News

In its final sitting week, the Victorian Parliament is being urged to pass new domestic building consumer protections into law as a matter of priority. The Building Legislation Amendment Bill 2014 would see improved standards, a new dispute resolution procedure and the creation of a Building Consumer Protection Fund to protect consumers from dodgy or insolvent builders.

Under the current home building warranty insurance scheme, consumers experiencing problems with a builder could only seek financial coverage for an incomplete or dodgy building if their builder was ‘dead, disappeared or insolvent.’ Under the new system consumers will also be able to apply for financial coverage when a builder is deregistered or has their registration suspended, or when a ‘Rectification Order’ issued under the new dispute resolution system is not complied with.

Gerard Brody, CEO of Consumer Action, said the proposed law has been in development since 2012 and would address many of the problems currently faced by consumers. ‘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.

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

‘Consumer advocates have put significant time and resources in to help shape a fair and effective bill, but if Parliament doesn’t pass it in this final sitting week it will all have been for nothing. Home owners will continue to be ripped off by dodgy builders and there will be little they can do about it,’ said Mr Brody.

Mr Brody said the success of the proposed new law would depend on the culture of the industry regulator, the Victorian Building Authority (VBA), and its willingness to take enforcement action, but that passing the Bill was necessary so the VBA has the tools it needs to protect consumers.

‘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.

‘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.

‘The family home is likely to be one of the biggest financial investments of someone’s life, so measures which protect consumers in the case of unexpected problems are very welcome and should be a priority for all sides of politics,’ said Mr Brody.

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Media contact: Dan Simpson, 0413 299 567