Bringing home building safety reform in Victoria, Australia: are we there yet?

Victoria’s patchy history of building safety regulation

The ‘decades of failure’ in building safety regulation identified by the Grenfell Tower Inquiry’s 2024 Final Report – recently brought to our screens via a confronting Netflix documentary – have strong resonance in the Australian state of Victoria. We had our own combustible cladding apartment fire in November 2014, nearly three years before Grenfell, when a smouldering cigarette ignited the cladding at the Lacrosse apartment building. Fortunately, no serious injuries were sustained, but the fire exposed the inadequacies of a building regulatory regime which had last been significantly reformed in the early 1990s. 

The 1990s reforms revolved around consumer protection measures in the Domestic Building Contracts Act 1995

Image by Matthew Bell.

 (DBCA) and the devolution of domestic building disputes to a specialist tribunal, later incorporated into the Victorian Civil and Administrative Tribunal (VCAT). These reforms reflected the mantra of the time to reduce perceived constraints on private sector innovation; as the Attorney-General described the goal in her Second Reading Speech for the DBCA, ‘[b]ureaucratisation is  minimised  and processes have  been  made as  speedy  and cost  efficient as possible.’

A patchwork of reforms followed in the 2000s and early 2010s. These included watering down previously robust domestic building insurance so that it responded only where the builder has ‘died, disappeared or become insolvent’. At the same time, a proliferation of regulatory agencies – primarily, the Victorian Building Authority (VBA, replacing the Victorian Building Commission in 2013 after reports exposed governance shortcomings), Victorian Managed Insurance Agency, and Consumer Affairs – tangled the pathways for consumers seeking protection or redress.

By the 2020s, Victoria was well advanced with its combustible cladding rectification program run by Cladding Safety Victoria (CSV). That program has by no means been uncontroversial, especially for apartment owners and residents who have to navigate it, developers who face a levy to pay for it, and building practitioners pursued by the government for rectification costs it has paid out. But, by mid-2025, CSV reported that around 80% of the buildings identified as being sufficiently risky to require rectification had had that rectification completed.

Lack of confidence leads to a fresh start

Despite the success addressing the regulatory failure of combustible cladding, it was becoming ever clearer that Victoria’s 30 year old building regulatory system was no longer fit for purpose. This was most starkly illustrated by research commissioned by the VBA about the endemic levels of defects faced by home owners and residents. The research – published in October 2024 as ‘VBA: The Case for Transformation’ – was led by Bronwyn Weir. She was co-author of the 2018 Building Confidence report which has chartered a national response to building reform in Australia since Grenfell. 

The Case for Transformation report told heartbreaking stories of people whose expectations of a well-built home have ended in a morass of broken promises, drawn-out insurance and legal claims, and a loss of faith that the government can protect them from unfair and unsafe practices. Upon its release, the government and the head of the VBA explicitly acknowledged the need to put improving consumer confidence at the heart of the system.

The stories in the report were cited in Victoria’s Parliament when it  considered the Bill which has now become the Building Legislation Amendment (Buyer Protections) Act 2025 (BP Act). The BP Act is coming into force during 2025-26 but its most significant structural reform, the establishment of the Building and Plumbing Commission (BPC), has already happened. On 1 July 2025, the BPC launched with significant fanfare and ambition, noting on its website that it is to be a ‘one-stop shop watchdog, responsible for overseeing the domestic building industry’.

The BP Act’s other key reforms are to:

• For apartment buildings four storeys and above – increase the BPC’s powers to issue rectification orders, supported by a bond provided by the developer for 2% of the contract value and held for two years after occupation. These reforms are based on measures introduced in 2020 in our neighbouring state of New South Wales in response to a crisis of structural failures at the Opal apartment building and elsewhere. The developer bond is seen by the government as a pathway to decennial insurance  (already under active consideration in NSW).
• For residential buildings three storeys and under – replace the inadequate domestic building insurance with a ‘statutory insurance scheme’, run by the BPC as a monopoly provider. Most significantly, this will introduce a ‘first resort’ trigger for recovery where the builder fails to comply with a rectification order. 

