Victoria Scraps Commercial Building Defect Insurance

Thursday, January 16th, 2014
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Commercial builders in Victoria will no longer need defects insurance under new rules which will also see the scrapping a requirement for metal roofs to be constructed by plumbers and will increase height thresholds above which walls can be constructed near property boundaries without permits.

Announced by Acting Premier and Minister for State Development Peter Ryan last week, the changes are part of a broader raft of reforms spanning several industries designed to reduce compliance costs for business in the state.

Under key changes which affect the construction industry:

  • Commercial builders will no longer be required to have defects insurance as a condition of registration
  • Construction of metal roofs will no longer be confined solely to plumbers and will be able to be performed by registered builders as well as plumbers
  • The new Victorian Building Authority (VBA) will have sole responsibility for domestic building complaint resolution (currently, responsibility for this is shared between the VBA and Consumer Affairs Victoria)
  • The threshold for the maximum average height for walls constructed on or near property boundaries above which local council approval for construction is required has been increased from three metres to 3.2 metres.
  • The allowable setback of a wall on a property boundary within which special requirements apply will be increased from 150 millimetres or less to 200 millimetres.
  • Caravan owners wishing to build an annex within a caravan park will no longer require a permit
  • Requirements regarding which international and manufacturer tests for geosynthetic and geotextile products are acceptable in Australia will be clarified.
  • More flexible rules regarding building permit signing will be introduced.

Building industry representatives have welcomed the measures.

Phil Dwyer, National President of the Builders Collective of Australia said the requirement for compulsory defects insurance in commercial building had been “an unnecessary impost on industry” which he has fought for years to have removed.

He said there have never been any significant claims on this insurance and a 2012 review by the Building Commission found it provided it provided little benefit as the commercial sector had other remedies for consumer protection.

Dwyer also applauded the removal of the requirement to have only plumbers able to construct metal roofs.

“We’ve always argued that if a builder is building a carport or something like that, they shouldn’t have to bring in plumbers and so on just to apply sheet metal to a roof,” he said.

Master Builders Association of Victoria chief executive officer Radley de Silva also welcomed the moves, saying they would help slash costs and delays in building projects without compromising either site safety or building quality.

“Builders will now have more time to build quality homes, workplaces and infrastructure for Victorians instead of wasting time filling in never-ending bureaucratic paperwork,” de Silva said.

According to State Treasurer Michael O’Brien, 22 of the 36 proposed reforms will be implemented by July 2014, with the remainder to be introduced in the near future.

He said the reforms will save Victorian business and the wider economy $715 million annually.

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