Victorian Government Enhances Protections for Homeowners
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The Victorian government has implemented significant changes to the Domestic Building Contracts Act 1995, with the goal of providing enhanced protections for Victorians undertaking home construction or renovation projects, while also bolstering the state's building sector.
Recently introduced to Parliament, the reforms are crafted to promote fairness and transparency in domestic building contracts, emphasising consumer safeguarding and industry resilience.
Crucial modifications encompass updated regulations governing builder payments, with specified deposit limits and defined progress payment phases to be outlined in regulations.
For contracts exceeding $1 million, builders will have the option to utilise cost escalation clauses to manage unforeseen expenses, albeit with a stringent 5 per cent cap on price increments and additional protections for consumers.
Additionally, the reforms tackle issues like contract splitting and grant consumers the authority to terminate contracts in cases where project timelines extend by more than 50 per cent or costs escalate by over 15 per cent.
Moreover, Victoria's legislation will be harmonised with other jurisdictions by excluding the preparation of plans, specifications, and bills of quantity from the domain of domestic building work.
The legislation also lays the groundwork for establishing the Building and Plumbing Commission, a novel regulatory body that will amalgamate powers from Consumer Affairs Victoria into the Victorian Building Authority.
This strategic move will consolidate oversight of building quality, insurance, and dispute resolution within a singular agency, streamlining regulatory processes and enforcement.
The government engaged in extensive consultations with consumer advocates, financial institutions, and builder associations such as the Housing Industry Association, the Master Builders Association of Victoria, and the Consumer Action Law Centre to shape these reforms.
These actions are part of a comprehensive response to industry challenges brought to light by the collapse of Porter Davis Homes in 2023, which left numerous Victorians devoid of insurance coverage or avenues for recourse.
The reforms underscore the government's commitment to modernising the building framework and delivering safer, more compliant, and enduring homes for the community.
Nick Staikos, the VIC Minister for Consumer Affairs, affirmed, “These reforms will strengthen protections for consumers while supporting the building industry — helping get more homes built.”
Harriet Shing, the VIC Minister for Housing and Building, added, “As we build and approve more homes across the state to meet demand, we’re also delivering reforms that focus on certainty, quality, and accountability.”
“These reforms strike an important balance for buyers making the biggest purchase of their lives, and for the vast majority of builders who take great pride in their work.”
Source: Build Australia
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