The Building Legislation Amendment (Buyer Protections) Act 2025 came into effect on 1 July, ushering in one of the most significant reforms to Victoria’s building landscape in decades. At the centre of these changes is the establishment of the new Building & Plumbing Commission (BPC), a single authority now responsible for licensing, insurance, dispute resolution, and compliance oversight.
For builders, developers and trades, this is more than a reshuffle of regulatory bodies. It represents a cultural shift towards greater accountability, streamlined regulation, and increased consumer protection.
Why the BPC was Created
The BPC consolidates three existing authorities:
- Victorian Building Authority (VBA)
- Domestic Building Dispute Resolution Victoria (DBDRV)
- Domestic Building Insurance (DBI) function of the Victorian Managed Insurance Authority (VMIA).
Previously, builders often found themselves dealing with three separate arms of government when disputes, licensing issues, or insurance requirements arose. Now, the BPC will serve as a single point of authority, but with expanded powers.
Industry insiders expect this to reduce red tape in some areas while intensifying oversight in others.
Key Changes Builders Must Understand
1. From “Major” to “Insurable” Domestic Building Contracts
The old term “major domestic building contract” has been replaced with “insurable domestic building contract.”
This now applies to:
- Contracts over $20,000 for the construction of one home, or
- 2+ homes in a building of three storeys or less.
For builders, this definition matters because it aligns directly with the new insurance framework.
2. Statutory Insurance Scheme (SIS)
Perhaps the biggest change is the introduction of the Statutory Insurance Scheme (SIS).
The SIS applies to:
- Work under an insurable domestic building contract.
- Speculative builds undertaken by a builder on their own land for sale (for one or more homes up to three storeys).
It does not apply to:
- Apartment buildings above three storeys.
- Contracts under $20,000.
- Projects outside Victoria.
What this means in practice:
Builders will now need to ensure compliance with the SIS in addition to existing domestic building insurance obligations. Consumers can make claims for incomplete or defective work through the scheme, and the BPC can step in to order rectification, completion or compensation.
3. Developer Bond Scheme (DBS)
Developers of apartment projects above three storeys will now be required to post a bond with the BPC.
This security in the form of a bank guarantee, insurer bond, or other approved security will be used to cover the cost of defect rectification claims.
While this doesn’t directly affect small to mid-tier residential builders, it does impact developers and Tier 1 builders operating in the multi-residential space.
4. Expanded Powers to Issue Rectification Orders
The BPC will have the authority to order rectification of defective or non-compliant work. If builders fail to comply, the Commission can step in to complete the work and seek cost recovery.
This elevates the risk for builders who fail to address defects quickly but also gives clarity on enforcement and consumer recourse.
5. VCAT Review Rights
Builders and homeowners can apply to the Victorian Civil and Administrative Tribunal (VCAT) to review certain BPC decisions, including:
- Provision (or refusal) of assistance under the SIS.
- Decisions on insurance claims not made within the required timeframe.
- Rectification orders.
The review period is 28 days, meaning builders will need to act quickly if they wish to challenge a decision.
Why This Matters for Builders
Insurance and Registration Scrutiny Will Increase
Builders must ensure they are properly insured under the SIS and maintain registration that aligns with the work they’re undertaking. Any gap in cover could expose them to enforcement or leave consumers eligible to claim directly against the SIS.
Faster Consumer Recourse Means Faster Builder Response
The SIS allows consumers to bypass lengthy disputes and seek remedies directly from the BPC. This will push builders to address defects earlier, potentially avoiding escalation but also increasing pressure on internal systems and cash flow.
Developers Face Higher Entry Costs
The developer bond scheme adds another layer of compliance and cost. For builders working with developers, this could change how projects are financed and how risks are shared.
Dispute Resolution May Be More Predictable
With the consolidation of VBA, DBDRV and VMIA functions, builders will no longer face multiple regulators with overlapping powers. While oversight is expanding, there is potential for more consistent processes and decision-making.
Industry Reaction
While consumer groups have welcomed the reforms, builders are cautious. One Melbourne-based builder told The Good Builder:
“Anything that helps restore trust in the industry is good. But the practical side is, we’ll be carrying more insurance, more paperwork, and more compliance costs. Margins are already tight, so this is going to hit hard.”
Others see potential benefits:
“If this means disputes get resolved faster and fairly, then it’s better for everyone. Builders don’t want to be dragged through VCAT for years either.”
What Builders Should Do Now
- Review Your Contracts
Update templates to reflect the shift from “major” to “insurable” domestic building contracts. - Audit Your Insurance
Ensure coverage aligns with the new SIS requirements. Gaps could expose you to liability. - Prepare for Rectification Orders
Strengthen internal QA processes to identify and address defects early. - Engage with Developers on Bonds
If working on apartments above three storeys, clarify who is responsible for posting the DBS security. - Stay Informed
Regulatory details are still bedding down. Keep across updates from the BPC and industry bodies.
The Good Builder Take
This legislation is pitched as “buyer protection,” but for builders, it’s a clear signal: the government wants higher accountability, lower defect rates, and faster dispute resolution.
For those running a lean, compliant operation, these changes may level the playing field by forcing out less professional operators. For others, the additional compliance will feel like yet another cost in an already strained market.
Either way, the BPC will be a powerful new force shaping the Victorian construction sector and builders can’t afford to ignore it.
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