Introduced into the Victorian parliament on the 4th of March, 2025, the Building Legislation Amendment (Buyer Protections) Bill 2025 aims to improve the rights of consumers in Victoria’s construction industry.

Here is a look at everything you should know about the bill, and how, if you are a consumer, it might affect you.

What is the Building Legislation Amendment (Buyer Protections) Bill 2025?

The Building Legislation Amendment (Buyer Protections) Bill 2025, or the BLA Bill, has introduced several reforms to strengthen the regulatory framework that governs the domestic building work in the construction industry in Victoria.

The BLA Bill also addresses the issue of the division of responsibilities in the construction industry while looking forward to offering better insurance coverage for consumers. The bill is expected to amend several existing laws, which include the Domestic Building Contracts Act 1995 (Vic) (DBCA), the Building Act 1993 (Vic), the Subdivision Act 1988 (Vic) and the Victorian Civil and Administrative Tribunal Act 1998.

These amendments would be carried out to integrate several building regulatory functions to improve insurance requirements and enhance compliance mechanisms that the Victorian Building Authority (Authority) has access to.

The bill will allow the VBA to issue rectification orders for incomplete, non-compliant, or defective building work. This, in the long run, is expected to protect home buyers and improve building quality in Victoria.

What are the existing challenges in the construction industry in Victoria?

Even with several legal frameworks like the Building Act 1993 (Vic), the DBCA, and the Subdivision Act 1988 (Vic) in place, the state’s construction sector has faced several challenges. Here is a look at some of them.

1. Confusing Regulatory Division: The construction industry’s legal framework in the state of Victoria is spread across various laws and entities. This causes immense confusion to consumers.Key responsibilities like domestic building insurance, dispute resolution mechanisms and basic law enforcement provisions are spread across different bodies like the Victorian Building Authority (VBA), Consumer Affairs Victoria, and the Victorian Managed Insurance Authority (VMIA).Because of this fragmentation, the entire process of resolving consumer issues becomes inefficient and gets delayed.
2. Subpar or Incomplete Work Quality: Another problem the construction industry in Victoria faces is that of bad-quality, incomplete or non-compliant building work. Consumers are not able to depend on the existing laws to provide them with quick remedies, and builders can sometimes overlook these problems, which leads to more expenses for homeowners.
3. Cracks in the Domestic Building Insurance Process: Consumers are not adequately financially protected in times when builders don’t deliver quality work or shut shop for good. This is despite the existence of the Domestic Building Contracts Act or DBCA, which provides a framework for domestic building contracts.Though there is an insurance system in place, it only applies in specific circumstances, such as if the builder disappears, dies or goes bankrupt. This also has a limit of $300,000 for each single residential building, hardly leaving homeowners with the coverage they might need.
4. Dispute Resolution Processes that are expensive and slow: In circumstances where homeowners need to resolve disputes with builders, the process turns out to be lengthy and costly. Even with the DBCA backing, the dispute resolution processes in place are hardly efficient and do not have provisions to deal with non-compliant builders.
   
   

How does the Building Legislation Amendment (Buyer Protections) Bill 2025 aim to address these challenges?

The BLA Bill’s main focus lies on bringing about reforms in the domestic building sector of the construction industry in Victoria.

Here is a look at how the bill is expected to address the challenges of the building sector in Victoria to protect the rights of consumers.

1. More power to the VBA:

• The reforms in the act are expected to hand over power to the Victorian Building Authority, providing consumers with a one-stop solution to address the resolution of building disputes.
• The VBA will also be responsible for dealing with domestic building insurance instead of the Victorian Managed Insurance Authority.
• VBA will now be able to issue rectification orders for incomplete, non-compliant or defective works, failure to comply with which will attract a penalty of 500 penalty units for individuals and 2,500 for corporations. Developers will also not be allowed to apply for an occupancy permit till the defect is rectified.
• VBA will also be able to bring about a Statutory Insurance Scheme (SIS), which will provide insurance for buildings up to three storeys as the first resort.

2. Introduction of a Developer Bond Scheme: The scheme will apply to apartment buildings over three storeys and would require the developers to invest in a bond to take care of any potential defect rectification costs. This will provide more financial protection to homebuyers.

3. Subdivision Act 1988 (Vic) Amendments: These amendments state that unless the landowner has complied with the SIS scheme and/or other requirements under the Building Act 1993 (Vic), they cannot apply to register a plan regarding the subdivision for residential apartment buildings with over three storeys.

4. Sale of Land Act 1962 (Vic) Amendments:

• These amendments will ensure that vendors who have signed a pre-construction contract for spaces in residential buildings having more than three storeys cannot allow a purchaser to take possession of a property without the occupancy permit.
• This holds true even when the developer fails to comply with the SIS scheme.
• The amendments also state that any information surrounding the statutory insurance cover under section 137B of the Building Act 1993 (Vic) needs to be disclosed.

Final Word: The BLA Bill and Consumer Protection

The introduction of the Building Legislation Amendment (Buyer Protections) Bill 2025 in the Victorian parliament on the 4th of March, 2025, was a major step towards improving consumer protection in the building industry in the state.

The bill aims to organize the regulatory mechanism in Victoria and implement robust financial protections in place to offer more safety to homebuyers. The government hopes that these amendments will help create a more straightforward, efficient, and fair system for consumers who face building issues.

For homeowners, builders, and developers to better understand how these amendments can affect their rights and obligations, specialists in construction law should be consulted. We at Level Playing Field Lawyers have over 15 years of experience in the construction industry and are well-equipped to guide you through construction contracts, dispute resolution and compliance issues.