ACA VIC/TAS responds to Buyer Protections Bill 2025

Paul Viney , 16 June 2025

The Victorian Parliament has passed the Building Legislation Amendment (Buyer Protections) Bill 2025, which will have significant impacts on the construction industry, including architectural practice. The ACA has been actively engaged in reviewing this legislation and has submitted detailed feedback to parliament.

The Building Legislation Amendment (Buyer Protections) Bill 2025 passed both houses and was given royal assent in early June 2025.

The ACA has worked with the Housing Industry Association, Consult Australia and the Australian Institute of Building Surveyors to review the Victorian Buyers Protection legislation and submit detailed feedback to parliament.

WHAT ARE THE CHANGES?

• Enhanced Regulatory Authority: The Victorian Building Authority will be replaced by the Building and Plumbing Commission, which will have strengthened enforcement capabilities and broader regulatory powers.
• Post-Occupancy Enforcement: The new regulator will have the authority to issue rectification orders, even after occupancy permits have been issued, extending oversight beyond project completion.
• Expanded Liability Framework: In cases involving complex building defects, liability periods may be extended beyond the standard 10-year timeframe.
• Developer Financial Security: Multi-storey apartment developers will be required to provide financial bonds as security for potential future rectification work.
• Builder Financial Standards: Registered building practitioners must demonstrate compliance with enhanced financial capacity requirements under the reformed Statutory Insurance Scheme.
• Strengthened Penalty Framework: The Building and Plumbing Commission will have access to more substantial penalty powers to address regulatory non-compliance.

ACA’s POSITION ON THE LEGISLATION

While the ACA supported the overarching intent of the Bill to enhance consumer protection in the residential construction sector, we have significant concerns about the lack of detail in the current legislation. ACA Victoria/Tasmania President Paul Viney wrote to Parliament highlighting that these shortcomings could unintentionally trigger further instability and confusion for both consumers and industry participants, particularly regarding insurance provisions.

The ACA, the Australian Institute of Building Surveyors, Consult Australia and the Housing Industry Association have been working collectively to highlight the issues and seek clarification of the regulations on the concerns being raised, and have contributed to questions being raised in parliament. We understand the need to improve consumer confidence in industry but it needs to be done in a way that’s fair to all parties. In collaboration with the HIA, Consult and AIBS, the ACA identified five critical issues of concern:

Rectification Orders

The ACA recommended that rectification orders be restricted to serious defects only. This limitation would ensure proportionate enforcement action and provide clear guidance to both regulators and industry practitioners about when such orders are appropriate.

Dispute Resolution Process (Section 45(1A) of the DBCA)

The Bill requires builders to seek Building Protection Commissioner approval before lodging payment disputes, yet provides no criteria, timeframes, or review mechanisms for this approval process. The ACA recommended that this requirement be either removed entirely or substantially revised to prevent unnecessary barriers to legitimate dispute resolution.

Insurance Triggers – Legislative Clarity Required

The Bill fails to specify insurance triggers, delegating this critical detail to future regulations. The ACA believes these triggers should be explicitly defined within the Act itself. Section 137M should clearly state when the Statutory Insurance Scheme becomes available to owners: upon builder insolvency, death, or disappearance; when builders fail to pay court or VCAT-ordered compensation; or when builders fail to comply with rectification orders within specified timeframes (following completion of any VCAT appeals).

Definition of Defects and Standards

The absence of clear defect definitions represents a fundamental flaw in the legislation. Without authoritative standards, compounded by the ongoing review of the “Guide to Standards and Tolerances”, consumers may reasonably expect insurance coverage for normal building variations such as minor concrete cracking from soil movement or routine paint deterioration. This ambiguity risks creating unrealistic consumer expectations and potentially fraudulent insurance claims.

Adjudication and Role Clarity

The Bill provides no guidance on claim validation processes or responsible parties. It remains unclear whether the VBA, insurers, independent assessors, or a new entity will determine claim validity. Critically, the legislation fails to specify whether builders will have the opportunity to inspect and rectify alleged defects before insurance claims proceed. Establishing transparent adjudication processes with appropriate procedural fairness is essential for both consumer protection and industry confidence.

Members should stay informed about these regulatory changes as they may affect project delivery, compliance requirements, and client expectations. The ACA will continue to advocate strongly for its members, working collectively with other groups where positions are in alignment to strengthen our voice. We will continue to report back to our members about our advocacy efforts and impact.

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