This article was updated on 13 March 2025.

This week the Victorian Labor Government has introduced to Parliament one of the most significant proposed amendments to the building industry in recent history.

The Building Legislation Amendment (Buyer Protections) Bill 2025 (Amendment Bill) proposes to amend the Building Act 1993 and Domestic Building Contracts Act 1995 (among others) with its primary focus being the protection of purchasers of buildings.

The following are some of the key amendments the Amendment Bill proposes to introduce:

1. New functions and powers for the Authority

In October 2024, the Allan Government announced that the Victorian Building Authority (VBA) will be superseded by a new regulator – the Building and Plumbing Commission. This new body will have enhanced functions and powers.

While the Amendment Bill does not yet establish the new Commission, it does give the VBA new functions and powers in the meantime. These include:

• Administering a new statutory insurance scheme: the VBA would be the sole provider of domestic building insurance, meaning the VBA will have oversight of not only practitioner registration and building permit applications, but domestic building insurance too. The VBA would take over from the Victorian Managed Insurance Authority, and all existing contracts of insurance would be transferred to the VBA. A further function under this new statutory insurance scheme includes the ability for the VBA to seek alternative builders to be engaged to carry out or complete building work for owners who have an entitlement under the scheme.

• Issuing rectification orders: while the VBA can already issue directions to fix building work, that power is limited to the building phase. Proposed amendments will extend the VBA’s powers so that it can require the rectification of incomplete, non-compliant or defective buildings for up to 10 years after the work was completed. Rectification orders could be issued to builders as well developers of residential apartment buildings – or both.

• Administering domestic building disputes: the VBA would take over from Consumer Affairs Victoria the administration of domestic building work disputes. That includes the conciliation function run by Domestic Building Dispute Resolution Victoria. This would provide the VBA with greater powers to resolve disputes between owners and builders.

2. New developer bond scheme

The Amendment Bill would levy a charge on all residential building projects over 3 storeys in height to be held as security for the rectification of defects. The bond will be set at 3% of the total build cost^[1], unless another amount is prescribed. The bond is payable by the developer before an occupancy permit can be obtained.

Developers must also, at their cost, nominate and then appoint a building assessor to carry out inspections and prepare reports. A preliminary report will be required around 18 months after the occupancy date, and a final report will be required around 2 years after the occupancy date.

Owners will be able to make a claim to the VBA on the security for rectification of defects, as will the assessor for any outstanding payments.

Importantly, a purchaser of an off-the-plan apartment will be entitled to rescind their contract if the developer has not paid the bond or has paid a bond that is less than the required amount.

3. Introduction of minimum financial requirements

New financial probity requirements are proposed to be introduced which would include prescribed minimum financial requirements for builders. Builders could be disciplined, fined or even have their registration suspended or cancelled if they do not meet the minimum financial requirements.

The precise details of these requirements will not be known until regulations are made prescribing the requirements. Minimum financial requirements are imposed on builders in Queensland which may provide some insight into what might be in store for Victorian builders.

4. Prohibitions on registering land

Amendments to be made to the Sale of Land Act 1962 will make it an offence for owners of certain land – primarily land for the development of residential apartment buildings – to apply to register that land if it is the subject of a notice. This includes notices relating to rectification orders in respect of non-compliant building work and defective building work.

The Building Legislation Amendment (Buyer Protections) Bill 2025 signifies some of the most substantial consumer protection amendments since the Building Legislation Amendment (Consumer Protection) Act 2016.

Many of the proposed amendments reflect the Government’s response to the Stage 1 and Stage 2 Reports produced by the Victorian State Government’s Building Reform Expert Panel. You can read more about those reports here.

^{[1] Clarification was made that the proposed developer bond would be set at 2%. A house amendment has been foreshadowed to correct the figure in the Amendment Bill.}