Victoria Premier Daniel Andrews has announced plans to reform the state’s compulsory builders’ warranty insurance (BWI) scheme after compliance gaps were found following the collapse of Porter Davis. 
 
Victorian laws require a builder to obtain domestic building insurance – as BWI is referred to in the state – before taking a deposit or any other money for residential works of $16,000 or more. 
 
But hundreds of Porter Davis’ customers had no BWI after liquidators combed through its accounts and found it had not acquired the insurance – and the customers had paid their deposits first. 
 
As part of the package unveiled last week the Government will reform the Domestic Building Contracts Act 1995 and “strengthen” domestic building insurance requirements. 
 
Building regulators will also have more powers to monitor whether builders are meeting their obligations under the law to take out the insurance prior to taking a deposit, with tough new penalties for failing to comply with these requirements. 
 
Another reform measure will see the Victorian Building Authority (VBA) auditing builders in relation to the collection of deposit and purchase of domestic building insurance. 
 
A statement from Mr Andrews’ office says the “liquidation of Porter Davis exposed a concerning practice of builders not taking out the required insurance when accepting deposits”. 
 
“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,” Mr Andrews said in the statement.