Building firm Aycon Constructions & Building Services (Aycon) has been fined $250,000 and suspended for 3 years. The imposition of a hefty fine and suspension followed an investigation by the Victorian Building Authority (VBA) which revealed that the builder did not obtain Domestic Building Insurance (DBI) for a number of its building projects and identified multiple falsified DBI certificates associated with major domestic building contracts and building permits naming Aycon as the builder.
The outcome of the VBA's investigation highlights the importance for consumers and building professionals in ensuring that a valid DBI policy is in place, particularly following the collapse of a number of significant builders (such as Porter Davis) in recent years.
Builders are required to purchase DBI on behalf of the homeowner for any domestic building work valued over $16,000 and of less than three storeys. The regulatory framework requires the relevant building surveyor to be satisfied DBI insurance has been obtained, and to be satisfied that the name of the builder in the building contract is identical to the name of the person specified as the builder in a certificate of insurance before issuing a building permit for the works.
Following this use of fraudulent insurance certificates, building surveyors and homeowners may also chose to take further steps to verify the authenticity of certificates, such as verifying certificates issued with the purported issuer, or in the case of certificates issued by the VMIA verifying authenticity using the QR code / watermark protection.
With insolvencies of domestic builders remaining prevalent, DBI insurance provides an important protection of last resort for consumers / homeowners. However, it is more important than ever that homeowners and others, such as building surveyors are taking steps to ensure that appropriate and legitimate policies of insurance are in place, where required by law. For building cutting corners when it comes to insurance requirements this case constitutes a timely reminder that they are not only likely to face penalties at the hand of the regulator, but also significant loss of consumer confidence and associated reputational damage.
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