Victorian Parliament urged to pass domestic building consumer protections

The Building Legislation Amendment Bill 2014 looks to improve standards, introduce a new dispute resolution procedure and create a Building Consumer Protection Fund to protect property buyers from insolvent or dodgy builders.

The Victorian Parliament has been urged to pass these new laws by Consumer Action chief executive Gerard Brody.

Currently, those who have an issue with a builder are covered under the home building warranty insurance scheme.  However, this scheme only covers them in the case of an incomplete or dodgy build if the builder is dies, disappears or becomes insolvent. It does not cover them for if they are deregistered, have their registrations suspended or when a rectification order is issued.

This new Bill aims to cover the shortfall, explained Brody, noting that the law has been in development since 2012.

“Home building warranty insurance has long been referred to as junk insurance because it’s so hard to claim. Not only do consumers have to spend thousands of dollars to be successful at VCAT, they then have to take action to wind up a builder before any claim can be made,” he said.

“The proposed new fund would ensure consumers have a remedy when there is uncompensated loss as a result of a building dispute.”

The success of the proposed law depends on the Victorian Building Authority’s (VBA) willingness to take enforcement action.

“The proposed law would mean independent inspectors from the VBA could make binding Rectification Orders to settle disputes. This should mean that consumers don’t have to go to VCAT, which has proven to be an expensive and inappropriate forum for many building disputes,” he said.

“The current system is broken—dodgy or insolvent builders can leave families with unsafe or unfinished homes and there is very little that can be done about it. Often they’re tens of thousands of dollars out of pocket and are left with an uninhabitable house.”