The Victorian Government released an issues paper in late 2023 as part of its consultation to review the DBC Act to ensure it is fit for purpose and to strengthen protections for consumers while supporting the needs of the building industry.
The Act regulates matters including:
- contract thresholds,
- minimum Major Domestic Building Contract (MDBC)
- contract terms,
- deposit amounts,
- progress payments,
- warranties,
- ending of contracts,
- disputes and Domestic Building Dispute Resolution Victoria
The joint Institute and ACA submission included several recommendations for changes to the Act and especially recommendations for a revised Model Domestic Building Contract.
Many of these recommendations have been derived from experience gained by the architect profession’s use of the ABIC SW-H and MW-H contracts.
Positions promoted in the submission include the following:
- “Progress payments by percentage complete” (monthly progress payments) performed under an independently administered contract such as the ABIC SW-H and MW-H contracts should be positioned more positively as a choice that enhances protections for consumers against the Act’s default method of progress payment by stage completion.
- Contracts, with an independent contract administrator /superintendent, such as an architect, should be promoted more generally as a means to promote quality and prevent defects.
- Administered contracts using monthly progress payments should return the deposit to the building owner by the first one or two progress payments.
- Consumers would enjoy greater protections, and avoid disputes requiring conciliation by DBDRV or VCAT, if all MDBCs were required to quarantine a retention amount and have a defects liability period.
- The Act’s statutory implied warranties should include an additional warranty that defects or unsatisfactory performance will be remediated by the builder.
- The use of cost escalations clauses and cost-plus contracts should continue to be tightly restrained or avoided.
- A review should be undertaken of the performance of Domestic Building Disputes Resolution Victoria and whether its broad operation is fit for purpose.
Approximately twenty members from the Institute and ACA including representatives of the Institute’s Practice of Architecture Committee and Senior Counsellors worked with the Institutes’ National Policy and Advocacy team through two roundtables and a peer review process to prepare the submission. We would like to thank and acknowledge these members’ contribution to this important submission.
