Changes to how Owner-Builders Are Regulated in Victoria 5

Monday, July 18th, 2016
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The Building Legislation Amendment (Consumer Protection) Bill 2015 was enacted into law on April 19, 2016 and amends the Domestic Building Contracts Act 1995, the Building Act 1993 and the Victorian Civil and Administrative Tribunal Act 1998.

There are a number of amendments which will come into fruition on a staggered basis between the periods of July 4, 2016 and July 1, 2017, and many will affect the regulation of owner- builders in Victoria.

Some of the changes that will affect the regulation of owner-builders from 4 July 2016 are as follows:

  • From July 4, 2016, the Victorian Building Authority (VBA) has the power to inspect building works of owner-builder projects in addition to just those of registered building practitioners by the insertion of the words “or owner-builders” next to registered building practitioners under sections 227B and 227C of the Building Act 1993 (BA). The VBA’s powers include the following:
  1. entering land/and dwellings between 8 am and 6 pm under certain circumstances to examine work for compliance
  2. requiring a person (including owner-builders) to produce certain documents on request
  3. making copies of documents
  4. requiring a person (including owner-builders) to provide certain information on request
  5. reporting to the VBA, or a person authorized by the Authority, the results of any inspection.
  • From July 4, 2016, just like registered building practitioners, owner-builders will be able to be audited to ensure that their works are carried out competently and do not pose a risk of injury or damage to any person and that all of the relevant acts, building regulations and permits are being complied with. The VBA’S powers will allow VBA inspectors to proactively audit onsite building work and documentation, building permits and insurance policies.
  • From July 4, 2016, the amendment to section 16 of the BA for carrying out building work without a building permit and/or in breach of the Act, the permit or the regulations will extend to specific duty holders such as land owners, including owner-builders. Land owners and owner-builders will specifically be prohibited from permitting building work to be done on their land without a building permit or in breach of the Act, regulations or the relevant building permit. According to section 16(3) of the BA, it is a defence for a land owner if a building practitioner or architect has been engaged to carry out the building work. We note that the maximum penalties for breach of section 15 are 500 penalty units in the case of a natural person and 2500 penalty units in the case of a body corporate. A penalty unit is worth $151.67.
  • From July 4, 2016, the VBA’s powers with issuing directions to fix building work will be strengthened. A building surveyor must issue directions to fix building work if the work breaches the law or the building permit. If you do not comply with the written direction this is an offence. Accordingly owner-builders, including building work that does not require a certificate of consent (COC) from the VBA, MUST comply with a direction to fix within seven days in the case of an oral direction or within the time specified in the case of a written direction.

Where an owner-builder doesn’t comply with the written direction, the building surveyor is required to notify the VBA of this failure in compliance.

Owner-builders will have liberty to seek extensions of time for compliance and may also appeal to the BAB against the decision of a written direction.

Proposed future changes to affect owner-builders that will be implemented at a later stage are as follows:

  • The amount at which an owner- builder will be required to obtain the certificate of consent (COC) from the VBA before carrying out domestic building work without a major domestic building contract will be raised from $12,000 to $16,000 under section 25B of the BA. This amount will bring the COC in line with the requirement to obtain domestic building insurance if the owner-builder then sells the property on which the works were carried out within a specific time frame.
  • Section 25E of the BA will be amended to raise the years within which an owner-builder can obtain a COC from the VBA from three years to five years.

The amendments above are game changing. One could even say that owner- builders are quasi-practitioners now by virtue of the fact that whilst they are building, they are regulated. Prior to these amendments, owner-builders were able to operate in a blasé or laissez-faire environment – little wonder the quality of owner-builder as built product often left a lot to be desired.

There are still some unanswered questions, however, regarding the VBA’s new powers in being able to audit  and inspect owner-builder projects and documentation – namely if the investigators determine that work has not been carried out competently, what then? What is the disciplinary redress and will it be heavily enforced or at all? If owner-builders are found culpable and there is no process for disciplinary redress, would this not suggest that there is a double standard? For in the case of building practitioners there would indeed be disciplinary redress by virtue of the punitive powers that will no doubt be leveled by the VBA by virtue of the new incarnation it will become in assuming the jurisdiction of the Building Practitioners Board.

Should you require further legal advice on how the changes will affect you, you should contact a building and construction law specialist.

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  1. Kim lovegrove

    Great article Emily, clear and insightful.

  2. Brett Bates

    If I interpreted this correctly does this mean that there are two 'authorities' checking the building works? Firstly the PCA who is regulated to ensure the works conform with approved documentation and NCC requirements and secondly government officers of your equivalent of the OFT Home building inspectors in NSW?
    Isn't it time for recognition that Turnbull must put national licencing and building regulation reform back on the COAG agenda? It is an unmitigated mess of red tape and bureaucratic impediment constantly being tinkered with by state and territory agencies that ultimately offers no protection for building consumers and occupants .
    As a concept it should be treated like the provision of medical health care services as a template so that some degree of public confidence can be established in respect of the variable levels of qualifications and standards of the persons we trust to construct our buildings.

  3. kim lovegrove

    Brett, it is indeed unfortunate we have the " eight countries" of Australia in terms of licensing and registration requirements. The duplicatory burden and variable registration requirements are very puzzling to those from afar that study our systems because Australia ( in population terms) is such a tiny country-no larger than a large international metropolis; yet 8 different registration regimes. It's quite perplexing when you think about it.

    • Graham Morrow


      I agree that the differing regulation of building activities is puzzling from afar; it is also less than straightforward when advising a client carrying out, or contemplating, work in another state. I personally see no long term downside of 'harmonising' at least the domestic building industry and its regulations

  4. Kim lovegrove

    An attempt to harmonise occrred in the early nineties through a federalism imitiative called the National Model Building Act ( See my latest piece monopoly to free market to hindsight). Some uniformity was facilitated ie proportionate liability, ten year capping and different iterations of private certification. But it was the only time that a harmonisation initiative gained oxygen. I doubt very much whether it will ever happen again. There is simply no desire on the part of the governments to harmonise and unless the 9 governments are so disposed it can't happen.