For many years, the FMB has been working with the Department of Communities, through NIHE, to support members doing grant aided works, with the provision of insurance-backed warranties.
We appreciate this work is vital for the clients but can be challenging for contractors to complete. Increased material costs and bureaucracy in the system have meant frustration for FMB members. FMB Insurance and NI staff have been in close discussions to see improvements and funding to this scheme based on the feedback you provided, which we are hopeful will see an improved system. In the short term some changes have come in.
1. Warranty Bond upper limit has increased from £5,000 to £10,000
There has been a recent change in the Housing Executive’s policy regarding the need for a warrantied builder to be employed to carry out works.
For grant-aid works costing less than £10,000 the NIHE no longer require applicants to have a warranty on the job. Please note, if the approved cost of the eligible works (excluding VAT) exceeds £10,000, the chosen builder will be required to provide a warranty bond when work starts.
2. If I need a warranty for a job, how do I access this?
There is now a two-step process in place. Work-in-progress elements of work can be covered under a Deed of Guarantee, available via FMB Insurance. Post-completion elements of cover are currently being placed via QualityMark, but it is important to check that members meet their application criteria, including passing financial checks and holding the correct insurance for their company.
A couple of reminders;
- For NIHE to approve the warranty and make payment for the grant aided works, the documentation must come via FMB Insurance with a covering letter.
- Remember to place projects on cover prior to starting work. Retrospective warranties cannot be placed.
What about moving forward?
We are working in consultation with the Housing Executive to support them in reviewing the options available, in view of other warranty bond providers withdrawing from this market later in the year.
Additionally FMB Insurance are working within the insurance industry to discuss the insurance of this type of work moving forward.
Further information will follow.
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