This article is from the Australian Property Journal archive
Victoria’s Allan government has introduced sweeping reforms to building regulations in the state, including a new industry watchdog, developer bonds, and first-resort insurance.
The new Building and Plumbing Commission will serve as the new regulator, consolidating regulation, insurance, and dispute resolution into a single entity.
The new regulator will replace the maligned Victorian Building Authority (VBA), coming off the back of a damning independent review into the VBA by Weir Legal and Consulting that found systemic failures in the authority applying its powers to protect consumers from builders who breached legislation or engaged in unprofessional or incompetent conduct, with seven case studies used in the final report.
The new commission will be equipped with tough enforcement powers, including halting occupancy permits or off-the-plan sales if serious defects aren’t fixed and order rectifications for up to 10 years after occupancy. Builders failing to comply face disciplinary action, including registration suspension.
To address defects in buildings four storeys and above, the government will also introduce a developer bond scheme. Developers will be required to pay 2% of construction costs, held by the regulator for two years. If issues arise, the bond funds rectification works. This scheme aligns with New South Wales’ approach and paves the way for a future decennial (10-year) liability scheme for apartment owners.
The reforms also include a first-resort insurance scheme, allowing consumers to claim for defects as soon as they’re identified, rather than waiting for builder insolvency or disappearance. Operated by the Victorian Managed Insurance Authority (VMIA) from 2026, the scheme covers domestic building contracts over $20,000 in buildings up to three storeys, including lost deposits, incomplete work, and defects.
The Department of Transport and Planning has also proposed two key measures: building manuals for apartments and mandatory inspections during construction. Building manuals will provide detailed records of construction and maintenance, helping buyers understand their homes and speeding up defect repairs. Additional inspections before waterproofing and plastering aim to detect non-compliance earlier, reducing costly post-occupancy rectifications.
Premier Jacinta Allan said Victorians rightly expect to get what they pay for and will restore trust in the sector, protect consumers and give them confidence.
“Building or buying a new home will be the biggest investment most of us ever make,” she added.
Minister for Housing and Building Harriet Shing said the reforms get the balance right and deliver quality homes of a consistently high standard.
