Stronger powers proposed for VBA relating to Domestic Building Insurance
The Victorian Government introduced the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023 (Vic) into Parliament on 28 November 2023. If passed, it aims to provide added protection to consumers by amending the Domestic Building Contracts Act 1995 (Vic) (DBC Act) and the Building Act 1993 (Vic), including via mandating builders obtain domestic building insurance (DBI) before accepting payments from building owners under any major domestic building contract (DBC).
The Bill was introduced in response to the collapse of Porter Davis Homes and other domestic builders in Victoria, one consequence of which has been the uncovering of poor practices within the residential construction sector, including the practice of builders failing to obtain DBI before accepting deposits for DBCs. The Bill (if passed) is foreshadowed to come into operation on 28 November 2024 (unless proclaimed earlier).
The Bill introduces a new Part 3A, "Offences related to major domestic building contracts and domestic building insurance", including the inclusion of sections 43A and 43B into the DBC Act. These sections provide that it is an offence for a builder who has entered into a major domestic building contract to demand or receive money from a building owner under the DBC without ensuring that the domestic building work is covered by a DBI policy. A builder who is found in breach of section 43B will face a penalty of up to $96,000 for an individual, or $480,000 for a company.
The Bill also proposes to amend the Building Act to empower the Victorian Building Authority (VBA) to enforce compliance with the new DBI obligations and take disciplinary action against builders who breach these obligations. It is proposed the VBA's powers are expanded to authorise it to compel a builder to provide information or documents if it has reasonable grounds to suspect the builder has breached section 43B of the DBC Act. Amendments to section 180 of the Building Act also seek to expand the grounds upon which the VBA may immediately suspend the registration of a builder, to include circumstances where the builder fails to obtain DBI prior to accepting deposits.
Read the Regulatory Policy Statement on the VBA website.
More information is available at: https://www.vba.vic.gov.au/news/news/2023/a-reminder-to-building-practitioners-about-domestic-building-insurance-dbi)
For More Information:
Spiros Dassakis
Chief Policy Officer
Email: spiros@spasa.com.au