Early this year we announced that both the Victorian Building Authority (VBA) and Consumer Affairs Victoria (CAV) would be undertaking a new regime of inspections. At that time, we also provided an updateon the VBA program.

Below, we offer a similar update on the CAV approach to its inspection regime to date.

A number of our members has advised us they have been contacted by the CAV and advised of a time that an inspection would be conducted at their office.

So under what power is CAV conducting these inspections and why?

The Australian Consumer Law and Fair Trading Act 2012 (the Act) confers powers of inspection on Consumer Affairs Victoria (CAV) to perform random checks on businesses or investigate a business where there is reason to suspect non-compliance, with the Domestic Building Contracts Act 1995 (DBCA).

Domestic builders should take note, as an inspection can take place without warning.

Inspectors appointed under the Act have powers to enter any premises used for business purposes during business hours (or a premise’s regular opening hours).

Inspectors’ powers of inspection are broad and include (amongst other things) the ability to:

• enter a premises without prior notification;
• enter a premises without the owner or occupier being present;
• search and examine anything found on the premises;
• require any document to be produced; and
• remove, make copies or take extracts of documents.

Members should be vigilant in maintaining their records and checking their compliance with the DBCA, particularly in relation to contracts deposits received, invoicing and Domestic Building Insurance requirements.

We also understand that members may be sent a letter containing the following information:

Under our Statewide Inspection Program, Consumer Affairs Victoria inspects businesses to ensure they are complying with the legislation we administer. We will be checking builders’ major domestic building contracts as part of the program.

We will be checking your contracts comply with:

• the Domestic Building Contracts Act 1995. For example, whether you are meeting your registration, warranty, insurance, and progress payment requirements
• the Australian Consumer Law; specifically, whether your contracts meet price advertising and proof of transaction requirements.
Benefits for you and your clients
Our inspections help you understand your legal obligations, and the consequences if you don’t meet them. They also help ensure consumers are protected from unfair practices.

How we choose who we inspect

Consumer Affairs Victoria selects builders for inspection:
• randomly
• based on a risk assessment
• in response to incoming complaints.

We only inspect builders who have completed a domestic building contract over the past 12 months.

Inspection powers

Our inspectors may:

• arrange a meeting with a business to discuss compliance obligations
• visit a business without prior notification to conduct an inspection
• enter and search business premises*
• require a business to produce documents and information
• inspect documents
• make copies or take extracts of documents
• seize documents or goods.
*Section 155 of the Australian Consumer Law and Fair Trading Act 2012

Inspectors may ask to view a range of documents, including:

• domestic building contract
• invoices and receipts
• builders warranty insurance documents
• building permits
• plans and specifications
• geotechnical soil reports.

What happens next

If our inspectors find your contracts have not complied with the law, you will receive a warning letter explaining what you need to do to resolve the issue.

For more serious failures, we have a range of enforcement options. See the ‘Compliance and Enforcement Policy’ page on the CAV website for details: https://www.consumer.vic.gov.au/compliance

Consumer Affairs Victoria

We expect to conduct more than 5,600 inspections of businesses this financial year – up from 3,470 in 2014-15. For more information, visit the ‘About inspections’ page on the CAV website: https://www.consumer.vic.gov.au/inspections