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Home Owners Warranty – Scope of Work

Sergon Home Owners Warranty Department was engaged by a large Home Owners Warranty Insurer to manage a claim for rectification of Defective Building Works.

The claimant was an Owners Corporation representing the interests of all owners of a Strata Titled complex.
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The Sydney suburb development, comprised of three separate multi-story residential apartment buildings. During the course of the matter, Sergon Building Consultants:

  • Confirmed Insurers acceptance of claimed defects
  • Prepared detailed, accurately measured scopes of works for rectification of accepted defects
  • Agreed the scopes of works with the claimant
  • Sought tenders for reinstatement based on the agreed scope
  • Reviewed tender submissions, and
  • With agreement of the Insurer and claimants, saw a builder engaged for rectification works.

Reinstatement works were progressing smoothly when Claimants lodged a further claim for additional defects at the situation. Sergon Building Consultants re-attended and conducted a review of the additional claimed items, culminating in preparation of and agreement with a detailed measured scope of works for those items. As the reinstatement of the originally agreed defects was well underway a challenge now arose.

  • The Challenge

    • A tender process would now cause delays both to additional works and those already authorised
    • The tender process would introduce others who would never be selected to complete repairs
    • Costs were likely to increase as the rectifying builder became aware he was to be selected as the sole provider of rectification prior to submitting reinstatement cost estimates on additional works

  • The Solution

    In an effort to ensure the reinstatement continued to run smoothly while controlling claims costs on additional items, Sergon Quantity Surveyors completed a site inspection with the rectifying builder, prior to his submission of a quotation for additional works. Utilising the scope of works for additional defects prepared by Sergon Building Consultants, Quantity Surveyors discussed all aspects of the additional works directly with the rectifying builder.

    The builder was acutely aware that an independent observer was now involved in the process. The builder submitted a quotation for additional works at $208,340.00 (Incl. GST). Utilising first principle estimating techniques, Sergon Quantity Surveyors prepared an independent cost estimate which was used to complete an analysis of the builders quote. Quantities Surveyors discussed inaccuracies, high percentages and the occasional double up on quoted items directly with the builder. The rectifying builder agreed with Sergon Quantity Surveyors analysis and agreed to complete reinstatement at their estimated value calculated at $188,919.50 (Incl. GST).

    The outcome was a satisfied claimant who noted scopes were readily agreed, delays did not eventuate as a result of additional items being claimed, and was pleased they could deal with a single rectifying builder whom they trusted. A satisfied builder who increased the value of work he completed at the site at reasonable pre-agreed rates.

    A satisfied Insurer who had a difficult claim resolved without customer complaints, was satisfied that works were scoped accurately and quoted appropriately, recognised that while some additional costs were incurred by engaging other specialists this resulted in claim cost management producing a saving that readily exceeded professional fees.

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