Preliminary issues
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Domestic building work in Victoria is governed by:
the Building Act 1993 (Vic) (‘Building Act’);
the Australian Consumer Law and Fair Trading Act 2012 (Vic) (‘ACL&FTA’); and
the Domestic Building Contracts Act 1995 (Vic) (‘DBC Act’).
The DBC Act contains a number of consumer protection provisions that are outlined in this chapter. Consumer Affairs Victoria is responsible for administering the ACL&FTA and DBC Act. The Victorian Building Authority (VBA) administers the Building Act, oversees building legislation and regulates building practices in Victoria. For more information, see ‘Where to get help’ at the end of this chapter.
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Sections 5 and 6 of the DBC Act describe the domestic building work covered by this legislation. The DBC Act applies to the erection and construction of a home and the renovation, alteration, extension, improvement or repair of a home including associated work, such as but not limited to, landscaping, paving, driveways, fencing, garages, workshops, swimming pools or spas. It also applies to the demolition or removal of a home, or any work associated with the construction or erection of a building on land zoned residential and in respect of which a building permit is required under the Building Act.
‘Home’ is defined as any residential premises, but does not include a caravan, a rooming house, motel, residential club, nursing home, hospital or any residence that is not intended for permanent habitation.
The DBC Act does not apply to farm buildings, buildings intended to be used only for business purposes, or to buildings intended to be used only to accommodate animals.
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An early decision is whether you will engage a registered builder or whether you will carry out the building works yourself as an owner–builder.
This is an important decision as it influences the contractual and insurance arrangements for the work (see ‘Building contracts’ and ‘Insurance’, below).
Regardless of whether the work is carried out by a registered builder or by you as an owner–builder, you need to obtain any necessary planning and/or building permits.
Owner–builders:
must obtain a certificate of consent from the VBA before obtaining a building permit for work valued over $16 000;
must, before obtaining a certificate of consent, demonstrate that they possess the required knowledge by completing an online assessment – a 100 per cent pass is required;
may only obtain one building permit for a single dwelling or associated work in any five-year period;
must reside in or intend to reside in the finished dwelling;
cannot build for profit (i.e. for rent or sale);
must be the owner of the land on which the building work is to occur; and
complete construction induction training if the property is to become a workplace during construction and it is necessary to maintain occupational health and safety requirements.
An owner–builder either carries out the work themselves or hires trades people to do the work. Plumbers and electricians must be licensed or registered. Owner–builders should satisfy themselves of the licensing or registration of these trades people.
An owner–builder cannot perform demolition work, stumping, re-blocking, subfloor work, or relocate a home. This work must be carried out by a registered builder.
An owner–builder must enter into a major domestic building contract (see ‘Building contracts’, below) when engaging a registered domestic builder, contractor or tradesperson for work in excess of $10 000 unless they are engaged for work involving a single trade (e.g. electrical work or painting). If the work is going to cost more than $16 000, then the contractor or tradesperson must supply home warranty insurance.
Consumers should be wary of unregistered builders who are prepared to assist consumers with owner–builder projects. There are normally good reasons why builders cannot gain registration. Unregistered builders or builders with limited registration should be avoided. Always check a builder’s registration and home warranty insurance.
An owner–builder is not required to insure the works against defects unless they sell their home within six-and-a-half years of the date of the occupancy permit (Building Act s 137B). A registered builder must produce evidence of home warranty insurance before commencing any work. If in doubt, you should opt for a traditional arrangement and engage a registered builder under a written contract.
It is important when seeking quotes that consumers are clear and consistent in describing their building work. Obtain at least three quotes. Check examples of the builder’s work and request references.
The VBA can inspect owner–builder projects.
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The Building Act regulates the registration of building practitioners. To obtain registration, a building practitioner must hold an appropriate qualification, be of good character and present evidence to the VBA that they are covered by the requisite insurance. Builders, demolishers, draftspersons, engineers, building inspectors, quantity surveyors and building surveyors are all required to be registered.
Ensure that the person or company you are dealing with (i.e. the builder) is registered with the VBA.
For work over $16,000, the builder must obtain home warranty insurance.
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Under the Building Act, a ‘building permit’ must be obtained for nearly all building work, being work for and in connection with the construction, alteration, demolition or removal of a building. Unless the work involves a single trade, such as tiling or plumbing, nearly all domestic building work requires a building permit. Regulation 23 of the Building Regulations 2018 (Vic) (‘Building Regulations’) sets out what buildings and building work do not require a building permit. For example, garden sheds with a floor area of less than 10 square metres do not require a permit.
A building permit is required at the beginning of a project before any building work is carried out. An ‘occupancy permit’ or ‘certificate of final inspection’ is obtained at the end of a project when the work has been completed. New work cannot be occupied without an occupancy permit. Do not overlook this requirement in your eagerness to move into your new home.
