Home building laws in Victoria and every state or territory ensure tradespeople are appropriately qualified for the work they perform on residential properties. However, the home building laws do not cover all trades. If you are a tradesperson in Victoria, you need to know when the Domestic Building Contracts Act 1995 (Vic) (the Act) may apply. This article will explain when and how you comply with home building laws.
Amendments to the Act
On 22 February 2024, the Victorian Government enacted the Building Legislation Amendment (Domestic Building Insurance New Offences) Act 2024 (Vic), which commenced on 28 February 2024. This Act revises the Act and the Building Act 1993 (Vic) to enhance protections for homeowners by:
- instituting stricter regulations on builders; and
- mandating domestic building insurance (DBI).
Some key amendments include that:
- builders involved in major domestic building contracts must secure DBI coverage for their work;
- builders without DBI who enter such contracts risk immediate suspension of their registration and could incur fines of up to 500 penalty units for individuals or 2500 penalty units for companies; and
- the Victorian Building Authority (VBA) now has increased authority to impose disciplinary measures on builders who fail to meet insurance obligations.
Previous DBI Framework
Before these changes, builders needed to acquire DBI when the contract value exceeded $16,000. DBI protects homeowners by covering incomplete or defective work and provides last-resort coverage should the builder become insolvent, decease, or disappear.
Continue reading this article below the formNew Offences under the Act
The Act introduces a new Part 3A, detailing offences linked to major domestic building contracts and DBI, specifically through new Sections 43A and 43B.
Section 43A defines ‘domestic building insurance’ as insurance covering domestic building work as mandated and compliant with specified sections of the Building Act 1993. Additionally, section 43B criminalises the acceptance of deposits by builders under major domestic building contracts without securing DBI, with severe penalties for non-compliance under different levels of culpability.
Whether you’re a small business owner or the Chief Financial Officer of an ASX-listed company, one fact remains: your customers need to pay you.
This manual aims to help business owners, financial controllers and credit managers best manage and recover their debt.
Amendments to the Building Act 1993
The Building Act 1993 also incorporates a new goal to regulate builders and address offences, specifically where financial demands are made by builders without DBI coverage.
Furthermore, it allows the immediate suspension of a builder’s registration under certain conditions and extends the VBA’s ability to initiate legal actions against non-compliant builders, enhancing the VBA’s enforcement capabilities.
Licences for Project Managers in Victoria
If you are managing a domestic construction project in Victoria, you will need a registration of Building Practitioners – Project Manager (Domestic) – Victoria.
In Victoria, a project manager is responsible for managing or arranging the carrying out of domestic building works by registered domestic builders. A project manager cannot carry out the building work themselves or arrange for unregistered builders to carry out the work.
Furthermore, to be eligible for this registration, you must:
- hold the required qualifications and period of practical experience;
- satisfy the agency that you are of good character and fit to work as a project manager (domestic);
- hold, at least, the minimum compliant insurance policy; and
- provide a signed authorisation allowing the VBA to conduct a National Police Certificate check.
To obtain building practitioner registration in Victoria, specifically as a project manager, you must complete an application form, experience statement, technical referee report and an evidence portfolio.
Key Takeaways
As a tradesperson, it is crucial to understand the different home building laws that may apply to your work in Victoria. This includes the Act and the Building Act 1993. Some of the key recent amendments to keep in mind include that:
- builders must seek DBI for their work to avoid incurring penalties;
- the VBA has the power to impose stricter penalties for non-compliance; and
- new offences relating to DBI have been created.
Additionally, you should be aware of general legal requirements that may apply to your trade. For example, if you are a project manager for a domestic building project, you need a registration of the relevant licence, Building Practitioners – Project Manager (Domestic) – Victoria. This requires undertaking many steps, such as collecting evidence and completing an application form and experience statement.
If you need clarification regarding which home building laws in Victoria apply to you, our experienced experienced construction lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to solicitors to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
The VBA could suspend your registration and impose penalties. Additionally, accepting deposits without securing DBI can lead to criminal charges under the new amendments to the Domestic Building Contracts Act 1995 (Vic).
You should ensure that you obtain DBI and understand the new updates to the law regarding DBI, as outlined in the article above. Additionally, you should ensure that you hold the appropriate registration for your role and the work you are engaging in.
We appreciate your feedback – your submission has been successfully received.
