The Victorian Building Authority to be reincarnated as the Building & Plumbing Commission

The Victorian Government has announced plans to bring together the Victorian Building Authority (VBA) with the Domestic Building Disputes Resolution Victoria, and the Domestic Building Insurance (DBI) function of the Victorian Managed Insurance Authority. The new regulator will be named the Building & Plumbing Commission.

This announcement comes after Weir Legal and Consulting released their findings from their government commissioned independent review of the Victorian Building Authority titled: ‘Victorian Building Authority – The Case for Transformation.’

The Weir Report found that the VBA has, for several years, failed to effectively regulate the Victorian building industry creating an environment where ‘poor standards of building work and unethical conduct have been allowed to flourish.’ The authors demonstrate this through seven case studies, Gadens represented one of the affected owners in the case studies.

Powers to order builders to rectify defects before they get an Occupancy Permit

• The Weir Report recommends that the VBA be provided with the power to require developers to notify the VBA at least six months before they intend to seek an Occupancy Permit. This would allow time to conduct audits of high-risk sites and issue Direction to Fix (DTF) orders for serious defects. An Occupancy Permit would only be issued following rectification of the defects identified in the DTF.

Powers to require that defects are fixed after the site receives an Occupancy Permit

• The authors recommend that the VBA be given the power to mandate that a builder return to a building to rectify defects in their work after an Occupancy Permit has been issued.

Anti-phoenixing recommendations

• That the Victorian Government considers implementing statutory mechanisms to ensure that related entities, directors, builders, and developers who become insolvent can be held liable for the defective work of a failed company.
• That the VBA be given the power to suspend builders who have previously been directors of companies who have gone into external administration.

Domestic Building Dispute Resolution Victoria (DBDRV) process

• The DBDRV process provides a capacity for independent inspectors to issue rectification orders to builders for defects. The authors of the Weir Report contend that there needs to be more funding so that independent inspectors can be utilised more frequently. They also recommend that the Domestic Building Contracts Act 1995 (Vic) be amended further to enable the VBA to immediately suspend the registration of a builder who fails to comply with a rectification order.

Improving design documentation quality in Victoria

• The Weir Report recommends that the Building Act 1993 (Vic) be amended to require registered design practitioners to submit their finalised designs to the relevant surveyor and make a declaration that they comply with the relevant standards.
• Builders should also be required to submit fully developed design documentation before they can be given a staged building permit.

The way forward

It is unclear which of these recommendations the Victorian Government plans to implement. However, we understand that the government is seeking to implement changes in the first half of 2025.

The Minister for Planning Sonya Kilkenny released a statement in response to the report asserting that the VBA would be replaced by a “new more powerful watchdog – [the] Building & Plumbing Commission…” which would “bring together all aspects of building quality control – regulation, insurance and dispute resolution – into a single agency.” The scope and power of this new organisation will be largely unknown until legislation is passed through both houses of the Victorian Parliament.

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Authored by: 
Adrian Clifford, Partner
Daniel Mitchell, Lawyer