The Australian Institute of Architects has welcomed the introduction of the Building Legislation Amendment (Buyer Protections) Bill 2025.

David Wagner, Victorian Chapter President of the Institute, says the legislation marks a critical shift in how the state supports quality assurance and consumer trust in the building industry.

“This is a game-changing piece of legislation,” Wagner says. “It strengthens the role of the Victorian Building Authority and brings much-needed oversight to areas of residential construction that have been vulnerable to risk and inconsistency – particularly developer-led projects.”

A key feature of the Bill is the expanded powers of the Victorian Building Authority (VBA), which will be empowered to issue rectification orders for defective, incomplete or non-compliant works for up to ten years after project completion. It will become an offence to ignore such orders.

The Bill also consolidates regulatory oversight by bringing the function of administering the Domestic Building Contracts Act 1995 under the VBA, alongside co-locating the Victorian Managed Insurance Authority (VMIA) and the Domestic Building Dispute Resolution Authority (DBDRV). Wagner said the centralisation of regulatory and insurance functions is “sensible and welcomed.”

The reforms will require builders of residential projects up to three storeys to pay insurance premiums before construction begins – or within 10 working days of signing a contract. Critically, insurance coverage will still be extended to homeowners even if a builder fails to arrange a policy, closing a gap that has left many consumers exposed in past builder insolvencies.

For apartment buildings over three storeys – which have previously been excluded from construction warranty insurance – the legislation introduces a developer bond of approximately 2% of the contract value. Held by the VBA for two years post-completion, the bond will only be released once any defects are resolved. A future decennial (10-year) insurance requirement is also on the horizon.

“This is a significant advancement that will rebuild market confidence,” says Wagner. “The surplus of more than 8,000 unsold apartments in central Melbourne is evidence of the market’s current unease. These reforms directly address the root causes of that uncertainty.”

The Institute has strongly endorsed the Bill and commended the Victorian Government for its leadership.

“We need a regulatory framework that focuses on prevention,” Wagner said. “By embedding robust inspection, insurance and rectification processes, this legislation supports the delivery of well-constructed, defect-free homes.”

“With Victoria facing the challenge of delivering up to 80,000 new homes annually to support population growth, the passage of this Bill is vital.”

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Clémence Carayol

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