Reforms aiming to overhaul the Victorian builders’ warranty scheme and improve defect protections have been introduced into state parliament.

The bill will create a Building and Plumbing Commission that will incorporate the Victorian Building Authority, Domestic Building Dispute Resolution Victoria and the domestic building insurance operations of the Victorian Managed Insurance Authority.

“We’re bringing together building insurance, dispute resolution, and compliance monitoring and enforcement functions under one regulator, making it easier for Victorians to access vital services and resolve issues.” Consumer Affairs Minister Nick Staikos said.

The VMIA operations will move to the new regulator next year and a “first resort” domestic building warranty will cover contracts valued above $20,000 on properties of three storeys and below.

Cover includes lost deposits – including cases where a builder has not obtained the insurance – incomplete building work and non-compliant or defective work.

The government says the first resort scheme will allow consumers to claim when an issue is first identified, so they won’t face large out-of-pocket costs for fixing defects. Currently, consumers can access the insurance only as a last resort when a builder becomes insolvent, disappears or dies.

The reforms introduce a developer bond scheme, in line with NSW arrangements, to provide protection against defective work in buildings four storeys and higher.

The bond is paid by developers and held by the regulator, with the money available for rectification work if building issues emerge.  

The scheme will start at the end of this year. Longer term, the government plans to introduce a 10-year decennial liability program to cover apartment owners. 

The government says tougher enforcement powers will allow the Building and Plumbing Commission to stop the issuing of occupancy permits or the completion of off-the-plan sales if serious defects are not rectified, and it can order “dodgy” work rectification up to 10 years after an occupancy permit is issued.

“It’s essential that consumers are protected and supported when buying or building their home, and we’ll continue to work with industry to get the balance right, and deliver quality homes of a consistently high standard,” Housing and Building Minister Harriet Shing said.

The Building Legislation Amendment (Buyer Protections) Bill 2025 was introduced into the parliament yesterday.

The Department of Transport and Planning has also released a regulatory impact statement to start consultation on two proposals, including a new building manual to keep documents and permits in one place, as well as details of maintenance work completed.

More mandatory inspections during construction and before waterproofing and plastering are also being considered, to detect non-compliance earlier.

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