The Victorian government has introduced major reforms to the Domestic Building Contracts Act 1995, aiming to deliver stronger protections for Victorians building or renovating their homes while supporting the state’s building industry.
The reforms, introduced to Parliament recently, are designed to make domestic building contracts fairer and clearer, with a focus on consumer protection and industry stability.
Key changes include updated rules governing when and how builders are paid, with prescribed deposit limits and progress payment stages to be set in regulations.
For contracts valued at $1 million or more, builders will be permitted to use cost escalation clauses to manage unforeseen expenses, but with a strict 5 per cent ceiling on price increases and additional consumer safeguards.
The reforms also address contract splitting and grant consumers the right to cancel contracts if project timelines extend by more than 50 per cent or costs rise by over 15 per cent.
Furthermore, Victoria’s laws will be brought into line with other jurisdictions by removing the preparation of plans, specifications, and bills of quantity from the definition of domestic building work.
The Bill also paves the way for the establishment of the Building and Plumbing Commission, a new regulator that will consolidate powers from Consumer Affairs Victoria into the Victorian Building Authority.
This move will centralise building quality control, insurance, and dispute resolution within a single agency, streamlining oversight and enforcement.
The government consulted widely with consumer, banking, and builder groups, including the Housing Industry Association, the Master Builders Association of Victoria, and the Consumer Action Law Centre, to shape these reforms.
These measures are part of a broader response to industry challenges highlighted by the collapse of Porter Davis Homes in 2023, which left many Victorians without insurance or recourse.
The reforms continue the government’s efforts to modernise the building system and deliver safer, more compliant, and durable homes for the community.
VIC Minister for Consumer Affairs Nick Staikos said: “These reforms will strengthen protections for consumers while supporting the building industry — helping get more homes built.”
VIC Minister for Housing and Building Harriet Shing added: “As we build and approve more homes across the state to meet demand, we’re also delivering reforms that focus on certainty, quality, and accountability.
“These reforms strike an important balance for buyers making the biggest purchase of their lives, and for the vast majority of builders who take great pride in their work.”
