New building industry regulator announced in Victoria

The state government has announced the appointment of a new Building and Plumbing Commission in a bid to deliver stronger consumer protections for homeowners by combining key regulatory functions of the building industry under one roof. It follows the release of an independent review of the Victorian Building Authority's (VBA) handling of homeowner complaints, commissioned in 2023, which identified consumer distress over complex and drawn-out cases, some spanning more than a decade.

The report's recommendations included strengthening the oversight of building work during construction, enhancing the VBA's powers, improving the dispute resolution policy offered by Domestic Building Disputes Resolution Victoria (DBDRV) and developing a professional code of conduct for builders.

In alignment with these suggestions, the new Building and Plumbing Commission will integrate the current building industry regulator - the VBA - together with DBDRV and the Domestic Building Insurance (DBI) function of the Victorian Managed Insurance Authority, enabling the regulator to effectively manage all consumer complaints.

The regulator's new powers will also include:

According to a media communique from the VBA, the change signals the "most significant reform to building industry legislation in decades and puts consumer protection clearly front and centre in terms of the government's regulatory priorities."

The Australian Institute of Architects' Victorian chapter president David Wagner welcomed the transformation, saying "these changes are essential for rebuilding consumer trust and raising standards in the building industry, particularly the housing market." In addition to backing the government's proposal to increase building inspections and extending the scope of mandatory DBI, he also applauded the suggestion for developers to be made accountable for projects post-handover through a decennial liability insurance scheme.

"The Institute advocates extending this approach to all builders, ensuring mandatory contractual guarantees for all projects - this would incentivise builders to address defects directly or provide financial means for consumers to hire alternative trades," said Wagner.

Further changes, such as improved licensing and mandatory continuing education, were also recommended by the Institute in their response. According to Wagner, "Many building issues involve failed waterproofing, yet membrane waterproofing contractors are currently not required to be insured and are not regulated through a licencing system."

"The most effective strategy for addressing construction defects is to prevent them from occurring in the first place - this is crucial as Victoria prepares to meet the challenge of constructing up to 80,000 new homes annually to accommodate its growing population."

Once they pass through parliament, the proposed changes to legislation are anticipated to come into effect in the first half of 2025.