New Building And Plumbing Commission Starting 1 July 2025
Incoming changes to Domestic Building Insurance
From 1 July 2025, the Victorian Government’s overhaul of the domestic building industry’s regulatory framework will commence with the establishment of the new ‘Building and Plumbing Commission’ (BPC). The new regulator consolidates the various functions of the Victorian Building Authority, Domestic Building Dispute Resolution Victoria, and VMIA's domestic building insurance functions into a singular, more powerful regulator.
The reforms come with the passing of the Building Legislation Amendment (Buyer Protections) Bill 2025, bringing fundamental change to the regulatory landscape with significant implications for owners, builders, and developers alike. The bill sets out the various new functions and powers of the BPC, with those functions and powers coming into effect the earlier of either a date to be proclaimed or 1 July 2026, and subject to additional regulations and ministerial orders.
Domestic Building Insurance / Rectification Orders
The BPC will be granted a range of new enforcement powers including the ability to issue ‘rectification orders’ compelling builders to rectify defective work. The new enforcement powers are intended to compliment a transition away from the current "last resort" domestic building insurance coverage.
Under the current insurance framework, a claim on a domestic building insurance policy can only be made in circumstances where a builder has died, disappeared or becomes insolvent. Under the new framework, domestic building insurance will now become accessible if a builder fails to comply with a rectification order issued by the BPC – transitioning from “last resort” to “first resort” protection.
Developer Bond
The BPC will also oversee and manage a new developer bond scheme, requiring developers of residential apartment buildings over 3 storeys to secure bonds as security for defect rectification, ensuring new owners have access to funds to cover rectification costs. Alongside the bond scheme, the BPC will be provided powers to conduct mandatory inspections of new apartment buildings prior to an occupancy permit being issued and halt sales until any defects have been rectified.
Understanding these new laws is crucial for managing risk and compliance in the construction process. Defect claims are already a major source of construction litigation, and these changes will fundamentally reshape how disputes are resolved.
If you're seeking advice about how these reforms affect you, need assistance with claims, or require assistance dealing with the BPC, contact Oldham Construction Lawyers via info@oclawyers.com.au for specialist, tailored advice.