News

Consumer Action Law Centre has welcomed the introduction into State Parliament of a bill to improve building consumer protection.

The Building Legislation Amendment (Consumer Protection) Bill 2015 will create a new body called Domestic Building Resolution Victoria to resolve building disputes. Consumer Action CEO Gerard Brody said it was welcome that the new body will have the power to award compensation as well as order builders to repair shoddy work.

“Australia’s most recent national consumer survey found that 28 per cent of consumers who engage a builder experience a problem. In the worst cases, long-running disputes can mean that families lose hundreds if not thousands of dollars, not to mention the loss of enjoyment of their home.

“Currently, consumers must engage in lengthy and expensive legal processes at the Victorian Civil & Administrative Tribunal (VCAT) if they need a binding order against a builder. A new dispute resolution body should mean that disputes are resolved quickly and more easily”, said Mr Brody.

While orders of the new Domestic Building Resolution Victoria can be appealed to VCAT, there will be costs risks for parties in doing so.

“The test of this new regime will be whether disputes will be kept out of VCAT. In other industries, consumers benefit from independent ombudsman to resolve consumer disputes—it will be important for this new body to operate similarly. To be effective, it will need to be no-cost to consumers, independent of industry, and non-legalistic”, said Mr Brody.

Consumer Action also welcomed other aspects of the new consumer protections, including:

• The abolition of the Building Practitioner’s Board which has been shown to be ineffective in ensuring only qualified, competent and suitable builders are able to trade;
• Stronger registration standards for building practitioners, to be reinforced by new codes of conduct for building practitioners; and
• Improved and timely disciplinary processes and sanctions.

Mr Brody said that the Government needed to also examine and fix building warranty insurance.

“The Victorian Auditor-General has found that consumers are paying millions of dollars in unnecessary fees to insurance agents and industry brokers associated with domestic building insurance. This gravy train needs to end.

“To be worthwhile, building warranty insurance should be easier to access if things go wrong. It needs to pay out if a builder does not comply with an order of the new dispute resolution body”, said Mr Brody.