Building Legislation Amendment (Consumer Protection) Bill 2015

24 June 2016

The Building Legislation Amendment (Consumer Protection) Bill 2015 (Bill) will make key changes in the construction industry by enhancing consumer protection in relation to domestic building work.

The Bill will improve the regulation of building practitioners, particularly in domestic building work and building surveyors by amending the Domestic Building Contracts Act 1995 and the Building Act 1993.  The Bill also further regulates owner-builders and abolishes the Building Practitioners Board – the functions of which will be inherited by the Victorian Building Authority.

The first set of changes come into effect on 4 July 2016, with the rest being implemented across 2016 and 2017.

Key changes
Building Practitioners Board abolished

The Victorian Building Authority (VBA) will now be responsible for:

  • Issuing certificates of consent to owner builders;
  • Registering building practitioners; and
  • Carrying out disciplinary functions.

Industry representatives will no longer be required to participate in the registration process or disciplinary procedures.

New dispute resolution procedure for domestic building disputes

The new procedure will be facilitated by Domestic Building Dispute Resolution Victoria (DBDRV), a division of Consumer Affairs Victoria. Consumers and builders will need to adhere to the new process before they can take their dispute to Victorian Civil and Administrative Tribunal (VCAT). DBDRV will have the power to order works to be completed and payments to be made from both parties. Failing to comply with DBDRV orders will be grounds for a disciplinary inquiry.

Building practitioner registrations will no longer be indefinite

Registrations will last up to five years and practitioners will have to comply with Continuing Professional Development (CPD) requirements to have their registration renewed.

Builder’s details on the insurance certificate to reflect those in the domestic building contract

A building practitioner’s details must be identical on both the major domestic building contract and the insurance certificate. A failure by the relevant building surveyor to ensure this occurs when issuing a building permit for domestic building works means that the insurance cover is not properly effected.

Prohibition against domestic builders appointing building surveyors

Domestic builders are prohibited from appointing building surveyors on behalf of an owner.

Owner-builders to wait five years between projects

The current owner-builder restrictions surrounding certificates of consent for new properties will be raised from every three to every five years. The VBA will now also be able to audit owner builders’ work in the same manner as any work of a registered building practitioner.

VBA to approve codes of conduct for building practitioners

VBA will approve codes of conduct for building practitioners, will be able to develop codes and accept a proposed code submitted by an organisation representing practitioners. Any code of conduct approved by the VBA will have legislative force and a breach of a code will be grounds for a disciplinary inquiry. These codes are aimed at lifting standards of conduct in the industry and more clearly define the roles and responsibilities of the various practitioner categories.

VBA and responsible building surveyor to have power to issue direction to fix

The VBA and the responsible building surveyor will both have power to issue directions to a builder to fix building work. Builders who do not comply with a direction to fix will commit an offence. A responsible building surveyor must refer the matter to the VBA where a builder does not comply with a direction to fix and the Building Appeals Board will hear any appeals made by a party served with a direction to fix. Further, a building surveyor (municipal or private) will not be entitled to issue a building notice or building order to an owner unless a direction to fix has been issued and the owner has failed to comply with the direction. Therefore, a building surveyor, in the majority of instances, will need to issue a direction to fix before they can issue notices and/or orders to an owner.

Changes to the disciplinary inquiry process

Significant amendments to the disciplinary inquiry process will occur. For example, a builder’s failure to comply with an adjudication determination under the Building Construction Industry Security of Payment Act 2002 will be grounds for an inquiry, as will the failure to comply with annual CPD requirements (referred to above).  Inquiries will be carried out by the VBA and commenced by a ‘show cause’ notice to the builder. The VBA will have power to immediately suspend the registration of a building practitioner if the VBA believes there are reasonable grounds to do so. The grounds to immediately suspend registration have been widened to include insolvency and where the building practitioner no longer holds the relevant/required insurances.

VBA to have power to appoint a manager to a private building surveyor’s business

The VBA will have power to appoint a manager to a private building surveyor’s business where the private building surveyor requests, dies, becomes insolvent, is in prison or has their registration suspended or cancelled.

This article was written by Theo Kalyvas, Partner, Paul Graham, Partner and Alan Chiang, Associate.

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