More reforms to come

The passage of the BP Act – though significant – merely provides the legislative framework for its reforms. The ‘rubber will hit the road’ when the detail is published via regulations. These are likely to deal with matters which make a huge difference in practice, such as the threshold contract value at which the new insurance scheme kicks in.

Image by Matthew Bell.

Moreover, the BP Act is only one piece in a hugely-complex regulatory jigsaw puzzle. That puzzle involves not only the existing and proposed legislation but also their interaction with a vast body of private law measures – primarily, in contract, negligence and property law. As illuminated in a book Sue Bright and I have recently produced with colleagues around the world, that interface is poorly understood, risking inappropriately disrupting deeply-entrenched and vitally-important industry practices and interests. 

Another important piece of the puzzle is the need for practitioners and residents to be fully informed about how we can all contribute to the building and maintenance of safe places to live. As residents, we need to demand proper quality requirements in residential building, and be willing to pay for them – directly, or indirectly through rent or taxes – in our building and maintenance contracts. 

It is encouraging, therefore, that the Victorian government has put quality and resident safety at the heart of its reforms. As noted in its March 2025 ‘Building Statement’, the ‘vision’ is explicitly ‘a safer, more trusted building system’, and achieving this vision requires a suitable balance of factors including skilled practitioners, transparency, informed consumers, and effective regulators willing to actually use their powers. This last point is currently in the spotlight in Australia with the revelation that the extensive new rectification order powers given to the NSW Building Commission have not yet resulted in any fines to defaulting developers.  

In the second half of 2025, the Victorian government is putting in place or investigating other reforms, including:

• the Domestic Building Contracts Amendment Bill, introduced into Parliament in June, seeks to make various changes to streamline and improve the workability of the DBCA. These include the process for ordering and pricing variations to the work being done under the contract, and the builder’s ability to recover additional costs where prices rise. The Bill also proposes significantly extended inspection, enforcement and remedial powers, and reforms to better integrate the Domestic Building Dispute Resolution Victoria scheme (now run by the BPC) into the formal dispute resolution system run by VCAT and the courts;
• reforms to ‘security of payment’ legislation – the local version of the UK Housing Grants, Construction and Regeneration Act scheme designed to promote cashflow and therefore relieve the insolvency pressure manifest in the high-profile collapses of Porter Davis and other residential builders. Other measures being considered include removing the current (and complex) exception which exempts contracts between homeowners and builders from the security of payment scheme;
• a review, announced in mid-June, of owners’ corporation laws. As I noted in the wake of another Melbourne cladding fire in 2019, residents have a vital role to play in building safety, and governance arrangements (in Australia, variously referred to as ‘strata’ or ‘owners’ corporations’) need to make sure that residents are properly informed and feel safe in their apartments.

The government has also not yet abandoned its desire, underpinning the Building System Review program, to rewrite all of Victoria’s building legislation into a consolidated Act. This ambition is getting closer to being realised in NSW, and could certainly make the measures more accessible (for example, one of the key provisions to be introduced by the BP Act – the appointment of building assessors for final inspections – will be buried deep within the Building Act in a new section 137ZZF!)

Are we there yet?

Victoria’s reform agenda has been a long time coming, and we are by no means ‘there yet’ when it comes to ensuring that our homes are safely built and maintained. Perhaps we never will be ‘there’ when it comes to this challenge: it has been with us ever since people have engaged other people to build their homes. 

Residential building reform is, however, at the top of the Victorian government’s agenda in 2025. This offers both a case study for international and interstate observers, and an opportunity for the Victorian community and industry to contribute to making what the laws ultimately say and do as effective as possible. As Dr Seuss’s Lorax reminds those of us looking for encouragement to participate in these consultations: ‘[u]nless someone like you cares a whole awful lot, Nothing is going to get better. It’s not.’

Image by Matthew Bell.