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 or BPA), which came into operation on 1 July 2025.
Key amendments have been made to both 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 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.
Key concepts introduced by the Act
Insurable domestic building contract
The term 'major domestic building contract' is now replaced with 'insurable domestic building contract'. 'Insurable domestic building contract' is defined as a domestic building contract with a contract price of a minimum of $20,000 for the construction of one home, or 2 or more homes in a building with a rise of 3 storeys or less.
Developer bond scheme
A new developer bond scheme (DBS) is to be introduced for residential apartment buildings with a rise of more than 3 storeys. The DBS is a security that the developer is required to issue to the BPC in order to secure an amount to subsidise any bond claim. It relates to claims under section 137ZZN(1) of the Building Act 1993. The security can be a bank guarantee, a bond issued by an approved insurer, or a prescribed form of security.
Statutory insurance scheme
A new statutory insurance scheme (SIS) is to be introduced for the construction of homes or buildings with 2 or more homes with a rise of 3 storeys or less.
The statutory insurance scheme applies to:
- domestic building work carried out by a builder under an insurable domestic building contract;
- speculative domestic building work carried out
by a builder which is –
- not under a domestic building contract; and
- on land owned by the builder; and
- for the construction of one home, or 2 or more homes in a building with a rise of 3 storeys or less, for sale; or
The SIS does not apply to:
- domestic building work for the construction of a residential apartment building of more than 3-storeys.
- domestic building work with a contract price of less than $20,000.
- domestic work carried out outside of Victoria.
So, what does the new Buyers Protection Act mean for homeowners?
If you are a builder, developer, contractor or tradesperson, please see our article on how the new Act will affect you here.
Assistance available under the SIS
A homeowner is entitled to 'assistance' under the SIS if they have suffered loss arising from or in connection with domestic building work that is incomplete, defective or non-compliant.
A homeowner wishing to claim 'assistance' under the SIS can do so by giving notice of the claim to the BPC, with a view to accessing remedies that would not otherwise be immediately available by way of proceedings litigated in VCAT or a Court. (Section 137ZA(1) inserted into the Building Act 1993)
This 'assistance' that may be accessed as a remedy provides a further option to consumers when considering dispute resolution avenues alongside time constraints and costs.
The 'assistance' that is available under the SIS includes:
- the rectification of defective or non-compliant domestic building work by or on behalf of the BPC;
- the completion of incomplete domestic building work by or on behalf of the BPC; and/or
- the payment of compensation.
However, it is important to note that assistance is not available to homeowners in the following categories:
- they are a party to a domestic building contract for the construction of 3 or more homes on one or more building sites; or
- they are a vendor in a residential off-the-plan contract of sale of land in relation to the domestic building work carried out for the purpose of that contract.
Review of a decision by VCAT
A homeowner or builder affected by a decision of the BPC may apply to VCAT for a review of its decision in relation to the following:
- the provision (or non-provision) of 'assistance' under the SIS;
- the SIS, particularly in circumstances where the BPC fails or refuses to decide a homeowner's insurance claim within 28 days after the prescribed period (which is not yet determined); and/or
- the issuance (or non-issuance) of a rectification order.
The time limit for appealing the BPC decision is 28 days from the date on which the decision was made.
The Key Takeaways for Consumers Are:
- A new statutory insurance scheme (SIS) and developer bond scheme (DBS) are now in force, having been implemented from 1 July 2026 or earlier, affording additional protection to homeowners and consumers.
- The new SIS will incentivise builders to rectify building defects as they are spotted by the homeowners, thereby mitigating the costs that could be incurred by both parties if a building dispute were to proceed to VCAT or a court.
- Builders must ensure they continue to hold the correct insurance cover corresponding to their registrations as building practitioners.
It will no doubt take some time for builders and landowners to understand the operation of the new Act. If you have queries regarding building defects or are a builder and what your new obligations are contact our team for clear advice on building and construction law.
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.
