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ACA seeks refinement of Buyer Protections Regulations

The Victorian Department of Transport and Planning has introduced the Buyer Protections Regulations 2025 to strengthen consumer protections in Victoria’s building sector. These new regulations address gaps identified in recent government inquiries and exposed by high-profile building failures during the COVID-19 pandemic.

ACA VIC/TAS supports the government’s consumer protection objectives but is urging refinement to avoid unintended consequences for the industry and professional practice.

The inquiries found that the previous framework failed to adequately protect consumers in three key areas:

  • Insufficient oversight of building work quality
  • Limited access to domestic building insurance when problems arose
  • Lack of clear, accessible pathways for homeowners to fix building defects

To address these shortcomings, the Victorian Government has enacted comprehensive reforms through the Building Legislation Amendment (Buyer Protections) Act 2025 and the Domestic Building Contracts Amendment Act 2025.

The Buyer Protections Regulations 2025 support this legislation by introducing measures designed to:

  • Enhance consumer confidence in the building industry
  • Strengthen regulatory oversight of building work
  • Improve the overall quality of building standards and practices

ACA VIC/TAS has reviewed the proposed reforms and made the following recommendations and queries as part of a formal consultation process.

The ACA supports:·

  • Publication of rectification orders to provide transparency and an incentive for compliance
  • Two-year insurance cover period for non-major defects
  • Classifying waterproofing, weatherproofing, and structural defects as major defects
  • Providing compensation for reasonable demolition costs as an alternative to completion costs
  • Minimum threshold requirements for claims to improve scheme efficiency
  • Buildings to be assessed by qualified assessors, verified by prescribed professional associations
  • All defective work in common property and private residential lots must be reported
  • The total build cost is to include costs associated with the following: construction and fit out costs; demolition and site preparation; excavation; car parking; costs for the common property that is included in the property plan, including landscaping, pools, fencing and gates; professional fees; taxes applied in the calculation of the as-built construction
  • Scheme commencing on 1 July 2026, with no transition period
  • A developer bond scheme maturity date of 12 months after the assessor provides the final report to the Building and Plumbing Commission, as this aligns with most building contracts.

The ACA is concerned about:

  • Six-year major defects cover period being insufficient for defects that may not be evident within this timeframe
  • Maximum cover limit of $400,000 potentially inadequate for defects requiring total demolition
  • Sublimits for site security, accommodation, and pool work (prefer standard contracts with liquidated damages)
  • Payment of up to 30% of original contract cost for incomplete builds (prefer alternative approaches)
  • Ten-year rectification orders creating long-tail liability and increasing insurance costs
  • Government monopoly insurer raising efficiency and cost competitiveness concerns
  • Lack of clear, objective criteria for compensable defects
  • Unclear architect liability and responsibility within the regulatory framework.

In summary

The ACA supports the government’s objective to strengthen consumer protections in the building industry. However, we have urged careful consideration of our concerns to ensure the regulations do not create unintended consequences for industry participants, housing affordability, or professional practice.