WA Owner-Builder HII Before Sale: The 7-Year Rule

According to WA Government guidance dated 20 May 2025, a Western Australian owner-builder who intends to sell within seven years from the time the building permit is granted must obtain home indemnity insurance (HII) and provide the certificate to the prospective purchaser before settlement occurs (figures checked 1 October 2026). The same guidance states that residential building work over $20,000 must be covered by HII and, for construction of a principal place of residence, directs a check of a builder’s statutory declaration covering the previous six years.

Does the seven-year rule decide whether HII was required for the build?

No. The WA Government sets out the building-work requirement and the owner-builder sale requirement separately:

Question	Requirement
Was HII required for the residential building work?	Residential building work over $20,000 must be covered by HII.
Does the proposed sale create an owner-builder requirement?	An owner-builder intending to sell within seven years from when the building permit was granted must obtain HII.
When must the purchaser receive it?	The HII certificate must be provided to the prospective purchaser before settlement occurs.
Is a statutory-declaration check also relevant?	For construction of a principal place of residence, check the builder’s declaration concerning permits obtained during the previous six years for work for which no insurance was required.

The seven-year sale rule should not be treated as a substitute for the separate requirement to insure qualifying residential building work.

Who must obtain and provide the certificate?

For residential building work over $20,000, the builder must obtain an HII certificate for the proposed work before claiming payment from the owner or commencing work under the contract. The builder must provide a copy to both the owner and the permit authority as part of the building approval process.

For the later sale, the owner-builder must obtain HII if the property is to be sold within seven years of the building permit being granted. The certificate must then be provided to the prospective purchaser before settlement occurs.

The practical sequence is:

1. Record when the building permit was granted.
2. Confirm whether the owner-builder intends to sell within the following seven years.
3. Obtain the HII certificate for the proposed work.
4. Provide the required copies during the building process.
5. Ensure the prospective purchaser receives the certificate before settlement.

Which document should be checked?

For residential building work over $20,000, the permit authority must check that the builder has supplied the correct HII certificate and that:

• it is watermarked;
• it was issued by QBE;
• its details match QBE’s Builders Warranty Insurance Certificate Register; and
• it has not been replaced by an HII eligibility certificate or a construction/public liability insurance certificate.

QBE’s register can be used to confirm that the certificate was issued by QBE and to match its details against QBE’s records. Building and Energy can also advise owners and builders about approved HII providers.

How does the principal-place-of-residence declaration check work?

For construction of a principal place of residence, check with Building and Energy that the builder made a statutory declaration to the Building Commissioner. Under section 25(B)(3) of the Home Building Contracts Act 1991, the declaration verifies that the builder had not obtained a building permit during the previous six years for residential building work for which no insurance was required.

Item to confirm	What the WA Government describes
Type of construction	The builder’s principal place of residence
Who makes the declaration	The builder
Who receives it	The Building Commissioner
What it verifies	No building permit was obtained during the previous six years for residential building work for which no insurance was required
Relevant provision	Section 25(B)(3) of the Home Building Contracts Act 1991

This six-year declaration check is separate from the owner-builder’s seven-year sale rule. It does not replace the obligation to provide the HII certificate to a prospective purchaser where that sale requirement applies.

If there is uncertainty about whether a project is exempt under the Home Building Contracts (Home Indemnity Insurance Exemptions) Regulations 2002, check with Building and Energy.

Who can answer questions about HII?

Building and Energy can provide HII information, advise about approved providers and help resolve uncertainty about an exemption claim.

• Phone: 1300 489 099
• Email: bcinfo@demirs.wa.gov.au

Before relying on the insurance arrangement, check the current WA Government regulator page and the relevant policy’s Product Disclosure Statement (PDS). This is general information, not financial or legal advice.

Sources

• Home indemnity insurance – a reminder about your obligations — WA Government

FAQ

When does the seven-year period begin?

It begins from the time the building permit was granted, rather than from contract signing.

Must the purchaser receive the certificate before settlement?

Yes. The HII certificate must be provided to the prospective purchaser before settlement occurs.

Does the six-year statutory declaration replace the seven-year sale requirement?

No. The six-year declaration is a specific check for construction of a principal place of residence. The seven-year rule governs HII for an owner-builder intending to sell within that period.

Does HII cover every faulty or unsatisfactory building work claim?

No. HII protects against loss of the deposit or other financial loss where the builder cannot complete the work or meet a valid claim because a relevant circumstance exists in relation to the builder. Examples of relevant circumstances include an individual builder dying, disappearing or becoming insolvent, or a corporation ceasing to exist or becoming insolvent.

Can an HII eligibility or public liability certificate replace the HII certificate?

No. The WA Government says the permit authority must ensure that another insurance document has not been supplied instead of the required HII certificate.