Consumer Affairs Victoria (CAV) has advised Master Builders Victoria that they will be conducting compliance monitoring inspections at display homes and display villages, commencing October 2018. CAV inspectors may enter and inspect display homes pursuant to their powers under the Australian Consumer Law and Fair Trading Act 2012.

In a letter conveying this information, the CAV stated that:

“The purpose of these inspections will be to ensure that builders who maintain display homes open to the public comply with their legislative obligations, in particular section 43(2) of the Act, which requires that a person who makes a display home available for inspection must ensure that certain prescribed documents are prominently displayed for inspection by a consumer.

These documents include a copy of the plans and specifications used for the display home's construction and a draft copy of the major domestic building contract that the builder would be prepared to enter to construct a similar home. Breaches of this section can attract an infringement penalty.

CAV's view is that to be compliant with section 43(2), builders must prominently display the following:

a)'Plans and specifications', which should be complete, and include such plans and specifications necessary for the display home's construction; and

b) A draft copy (not being a generic template that contains empty provisions) of the 'major domestic building contract', which is compliant with the requirements detailed in Part 3 of the Act.

CAV's view is that in order to be 'prominently displayed' the documents must stand out, be easily seen, be conspicuous, or very noticeable by and to consumers in the display home. CAV does not consider it is sufficient for documents to be merely available on request by a consumer.

I note recent targeted inspections of display homes indicate a low level of compliance with these provisions, including that none displayed a draft copy of the contract.

I also note that, since January 2017, CAV has received more than 50 consumer contacts regarding display home domestic building contracts.

In addition, I note the important consumer protection purpose of Section 43, in ensuring persons who are encouraged to enter into contracts for the construction of houses similar to a display home, have a clear understanding of the nature and specification of the construction they are contracting for, and the terms of the proposed contract.”

The CAV encourages anyone having questions about this process to call Mr David Tornatore, Senior Compliance and Enforcement Officer, on (03) 8684 6289.