Building permits, occupancy permits, and certificates of final inspection are issued by building surveyors. Certain councils continue to act as building surveyors, offering consumers a choice, but building work can be carried out without the involvement of local councils.
A building surveyor is responsible for checking the plans and designs to ensure they comply with minimum building standards. Building surveyors ensure that each building practitioner engaged in the building work is registered and covered by the required insurance and that the requirements of all relevant authorities and planning permits are addressed in the project.
Owners are required to appoint a building surveyor for the project. Builders cannot appoint building surveyors for your project. Once appointed to a project, a building surveyor can only be removed by application to the VBA.
During construction, a builder or owner–builder is responsible for supervising the construction works. A building surveyor will carry out mandatory inspections of the work to ensure that work is being carried out in accordance with the approved drawings and relevant regulations. A building surveyor is not a supervisor of the building works. On a typical residential construction, a building surveyor may attend site on only four or five occasions to carry out inspections. Building surveyors are required to act independently and consumers should consult them if they have any questions about the state of the works.
At the completion of the building works, a building surveyor will carry out a final inspection before issuing an occupancy permit or a certificate of final inspection. A certificate of final inspection is appropriate if the works only affect part of a home. If a building permit requires an occupancy permit, then no-one should occupy the home until an occupancy permit has been issued by the building surveyor.
These permits and certificates are issued when the building is suitable for occupation. They do not relate to the quality of the building work, and they expressly state that they are not evidence that the work complies with relevant building legislation and regulations.
As discussed in ‘Building contracts’, below, some building contracts tie completion and final payments to the issue of an occupancy permit. Do not place too much importance on the occupancy permit, as it is not a guarantee of quality; have the workmanship assessed by an independent building consultant.
Always keep the building surveyor in the communication loop.
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Some people engage an architect to assist them with their building project. Architects are not required to be registered under the Building Act as they are governed by the Architects Act 1991 (Vic). Architects are required to carry professional indemnity insurance.
Architects offer a range of services. A full architectural commission involves the architect in all stages of the project from designing, preparing drawings, obtaining planning permits (if necessary) and building permits, arranging contracts, selecting contractors, administering building contracts, and inspecting the work.
It is important to remember that while architects have greater involvement in the project than building surveyors, architects do not supervise building works. Builders supervise their own work.
An architect can be engaged for specific services (e.g. design only). An architect’s fees are normally calculated as a per centage of the value of the proposed works or as an hourly fee. Consumers not familiar with building works and the building industry may wish to consult an architect before commencing any work.
It is always useful to consult an architect about any quote you receive for building works. An architect will assist you in determining whether the quote is adequate and realistic and reflects your intentions for the work.
Consumers should provide their architect, builder and draftsperson with all the available information concerning their property. This includes information about title boundaries, easements, underground services, restrictive covenants and planning overlays. Keeping your professionals fully informed about your property will avoid additional costs.
If you are not retaining an architect for your project, you should consider engaging an experienced building consultant to carry out regular inspections of the work. Without some professional assistance you will not know whether the builder is providing the appropriate materials or level of workmanship.
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Check the status of your plumber. Licensed plumbers have a higher level of knowledge and training than registered plumbers. Only licensed plumbers can issue compliance certificates certifying the quality of the plumbing work. Only licensed plumbers have insurance covering defective plumbing work. Plumbing work that costs more than $750 requires a compliance certificate and insurance.
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Planning and building permits are different. Not all building works require a planning permit, but nearly all works require a building permit.
Planning permits
Planning permits are issued by the planning department of your local council. The relevant planning scheme that applies to your property will set out whether the proposed work requires a planning permit. For example, most dual occupancy projects require a planning permit.
The planning scheme is concerned with the type of development proposed, its size, its effect on the amenity of neighbouring properties, its suitability for the area and other considerations concerning the nature of the proposed works.
The planning permit process is not always straightforward. If neighbours object to the proposed works, it may be difficult to secure a permit for your project.
A planning permit may impose conditions on the work and may require modifications to the proposed building design. It is important to ask your local council whether a planning permit is required before commencing any building work.
Building permits
Building permits are concerned with the structural and technical integrity of the proposed building and whether the work complies with all relevant legislation and regulations. Building permits ensure that your project produces a building that is safe, durable, energy efficient and healthy. Building permits are issued by a building surveyor. For assistance in selecting a building surveyor for your project, contact the VBA (for contact details, see ‘Where to get help’ at the end of this chapter).
Preliminary issues
Chapter: 6.3: Building or renovating a house
Contributor: Mark J. Attard, Partner, Kennedys Law
Current as of: 1 September 2024
Law Handbook Page: 501
Next Section: Building contracts
