What builders need to do to be compliant

In Victoria, registered builders are required to meet a range of fundamental regulatory obligations. These must be followed for the effective oversight and delivery of compliant building work.

The BPC takes breaches of these obligations seriously and consistently delivers a regulatory response to breaches. This includes builder obligations to appropriately interact with the relevant building surveyor (RBS), enable inspection of work , and respond to non-compliance.

These fundamental obligations include those relating to:

• The holding of required insurance: where a building practitioner does not have the required insurance, the BPC must immediately suspend their registration.
• Notifying the RBS at mandatory notification stages throughout a project, and complying with directions by the RBS to stop work at these stages.
• Complying with any Direction to Fix (DTF) issued by the RBS, or by the BPC.
• Complying with a Dispute Resolution Order.

We take consistent and proportionate action against these matters.

Mandatory notifications and stopping of work

Engagement with the RBS at the mandatory notification stages is essential to providing oversight of building work compliance and providing consumer protections. The builder must:

• Notify the RBS without delay when each stage is completed
• Stop work, where directed by the RBS, or as required by the building permit

This is required by section 33 of the Building Act 1993 (the Bulding Act). Refer to MI 01 Mandatory Notification and Inspection of Building Work for more information.

The RBS will notify the BPC where a builder has not met their obligations around mandatory notification stages. Breaches:

• can result in a reprimand, financial penalty or other disciplinary action, which is recorded on the public register, even where the underlying work is compliant
• for an owner-builder, can lead to the owner-builder certificate being rescinded
• when associated with non-compliant building work, may be considered an ‘aggravating factor’ that can lead to a more serious disciplinary action or prosecution.

Complying with a Direction to Fix (DTF)

Under the Act, an RBS must issue a DTF to the builder where they determine that building work is non-compliant, in most cases. The builder must comply, and cannot pass the cost of compliance onto the owner.

For guidance on the DTF power, including cases where other tools may be used in place of a DTF, and how a builder can seek an extension of time, or appeal the DTF. Refer to NO 2 Direction to Fix Building Work.

The DTF is an essential measure to protect consumers from non-compliant work. The RBS is empowered to use this tool as part of their core role. For RBS-issued DTFs, refer to RBS statutory powers and referrals.

The BPC may also issue a DTF in some cases. For BPC-issued DTFs, refer to Direction to Fix.

The RBS will notify the BPC where a builder has not complied with a DTF. Breaches may:

• result in a reprimand, financial penalty or other disciplinary action, which is recorded on the public register
• lead to a suspension, or partial suspension of the builder’s registration
• be enforced by the BPC seeking an injunction from a court
• be prosecuted in court, with a maximum penalty of 500 penalty units for an individual, or 2500 penalty units for a body corporate.

When issuing a show cause notice to a builder in the disciplinary process, the BPC regularly proposes a partial suspension of a builder’s registration. The partial suspension prevents the builder from taking on new work, but permits them to complete the work needed to comply with the DTF or other compliance requirements. This is done to provide consumer protection and focus the builder on fixing the issue.

The BPC also regularly imposes a financial penalty for the breach of a DTF, with penalties accounting for the seriousness of the non-compliance, and their engagement with the RBS and the BPC.

Sometimes, the builder complies with the DTF by the time the show cause period ends. When this happens, the BPC will not apply the proposed suspension, but may still impose the financial penalty. This is to address the conduct issue and deter future breaches.

Breaches of Dispute Resolution Orders

After the parties to a domestic building work dispute have been through the BPC’s dispute resolution process, the BPC may issue a Dispute Resolution Order to the parties, requiring them to take certain actions. For example, the Dispute Resolution Order may require the builder to rectify defects.

If a builder does not comply with this order, the BPC must issue a ‘Breach of Dispute Resolution Order Notice’ (BODRON) to the builder and may commence a discipline process based on the BODRON alone.

In this case, the BPC must include a proposed suspension of the builder’s registration. This follows the ‘show cause’ process, starting with the show cause notice.  The show cause notice will usually propose suspending the builder’s registration for up to three years, preventing them from taking on new work until the BODRON is cancelled. This action promotes consumer protection and drives the builder to fix the problem.

In addition, the BPC will often issue a financial penalty to the builder. This is because breaching a Dispute Resolution Order is a serious matter, as they have had opportunity to engage in the dispute process at all points leading to their non-compliance.

The BPC has limited discretion within this process. Once a BODRON is issued and a discipline process is commenced unless the BODRON is cancelled, the BPC must suspend the builder’s registration.

Where the builder complies or reaches an agreement with the owner, the BPC can cancel the BODRON, and the suspension is lifted.

Importantly, the BPC may also include other grounds for discipline against the builder and propose further sanctions against the builder, including financial penalties.