Changes to Victoria's building laws come into effect on 4 July 2016 and further changes are on the way

Construction Law eBulletin - 1 July 2016

Summary

Earlier this year the Building Legislation Amendment (Consumer Protection) Act 2016 (Vic) was passed.

This legislation introduces a number of changes to the regulation of building work in Victoria and aims to enhance consumer protection for domestic building work. Some of these changes will come into effect on 4 July.

Builders, building surveyors and others involved in the building industry in Victoria should be aware that the legislation also introduces other significant changes which have not yet come into effect, and that the Victorian Government has flagged even further changes.

In this eBulletin, we discuss the coming changes.

 

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The Building Legislation Amendment (Consumer Protection) Act 2016 (Vic)

Earlier this year the Building Legislation Amendment (Consumer Protection) Act 2016 (Vic) was passed in Victoria.

This legislation introduces a number of changes to the regulation of building work in Victoria to enhance consumer protection for domestic building work under both the Building Act 1993 (Vic) and the Domestic Building Contracts Act 1995 (Vic), as well as other changes designed to improve the operation and enforceability of the requirement of these Acts.

 

Changes effective 4 July 2016

Parts of this legislation will come into effect on 4 July 2016. In summary, the key changes include:

  • works being undertaken by owner builders now being subject to the same regime of performance audits by the Victorian Building Authority (VBA) as builder works;
  • not allowing building surveyors to accept engagements where there is a conflict of interest;
  • setting out with more clarity when a builder or other person will be committing an offence if building work is undertaken without a building permit or not in accordance with a building permit; and
  • more extensive powers for the VBA, building surveyors and auditors to issue directions requiring builders and other people in charge of building sites to fix non-compliant work.

Below, we discuss some of these changes in more detail.

Owner builders

Owner builders will only require consent to undertake building works of more than $16,000 (previously $12,000). This amount will bring the certificate of consent in line with the requirement to obtain domestic building insurance if the owner builder then sells the property on which the works were carried out within a specific time frame.

Works being undertaken by owner builders will also be subject to the same regime of performance audits by the VBA as works undertaken by registered builders. The VBA can carry out performance audits of owner builder works, works undertaken by an owner who is an architect and owners carrying out works under an emergency order, a building notice or a building order.

Building surveyors and conflicts of interest

There are enhanced provisions preventing building surveyors accepting engagements where they (or their partner, director, employer or employee) have a conflict of interest.

Clarity around what constitutes an offence

The changes set out with more clarity when a person will be committing an offence by allowing building works to be undertaken without a building permit, or by allowing building works to be undertaken which is not in accordance with a building permit or building laws.

Extended powers to direct fixing of non-compliant work

There are new and extensive powers for the VBA, building surveyors and auditors to issue directions requiring builders and other people in charge of building sites to fix non-compliant work. The VBA or the building surveyor will be able to issue directions to a builder to ‘fix’ building work that does not comply with the Building Act, its regulations or the building permit. There is a penalty for non-compliance.

A builder cannot seek any payment from the owner for complying with the direction to fix. If the builder does not comply with the direction to fix, the building surveyor must advise the VBA of the failure. A builder has seven days (or such other time which may be prescribed) to appeal the direction to the Building Appeals Board.

A building surveyor must not serve a building notice or order on an owner unless it is clear a notice to fix will not be complied with or it is not possible or appropriate to give a notice to fix.

Other changes

There are new provisions requiring domestic building contracts for arranging or managing the building work to specify the name of the builder who is carrying out the work.

Builders will be able to give written undertakings to the VBA. A failure to comply will be a ground for disciplinary action and the VBA can seek compliance through the courts. The VBA will be required to maintain a public register of undertakings which may be inspected by anyone.

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Changes on the horizon for the Victorian building industry

The legislation also introduces other significant changes which are not yet effective. The timing for implementation is due on or before 1 July 2017. These changes include the abolition of the Building Practitioners Board, the transfer of the Board's powers and functions to the VBA, a new show cause disciplinary process and a new dispute resolution procedure to be established by Consumer Affairs Victoria under a body called Domestic Building Dispute Resolution Victoria.

We will provide further information about those changes once the commencement date of those changes has been announced.

The Victorian Government has also indicated that it intends to introduce even more changes in a second tranche of legislation (expected sometime this year) that will include changes to the building permit system and the registration of corporations as builders.

Authors
Elon Zlotnick, Senior Associate
Nicole Feeney, Special Counsel

Further information

All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.

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