The Only Constant is Change

So said Heraclitus, who was a busy boy writing down loads of sage advice to the thirsty hordes of Ancient Greeks who couldn’t get enough of his philosophy. He also bares an uncanny resemblance to Bill Hunter.

The new regulators of the Victorian Building Industry have paid attention to his advice, and indeed there is change at hand in the building industry.

The Victorian Building Authority (VBA) came into effect in July 2013. It regulates building and plumbing practitioners and its role is to oversee the conduct of those industries.

The VBA have a number of functions and responsibilities including:

  • Registering, licensing and disciplining of builders and plumbers (having taken this over from the Building Practitioner’s Board)
  • The provision of expert technical advice to the industry
  • To undertake inspections, investigations and audits to enforce compliance with the Building Act 1993.
  • Consumer protection
  • Monitoring and collection of building permit levies
  • Overseeing the work of building surveyors, builders and owner-builders.

In order to fulfil their obligations, the VBA has developed new legislation in conjunction with the Victorian Government and industry bodies – which has been passed and comes into effect from 4 July 2016. It will affect Owner Builders, Registered Builders and Building Surveyors.

The Building Legislation Amendment (Consumer Protection) Bill 2015 was passed into law on 19 April 2016 and amends the Building Act 1993.

Not all of the amendments take effect on 4 July 2016, indeed some of the changes announced will be implemented on a staggered basis with all changes taking effect by 1 July 2017.

Owner Builders

A land owner, including an owner-builder is responsible for ensuring building work undertaken on their land – whether by themselves or any other person – is carried out under a current building permit and complies with the Building Act, the Building Regulations and the permit. They can do this themselves (as an owner builder), or engage a building practitioner or architect to carry out the building work. A current building permit needs to be taken out when the value of the works exceed $16,000 including GST (formerly $12,000).

An owner builder needs to obtain a certificate of consent, which is a written approval from the Building Practitioners Board (soon to be the VBA) that enables you to obtain a building permit and carry out domestic building work as an owner-builder on your own land.

Previously owner builders were not subject to inspections from the Building Practitioners Board, however the VBA now has powers to inspect the work of owner-builders.

Building Works

The definition of “Building Works” is extensive and means work for or in connection with the construction, demolition or removal of a building.

Building works includes (but is not limited to):

  • Construction of swimming pools and spas
  • Bathroom, kitchen or laundry renovations
  • Roof tiling
  • Bricklaying
  • Framing
  • Waterproofing
  • Cabinet making, joinery and the construction of staircases
  • Window or door replacements and installations
  • Restumping and reblocking
  • Plastering
  • Painting and decorating
  • External wall cladding
  • Granny Flats
  • New Homes
  • Ground Floor and Second Storey Extensions

Care needs to be taken with any work on your home and consideration has to be given to whether you are required to obtain a permit to carry out such works. If a permit is required this needs to be obtained through a registered building surveyor. The surveyor has obligations to ensure that the works are carried out lawfully and in accordance with the Building Act. The contract also needs to be covered by domestic building insurance.

If a land owner wants to carry out building works with a value greater than $16,000 and does not want to do the works as an owner builder, then the land owner must engage a registered builder practitioner under a major domestic building contract.

Building Surveyors

There are also changes to the regulation of building surveyors which provides circumstances in which a private building surveyor may not act. If the building surveyor:

  • Prepared the design of the building or building works
  • Is an employee, contractor or financial beneficiary of the designer
  • Is a financial beneficiary of the building work.

The building surveyor cannot act in these circumstances.

This is aimed at ensuring the building surveyor is at arms-length to the builder or owner builder and that no conflicts of interest exist in passing work that has not met the building code or any conditions around a permit.

The building surveyor’s role is to oversee the building works to ensure it meets the standards required under the building code, and is in accordance with the permit.

When this has not occurred, there is a specific form that the surveyor needs to complete known as a “Written Direction to Fix Building Work”. The building surveyor has a positive obligation, if, after inspection that he or she reasonably believes that the works carried out fail to comply with the Act, the Regulations or the permit, to issue this direction.

There is, however, a discretion to give an oral direction which needs to be complied with within seven working days or the direction.

If the oral direction is not complied with within the prescribed time, then the building surveyor must then issue the written direction. The written direction goes to both the registered building practitioner (or owner builder) and the VBA.

Penalties

There are significant penalties that can be imposed on the land owner, the building practitioner or the building surveyor that carries out work without obtaining the necessary permit. The penalty is 500 penalty units for an individual or 2,500 penalty units for a corporation. One penalty unit equates to $151.67.

VBA’s Power to Inspect and Direct

The VBA also have the power to make their own directions if their inspections reveal failure to comply. THE VBA’s authority and power to issue directions usurps that of the private building surveyor.

The VBA will also take over the registration and licensing of builders from the Building Practitioners Board, and there will be changes to the appointment of building surveyors so that individual clients will be able to make their own choice of building surveyor. These changes will be implemented prior to July 2017.

The Master Builders and Housing Industry Associations have worked with the Victorian Government to bring about these changes. They are designed to strengthen the laws around construction and ultimately to protect consumers from poor work practices and conflicts of interest that lead to poor quality workmanship and cutting corners.

Use a Professional

The legislation surrounding building works is complicated and thought needs to be given to your legal obligations as a land holder in any such undertaking. If you’re considering renovations or extensions to your existing home, building a carport or a complete new home you should consider engaging professionals so the works are carried out professionally, and with a minimum of risk to you.