Peering under the floorboards at HomeBond

Q&A:Q EARLIER THIS year, you responded to a reader's query about how to complain against dreadful service and ignored communications over several months to HomeBond.

The cut-off date from which Allianz took over the scheme underwriting is October 31st, 2008, but claims prior to this date appear to have fallen between the floorboards vis-a-vis receiving adequate service from HomeBond.

HomeBond is trying to compel us to utilise the offending builder and his engineer to put the several difficulties right.

However, we have long since lost confidence in this builder. HomeBond has refused to furnish us with a policy schedule of our cover (fully paid for as part of our house purchase consideration). It has refused (after several months) to furnish us with a sign-off letter for our complaint. Consequently, to date we have incurred substantial engineer, surveyor and legal costs without satisfaction.

We have been advised by the Financial Services Ombudsman’s (FSO) office that it has no authorisation to investigate a HomeBond complaint, since HomeBond is not (and has never previously been) regulated by his office in any shape or form.

Recently, since your previous Q&Acoverage of this type of matter, the FSO has reiterated his stated view that he is washing his hands of the entire subject area. I wonder if there is any way to bring about a challenge of the FSO's own defective service here?

On a more general level, do you know who the owners of HomeBond are and what style of business it is? Is it a limited/ unlimited company? What is its financial profile? Where is such information available?

Mr RC, Co Dublin

AA quick overview of the HomeBond website is very reassuring – accepting the significance of home purchase for the individual and the peace of mind available by having insurance cover against structural defects for 10 years after a new home is built.

It all sounds very comforting and, to be fair, I am sure it usually is. But yours is not the first complaint we have had about builders being reluctant to address issues with properties they have constructed. In the boom years they were too busy to worry about any past transgressions and now, presumably, some are struggling so badly that they can ill-afford the outlay on property they assumed was no longer a financial burden to them.

According to the latest accounts of the National Housebuilding Guarantee Company Ltd, which I gather is the company that trades as HomeBond, there is more than €18 million in the kitty to cover its commitments.

Interestingly, its annual accounts suggest setting aside one-third of all registration fees received from builders to cover claims, and that was in 2007, when the boom was ongoing and registration fees amounted to almost €5.8 million.

As you note in your letter, there is a different regime in place depending on whether your house was registered with HomeBond before or after October 2008. Since then, the insurance is underwritten by Allianz, a global player in insurance.

Any complaints are notified to HomeBond. Presuming they are deemed to fall within the parameters of the policy, a claim form is filled in by the claimant and HomeBond sends a technical inspector out to examine the problem and ascertain the work that needs to be done. HomeBond then issues payment.

In theory it should work well enough and, for what it is worth, HomeBond and Allianz are both registered with and regulated by the Irish Financial Services Regulatory Authority.

Claims on properties whose construction was registered with HomeBond before October last year can be more fraught.

Most particularly, claimants in such cases are obliged to deal in the first instance with the builder. As soon as you come across a “major defect” within the terms of the policy schedule, you need to contact the builder.

The builder must investigate the complaint and reply to you within a reasonable time[my italics].

If they do not reply within a reasonable time or you are dissatisfied with the reply[my italics], you need to contact HomeBond at its registered address and request a form to make your claim.

Return the form with any other documents requested and HomeBond says on its website that it will investigate the complaint.

In your circumstances, it appears clear that you have exhausted your interaction with the builder and you should now engage directly with HomeBond, as per the terms it set out on its own website. It does, to my lay mind, seem unreasonable that HomeBond should expect you to allow a builder to undertake repairs when you have no faith in, or cordial relationship with, that builder.

You will have to look at your policy schedule but you could face the prospect of pursuing HomeBond through the legal process.

A separate issue is regulation. My understanding is that, before October 2008, the scheme was not underwritten by an outside insurer and it was not regulated by the Financial Regulator or anyone else.

As to who owns HomeBond, it is very difficult to get a precise answer. Certainly HomeBond is owned, in the first instance, by the National Housebuilding Guarantee Company, which was established in 1977. It is a limited company without share capital, which means it has no listed shareholders.

There are two associated companies: HomeBond Technical Services Ltd and HomeBond Insurance Services Ltd. Both share an address and company officers with the Construction Industry Federation.

The only answer I have received to direct queries as to who owns HomeBond is that “it was set up by the construction industry”.

It is unclear, deliberately so, in my opinion, whether this means the Construction Industry Federation or some other coalition within the sector.

Having said all that, HomeBond is clear that there should be no issue with you receiving a policy document. You should contact Eugene Farrell, the company secretary and a director of both HomeBond and its parent company, at Confederation House, Canal Road, Dublin 6.

Finally, I cannot see any way of challenging the Financial Services Ombudsman. He can only cover issues that come within his remit. If HomeBond is not one of these, there is nothing he can do.

Please send your queries to Dominic Coyle, QA, The Irish Times, 24-28 Tara Street, Dublin 2, or by e-mail to dcoyle@irishtimes.com