The Building Legislation Amendment (Consumer Protection) Bill 2015 became law on 19 April 2016 – amending the Building Act 1993 (the Act) and the Domestic Building Contracts Act 1995 (the DBCA).

The amendments will be implemented on a staggered basis, with some commencing on 1 September, others having already commenced on 4 July 2016, and the remaining amendments being implemented sometime in 2017.

Master Builders has been working with the government, Victorian Building Authority (VBA) and Consumer Affairs Victoria (CAV) to help develop information and materials to guide practitioners in their obligations and the changes to the legislation.

This article addresses several important items including:

Details about the changes
Fact sheets issued by the VBA
Domestic contract amendments required as of 1 September

Building legislation panel discussion now available

Master Builders acknowledges that the changes brought about by the recent amendments may be complex and the transition may in some cases be difficult. To help with the transition and to ensure you understand the content of the changes, Master Builders hosted an information evening with representatives of the Victorian Building Authority (VBA), Consumer Affairs Victoria (CAV) and the Department of Environment, Land, Water and Planning (DELWP) to discuss them.

The evening was held at Master Builders in East Melbourne on Tuesday 16 August with a panel of expert speakers:
• Simon Cohen, Deputy Secretary, Regulation and Director, CAV
• Prue Digby, CEO VBA
• Angela Jurjevic, Director of Building, DELWP

The discussion was recorded, and is now available for members to view via the Master Builders member portal here.

Key fact sheets

The VBA has published a range of fact sheets about the changes that will commence on 1 September 2016. These fact sheets can be found here.

Key fact sheets include:

Appointment of a private building surveyor
5 year builder registration 
Directions to fix
Domestic building consumer guide

Important changes to the domestic building contracts

As a result of the building legislation amendments, some changes to our domestic building contracts will be necessary.

The changes to our domestic contracts affect some clauses that deal with the appointment of private building surveyors, a new checklist and the requirement to give the owner a copy of the Domestic Building Consumer Guide before signing the any domestic building contract.

Each amendment must accompany every Master Builders contract you sign after 1 September 2016 including a copy of the Domestic Building Consumer Guide.

The changes that affect the following domestic building contracts are:
1. New Homes (HC6)
2. Home Improvements Contract (HIC5)
3. Minor Works Contract (MW-1)
4. Cost Plus Contract (DCP-1)
5. Domestic building consumer guide

If you have any questions, please call Master Builders on (03) 9411 4555.

For your convenience, Master Builders has summarised what the changes might spell for your business.

Changes proposed for 1 September 2016

Builders can no longer directly appoint building surveyors

The amendments to the Act will prohibit a builder from acting as the owner’s agent in the appointment of the private building surveyor (PBS). The information about the role of the PBS must  be provided by the builder to the owner in the form of a Domestic Building Consumer Guide (see below). The owner must now formally appoint the building surveyor in writing, however the builder will be able to make a recommendation to the owner for a building surveyor.

The building contract may still allow the builder to obtain the building permit on behalf of the owner.

The change does not affect any appointment that was accepted prior to 1 September 2016 or any domestic building contract entered into prior to 1 September 2016 which authorises the appointment by a builder of a private building surveyor.

Transitional arrangements will be made so that contracts entered into prior to 1 September 2016, that authorise a builder to appoint a private building surveyor, are not affected.

Builders will be required to give owners a Domestic Building Consumer Guide

Builders will be required to provide a domestic building consumer guide (the Guide) to owners before they enter into a major domestic building contract. The Guide will emphasise the importance of the building surveyor exercising his or her statutory functions in an independent manner and will provide information about the responsibilities of each party in the building process.

The Domestic Building Consumer Guide has been published and a copy can be accessed here.

Registration of Building practitioners

 The Building Practitioners Board (BPB) will be abolished and the VBA will take over registration and disciplinary functions which were previously the remit of the BPB.

As part of the test for registration, the ‘good character test’ will be replaced with a ‘fit and proper person’ test which will take into account various matters including the requirement of financial and personal probity of the applicant. The matters taken into account are outlined in more detail in the VBA’s Fact Sheet.

Building practitioners will be required to renew their registration every five years. For those builders registered after 1 September, they will receive their registration for a five year period. For those that were registered before 1 September, then the year at which the builder will have to renew will depend on the year the builder first registered (as per the schedule below). Please contact the VBA on 1300 815 127 for details of your first year of registration.

Prescribed conditions

The VBA will be able to impose prescribed conditions on a building practitioner’s registration.

Internal review of decisions

A building practitioner will be able to apply to the VBA for an internal review regarding a decision by the VBA – including any prescribed conditions imposed on a building practitioner’s registration.

The certificate of consent threshold for owner- builders will be increased

The amount that determines whether a certificate of consent is needed for domestic building work undertaken by an owner-builder without a major domestic building contract increases from $12,000 to $16,000 and will be implemented on 1 September 2016.

Changes to disciplinary action will in some cases include show cause notices and immediate suspension

The VBA is able to take new disciplinary actions, including immediate suspension and the issuing of show cause notices. A show cause notice can be issued by the VBA in certain circumstances including where the practitioner is insolvent, has contravened the Act or Regulations, has been convicted of an indictable offence involving fraud, dishonesty, drug trafficking or violence, has ceased to be covered by the required insurance or failed to comply with any particular condition of their registration.

Changes to occur in 2017

Continuing Professional Development program to developed

A Continuing Professional Development program for Building Practitioners will be developed. The program will be developed in consultation with industry and once established, building practitioners will have to demonstrate their compliance with the requirements when they renew their registration.

Establishment of new domestic building work dispute conciliation body

A new body called Domestic Building Disputes Resolution Victoria (DBDRV) will be established, which is an independent, free, domestic building dispute resolution service for resolving disputes between owners and builders. This service introduces mandatory conciliation and powers for a conciliator to issue binding orders on all parties to resolve disputes. It is hoped that this service will give parties greater incentives to resolve disputes more efficiently. It is also hoped that this service will reduce the number of disputes and vexatious claims that reach VCAT.

Changes that came into effect on 4 July 2016

Building surveyor now required to lodge certified checklist

The Relevant Building Surveyor (RBS) is required to lodge an approved checklist certifying the lodgement of documents with the relevant council. An approved checklist in accordance with section 30A of the Act has also been developed and uploaded to the VBA website.

Building surveyors have greater power to issue directions to fix

Building surveyors now have greater power to issue directions to fix building work that fails to comply with the Act, the regulations or the permit. A written direction to fix building work form in accordance with section 37F(1) of the Act, has also been developed and uploaded to the VBA website.

 The VBA now have the power to inspect owner-builder sites

The VBA’s powers to inspect building work carried out by a registered building practitioner, will be extended to include owner- builders projects.

Owner- builders can only build every five years

The number of years within which an owner- builders can obtain a certificate of consent from the VBA has been increased from three to five years. There are now tougher requirements, by way of an online assessment, before owner- builders can make an application for a certificate of consent to build.

Building can only occur where a building permit has been issued

Offences related to carrying out building work without a building permit and/or breach of the Act, Regulations or the permit, are extended to specific duty holders which now includes owner-builders, builders and architects.