Builders in Victoria who carry out construction work without a permit will be subject to fines of almost $160,000 in the case of individuals or $800,000 in the case of companies and will be subject to new offenses if they fail to comply with directions to rectify shoddy workmanship under changes to building industry regulation in that state.

Applicable from July 4, the new laws represent the first of a two-stage process of change which is designed to improve building industry regulation throughout Victoria.

Under the new laws, builders and architects are specifically prohibited from (a) carrying out any form of building work without a permit; and/or (b) performing work which is in breach of the Building Act. This means that those who are carrying out building work are required to ensure the work both complies with the Act and is covered by a permit prior to commencing. Those who do not comply with this new rule could potentially be liable for two offences: that of carrying out building work without a permit and that of carrying out work which does not comply with the Act.

Landowners, too, are prohibited from allowing building work to be done on their property which does not comply with the Act or for which no permit has been granted, although they have a defense where the work in question has been performed by a building practitioner or an architect.

The new law applies penalties for each offense in the case of an individual or 2,500 units in the case of a company. With the current value of a penalty unit being $151.67 and penalties being doled out in units of 500, this equates to $75,835 for each offense for a person or $379,175 per offense for a company. This means that if both of the aforementioned offenses are committed, individuals and companies could find themselves liable for $151,670 or $758,350 respectively.

In other changes affecting builders, penalties of 500 units ($75,835) and 50 units ($7,584) apply where new offenses of failing to comply with a direction of either the Victorian Building Authority or the relevant building surveyor are committed, whilst the threshold with regard to the dollar value of work which may be done before a certificate of consent is needed for domestic work being undertaken without a major domestic building contract has been increased from $12,000 to $16,000.

In terms of owner builders, meanwhile, the new laws give greater enforcement powers to the Victoria Building Authority, whose power to inspect building work and documentation will now extend beyond work being carried out by building practitioners and apply to work being undertaken by owner builders. This means that under specified conditions, VBA officers will be able to enter residences at which owner builder work is taking place, inspect the premises, obtain relevant documents and information and report the results of inspections back to the VBA.

Finally, in terms of private building surveyors, it will now be a general offense for a surveyor to act in any positions where they have a conflict of interest. This requirement is in addition to existing prohibitions on carrying out the functions of a private building surveyor in cases where the surveyor or related parties carried out design or building work in respect of the building in question.

The changes represent the first of a two tranche round of reforms which are designed to improve building industry regulation in Victoria.

Subsequent changes slated for next year include the abolition of the Building Practitioner’s Board, the introduction of a new process for building practitioner discipline and the introduction of renewable registrations.

Building industry regulation in Victoria has been the subject of considerable levels of controversy over recent years amid a number of reports which have found that consumer protection was lacking amid lax building regulation processes.

  • Gr8 stuff – when will the government move to ensure all subcontractors are licensed just like builders and plumbers are. We have our homes as security when we take out builders warranty insurance, what liability do subcontractors have ? NONE/ZIP. The government needs to make these changes instead of transferring all the responsibility to the builder. In the event a builder gets a claim further down the track, what hope has he got of getting the responsible subbie to respond ? Not much im guessing.

  • When we expect the industry to function at the right level of quality, we then have to start importing builders. The medical field because of corruption of the system has had to steal medical people from other countries to improve outcomes.
    If we do not want to train the millions of under skilled Australians we have to import them.
    The training is needed for the guys who dig the trenches, the guys who put the steel in place and the guys who pour the concrete. Even the guys who deliver concrete can do training. Plus the rest.
    I was told about a young man who is on student visa in Australia, but with a degree in Engineering, driving a concrete delivery truck part time; stop pouring the concrete, take out the steel reinforcing, remove the water and mud in the trenches, widen the trenches to get concrete cover to the reinforcing; and, yell out to the concreter’s " hey guys this is going to be someone’s home".
    There is not enough competition in the system at the moment how are we going to deal with high price rises if we send half the work force home.