The last resort Builders Warranty Insurance scheme is set to be dumped as part of a wide-ranging overhaul of construction industry regulation in Victoria, which will also enable corporations to register as building practitioners or building surveyors and scrap a number of industry regulatory bodies.

Unveiled by Finance Minister Robert Clark last week, the Building Legislation Amendment Bill 2014 amends the  Building Act 1993, the Domestic Building Contracts Act 1995 and the Architects Act 1991 and gives effect to the government’s controversial Domestic Building Consumer Protection Reform Strategy announced last year.

Amongst the changes, the Bill:

  • Replaces the Builders Warranty Insurance scheme with a new Domestic Building Consumer Protection Fund to be operated by the Victorian Building Authority (VBA).
  • Abolishes a number of regulatory bodies including the Building Practitioners Board (BPB), Building Appeals Board (BAB), Architects Registration Board of Victoria (ARBV), Building Regulations Advisory Committee (BRAC), Building Advisory Council and Plumbing Advisory Council, with functions previously carried out by these organisations to be allocated among the VBA, the Victorian Civil Appeals Tribunal (VCAT), the Technical Accreditation Committee and other bodies.
  • Enables corporations and partnerships to register as building practitioners and building surveyors and beefs up powers for surveyors to give directions with respect to building work.
  • Establishes a new conciliation framework for domestic building disputes.
  • Gives greater regulatory powers to the VBA, including the ability to examine the financial probity of building practitioner applicants and issue ‘show cause’ notices to practitioners if it believes there are grounds for disciplinary action.
  • Enables the completion of private building surveyor work where the surveyor in question has ceased to function (i.e. died, been suspended or become insolvent) by enabling the VBA to appoint a manager to a private surveying business.

The new legislation follows the creation of the VBA last year, which replaced the former Building Commission and which was billed by the government as creating a ‘one-stop-shop’ for building industry regulation. The VBA has been widely criticised by both industry and consumer groups, however, amid sentiments the reforms failed to address fundamental consumer protection issues and frustration over what was seen as a lack of genuine industry consultation.

Clark said the current system is failing and the changes will help improve construction industry accountability.

“These reforms recognise that the current system is not working as well as it should for either consumers or for builders,” he said.

“It can be far too difficult for consumers to get justice when a builder does the wrong thing. Builders who give the industry a bad name are too often not being held to account while honest, capable and hard-working builders can be tied up with insurance paperwork and lengthy disputes with unreasonable clients.”

Talking specifically about the insurance reform, Builders Collective of Australia president Phil Dwyer welcomed the latest moves, saying the current insurance scheme has failed builders and consumers alike and that its abolition was something his organisation had been seeking.

“Since its inception in 2002, Last Resort Mandatory Builders Warranty Insurance has been the subject of new fewer than 51 reviews and has been fraught with criticism,” he said. “This (its removal) is common-sense and something the Builders Collective of Australia has long been lobbying for”.