The Victorian Government has introduced laws into Parliament today to prevent builders accepting deposits under a major domestic contract before they have taken out the required insurance.

The introduction of the bill follows the collapse of Porter Davis Homes earlier this year, when consumers lost their deposits after the firm took the funds but didn’t take out the necessary cover.

New offences include a penalty of up to $96,000 for an individual or $480,000 for a company if the insurance requirements are not met.

“We’re delivering on stronger protections for consumers and sending a message to industry on the importance of adhering to insurance requirements, giving consumers greater confidence in the building industry,” Consumer Affairs Minister Gabrielle Williams said.

The Victorian Building Authority (VBA) says it will have more powers to act if builders are found to have done the wrong thing under the reforms, while the regulator is continuing to audit compliance with domestic building insurance requirements.

The Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023 reforms relate to contracts for domestic work costing more than $16,000.

The VBA has also released a new Regulatory Policy Statement that sets out its objectives to improve consumer outcomes, how it will use its powers and how it intends to regulate and ensure compliance with building regulations.

“Importantly, it puts consumers at the heart of what we do as a regulator,” VBA CEO Anna Cronin said.

“Our is aim is to be both a targeted enforcer and a trusted regulator by focusing our efforts on what best protects the Victorian community.”