actual stage of construction. Consequently, QBE issued HII policies based on information that was subsequently found to be inaccurate.

In determining the sanction, the board considered the company's cooperation during the investigation, its acknowledgment of the conduct, and the absence of prior disciplinary matters. However, the case underscores the broader implications of such practices within the construction industry.

Daniel Kearney, Executive Director of Building and Energy, emphasized that builders must only submit completion notices when works have genuinely reached practical completion. This ensures that insurers can accurately assess the home indemnity insurance facility available to the builder. Premature or inaccurate documentation can lead to misinformed decisions by insurers, potentially resulting in inadequate coverage and increased risk exposure.

This incident serves as a stark reminder for builders and construction companies about the importance of adhering to regulatory requirements and maintaining transparency in all documentation processes. Accurate reporting not only upholds the integrity of the construction industry but also ensures that homeowners are adequately protected under HII policies. Builders are encouraged to implement robust internal checks and balances to prevent similar occurrences and to foster trust with both regulatory bodies and clients.