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All domestic building work in Victoria is controlled by the Domestic Building Contracts Act 1995. This legislation is overdue for a major review.
The legislation is out of date and imposes a number of unnecessary or poorly targeted restrictions on both owners and residential builders. The requirements around cost escalations, progress payments and timing of signing contracts are not fit for the purposes of builders or consumers.
In addition should a building dispute arise between a consumer and a builder, both parties are poorly served by the existing measures to resolve matters.
The mandatory domestic building dispute resolution process run by Domestic Building Dispute Resolution Victoria (DBDRV) is complex, time-consuming and inappropriate. The process should be abolished.
The agency was to provide a “fast, free and fair” dispute resolution process for disputes between consumers and domestic builders. Yet since its inception the process has failed on all accounts.
The process is slow, taking months for matters to be listed for conciliation. The outcome is often no settlement and subsequently delays the commencement of legal proceedings in VCAT.
If a matter proceeds from the DBDRV to be resolved at VCAT, there are now also significant delays to have matters heard, which is stressful for all parties. This backlog is clearly a result of the initial process being inadequate.
Builders seeking final payments for domestic building work are especially disadvantaged by these delays and given the current aggravated cash flow pressures on builders, it is inappropriate to have regulatory processes that perpetuate the delays.
Finally, the current legislation treats disputes between developers and builders as if it were a dispute between a consumer and a builder. This is not necessary, as consumer protection in these instances is not required where the client is a business.
These disputes should be heard in court, not DBDRV or VCAT, as they are business to business matters and do not directly involve consumers.
Undertake a major review of the Domestic Building Contracts Act 1995 to ensure that its requirements are fit for purpose, modern and do not impose unnecessary burdens on builders and consumers
Abolish the DBDRV and allow builders and consumers to efficiently conciliate building disputes through VCAT
Allocate current funding for the DBDRV to VCAT and the court system to allow these existing bodies to continue to hear domestic building disputes
If the DBDRV cannot be abolished, the conciliation process must be optional and not mandatory
Provide more resources to VCAT to address the backlog of cases in the Building and Property List to save time and money for builders and consumers
Introduce different regulatory requirements for contracts between developers and builders and end unnecessary restrictions on this building activity.