New regulation of building professionals in Victoria: A dramatic change proposed to improve consumer outcomes

The Victorian Government has announced that the Victorian Building Authority (VBA) will be replaced by a new regulator following the publication of ‘The Victorian Building Authority - The Case for Transformation’ report.

The report utilised seven case studies to highlight the shortcomings in the VBA's management of complex building work complaints.

The report outlined various failures of the VBA which include:

• Poor complaint management systems within the VBA causing complaints to be duplicated, lost or ignored;
• No or very limited technical inspections carried out as part of the VBA’s response to complaints;
• Complainants being directed to other authorities when seeking the VBA’s assistance;
• VBA directing complainants to seek their own expert reports and not investigating matters unless these reports are commissioned by the complainants;
• Failure of the VBA to identify and investigate breaches and conduct issues by practitioners once a complaint has been made;
• Delays in progressing complaints by over 2 years in some instances; and
• The VBA’s treatment of complainants including internal documents naming some complainants as ‘emotional’ or ‘stirring up trouble’.

The report found "the VBA's management and culture failed consumers" and that "there is no doubt that [the VBA’s] regulatory activities could have been more effective in driving out poor and unscrupulous industry behaviour".

The independent review was conducted by Weir Legal and Consulting who made 20 recommendations for improving the VBA’s functions. The recommendations focus on enhancing the regulatory framework for building practices and consumer protections. Key proposals include developing trauma-informed training for VBA staff, empowering the VBA with new compliance enforcement tools, and ensuring builders are accountable for defects. Additional measures call for improving digital processes for permit submissions and establishing clear guidelines for plumbing compliance. Overall, the goal is to create a more robust and consumer-friendly building environment.

VBA CEO and Commissioner, Anna Cronin, has pledged in principle to support to the Report’s 20 recommendations for improving the regulator’s functions.

In response to the report, the Minister for Planning Sonya Kilkenny has announced the introduction of the Building & Plumbing Commission to oversee the industries across the state.

To pave the way for the introduction of the Building & Plumbing Commission, the VBA, Domestic Building Disputes Resolution Victoria, and the Domestic Building Insurance functions of the Victorian Managed Insurance Authority will be dissolved.

The Building & Plumbing Commission will also hold new powers to effectively regulate the industry landscape. The new regulations enhance the regulator's powers by introducing a rectification order for addressing building defects discovered after occupancy and requiring final inspections for apartment buildings over three stories before occupancy. Additionally, a strata bond will protect apartment owners by ensuring funds are available for defect rectification, and the Domestic Building Insurance will be expanded to allow claims against non-compliant builders regardless of their financial status.

It is anticipated that the increased powers and regulation will apply to all building professionals, including building surveyors, engineers, architects and draftspersons.

The Building & Plumbing Commission is not expected to come into effect until the first half of 2025.

Read the ‘Victorian Building Authority - The Case for Transformation’ Report here.