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Whether you are a Builder, a Developer, Tradie, Subcontractor or another person who works in the domestic building industry – big changes are being implemented which will affect you directly.
The Building Legislation Amendment (Buyer Protections) Bill 2025 was enacted on 3 June 2025.
Builders, homeowners and developers need to be aware of the new buyers' protections that are now legislation due to the recent introduction of the Building Legislation Amendment (Buyer Protections) Act 2025 (Buyers Protection Act), which came into operation on 1 July 2025.
Key amendments have been made to the Building Act 1993 and Sale of Land Act 1962. The amendments greatly impact residential building as they relate to building insurance, domestic building contracts, licensing, assistance and rectification orders. Outlined below is a succinct summary of the amendments and preliminary details of how they impact the parties when building residential properties in Victoria.
Establishment of the Building & Plumbing Commission
The new Building & Plumbing Commission (BPC) will now operate as a comprehensive body which incorporates the Victorian Building Authority (VBA), Domestic Building Disputes Resolution Victoria (DBDRV) and the Domestic Building Insurance (DBI) function of the Victorian Managed Insurance Authority (VMIA).
The BPC will also have expanded powers vested beyond the existing powers of each authority.
What does the new Buyer Protections Act mean for builders?
Notice of insurance cover
Ordinarily, registered building practitioners are required to be covered by insurance and must provide proof of their insurance cover on an annual basis.
From 1 July 2026, builders must comply with the new requirements of the Statutory Insurance Scheme (SIS).
Proof of insurance cover (i.e. a certificate of insurance) is not required to be provided if it relates to the construction of homes or buildings with 2 or more homes with a rise of 3 storeys or less.
A 'Notice of Cover' will be required to be given to the homeowner – alongside a building permit for building work carried out under an 'insurable domestic building contract' (which is a newly defined term under the Buyers Protection Act and replaces the definition of 'major domestic building contract' – see here for further explanation). This is now deemed evidence of compliance with the builder's requirement to hold insurance. The 'Notice of Cover' is issued by the BPC after it accepts payment of an applicable insurance premium for domestic building work.
Applicable insurance premium
A builder who enters into an insurable domestic building contract must pay the applicable insurance premium to the BPC, on behalf of the homeowner, before the first of the following occurs:
- 10 business days elapse after the day on which the insurable domestic building contract is entered into; or
- the domestic building work starts.
If the building work to be carried out under a non-insurable domestic building contract is varied and the contract becomes an insurable domestic building contract due to the variation and meeting the price threshold per the Domestic Building Contracts Act 1995 (Vic), then the builder must pay the applicable insurance premium to the BPC, on behalf of the homeowner, within 10 days after the variation.
If 'speculative' domestic building work is carried out by a builder, then the builder must pay the applicable insurance premium for the work to the BPC, on behalf of the homeowner, before the work starts.
The method of calculating the applicable insurance premium payable by builders under the SIS will be determined by the BPC when the requirement to pay the applicable insurance premium comes into operation (on 1 July 2026 or earlier).
Rectification orders
In addition to directions to fix building work, emergency orders and building orders, the BPC may issue rectification orders for the rectification of incomplete, non-compliant or defective building work. Rectification orders can be issued 10 years after the date the occupancy permit or certificate of final inspection was issued.
Before issuing the order, the BPC may request the homeowner and builder to participate in a dispute resolution process before determining whether the building work is incomplete, non-compliant or defective.
- The BPC will be able to issue rectification orders, with completion timeframes, to the builders and their counterparts requiring them to: complete the building work;
- rectify the non-compliant or defective building work; or
- rectify any damage caused by the non-compliant or defective building work or by the building works being carried out at the time.
The recipient of a direction to fix and other orders, simultaneously, is expected to comply with both by attending to each direction to fix and order in order of their date of expiry.
New Obligations for developers of residential apartment buildings
Pay heed to the occupancy permit application date
The developer of a residential apartment building with a rise of more than 3 storeys must ensure they give the BPC notice of their intention to apply for an occupancy permit before the end of the applicable period, which is:
- for a residential apartment building which is to be completed within 6 months, the period commencing 6 months before the occupancy permit application date and ending 30 days before the occupancy permit application date; and
- in any other case, the period commencing 12 months before the occupancy permit application date and ending 6 months before the occupancy permit application date.
Developer bond
Before the occupancy permit application date, the developer of a residential apartment building must arrange for a developer bond to be executed. The amount to be secured by a developer bond must be 2% or a prescribed percentage of the estimated total cost of the building work.
After the developer executes a developer bond, they must within 7 days give notice of the following matters to the BPC:
- that a developer bond has been executed;
- the "total build cost" of the residential apartment building (i.e. the estimated total cost of the building work carried out for or in connection with the construction of the residential apartment building);
- the amount required to be secured, as well as the amount actually secured, by the developer bond; and
- any other prescribed matters.
A person must not apply for an occupancy permit for a residential apartment building unless a developer bond has been executed beforehand.
A purchaser under an off-the-plan contract may rescind the off-the-plan contract if the developer of the residential apartment building:
- has not arranged for the execution of a developer bond; or
- has arranged for the execution of a developer bond that fails to secure the minimum amount required under section 137ZP of the Building Act 1993.
Nomination of building assessor
A developer must nominate a building assessor to prepare the preliminary and final reports in relation to the construction of the residential apartment building. The nomination must occur at least 14 days prior to the first meeting of the Owners Corporation for the residential apartment building, or, failing that, within 28 days after that first meeting.
If, for some reason, a building assessor is not appointed within 28 days after the first meeting of the owners corporation, then the BPC may intervene to appoint a person as a building assessor for the residential apartment building.
Off-the-plan contracts of sale of land
The vendor in an off-the-plan contract must not allow or require the purchaser to take possession of the lot unless the occupancy permit has been issued. An off-the-plan contract may be rescinded at any time before the registration of the plan of subdivision on the ground that an occupancy permit has not been issued.
More generally, a person must not enter into a contract for the sale of land for a home that is being, or to be, constructed if the contract contemplates that the construction of the home will be completed before the settlement of the contract, unless the home is being constructed under an insurable domestic building contract.
Key takeaways
If you are a builder, developer, contractor or person who operates in the domestic building sphere – big changes are coming that will significantly impact the way you carry out your day to day business.
The upshot of the BPC and the Buyers Protection Act is that you will likely need to drastically adjust your business model, ensure you are compliant with these new obligations and are aware of what is required of you. Our understanding is that the BPC intends to take these changes very seriously and will be seeking to enforce their new powers quickly.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
