The Victorian Government has announced reforms to address the economic challenges builders face, including rising supply chain costs and lower consumer confidence in the wake of the Porter Davis insolvency. The reforms aim to strengthen the building system and provide better protection for homeowners while offering clarity to the building industry. This article outlines the key reforms.
One aspect of the reforms involves amending the Domestic Building Contracts Act 1995 and enhancing domestic building insurance requirements. The Government intends to give building regulators more powers to monitor compliance with insurance obligations, particularly ensuring that builders obtain insurance before accepting deposits. Tough penalties will be imposed on builders who fail to comply with these requirements.
Additionally, the Government is considering extending the transition period for certain new National Construction Code requirements that were originally scheduled to take effect in October 2023. This extension aims to ease the burden on builders and allow them more time to adapt to the new requirements.
The reforms also include auditing of builders by the Victorian Building Authority (VBA) to assess their adherence to deposit collection and domestic building insurance purchase procedures. The role of all regulators will be reviewed to improve consumer information regarding a builder's obligation to obtain domestic building insurance.
The statement from the Government mentions that the Porter Davis insolvency highlighted the issue of some builders not acquiring the necessary insurance when accepting deposits. While the impact of these reforms is yet to play out fully, it highlights the importance of builders ensuring their DBI facility is active and a policy is taken out for each residential contract above $16,000.
As an authorised distributor for the VMIA, BRIC can provide you with tailored advice for your business to guide you through this. Please feel free to reach out at any time.
BRIC, as a company of Honan Insurance Group Pty Ltd is now fully owned by Marsh Pty Ltd. To find out more, speak to your broker or read the announcement