Building Act reforms to ensure Porter Davis mistakes aren’t repeated

17 MAY 2023 By Kyle Robbins 8 min read Hotspots

Following the collapse of one of the state’s largest builders last month, the Victorian government is acting to provide greater protections to consumers.

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Porter Davis’ liquidation in early April left over 2,500 building contracts in the lurch, with supply chain delays and labour shortages being two of the primary factors blamed for the collapse. Late last month, news broke that over 500 families had discovered their deposits had been lost due to the company’s failure to take out insurance on their behalf, which spurred the Victorian government to provide a one-off relief scheme to the afflicted consumers.

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Since then, the Andrews government has announced reforms to the Domestic Building Contracts Act 1995 and strengthened domestic building insurance requirements, providing Victorian building regulators with more powers to monitor whether builders are meeting their obligations under the law to take out domestic building insurance prior to receiving a deposit.

Additionally, the changes will introduce tough new penalties for any operators failing to comply with these requirements.

The Victorian Building Authority (VBA) will audit builders regarding the collection of deposits and the purchase of domestic building insurance.

Victorian Minister for Planning, Sonya Kilkenny, outlined that the reforms are “ensuring Victorians can have faith in the construction firms who build their homes, protecting their hard-earned savings.”

Over the last 12 months, the Australian construction industry has felt the brunt of significant global economic headwinds, including rising supply chain costs. Due to this, and born from consultation with the sector, the Victorian government will consider providing an extended transition for some new National Construction Code requirements that are currently scheduled to commence in October.

Opportunities to review the role of all regulators and improve the information provided to consumers about a builder’s obligation to take out domestic building insurance have also been floated as part of the reform package.

These initiatives will form part of the ongoing building reform program currently underway to reshape the Victorian building system, with State Premier Dan Andrews revealing that “these reforms are part of a comprehensive review to modernise Victoria’s building system, delivering better protection for Victorians building a home while providing clarity to the building industry.”

In other news, Anna Cronin has been appointed as the new chief executive officer (CEO) of the VBA. She has been tasked with assisting the agency in delivering these reforms.

The introduction of any further reforms will be staged to allow strong consultation with the building industry.

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