Building laws, warranty, and insurance

Building laws, warranty, and insurance.

 

Building laws in Victoria, Australia requires builders and tradespeople to follow certain rules when working on residential buildings. These rules include doing the work properly, following the plans and specifications, using good materials, following legal requirements, and completing the work properly.

 

These rules apply to all building work, no matter how much it costs or if there is a written contract. Builders and tradespeople are also required by law to have builders warranty insurance if the cost of the work is over a certain amount (currently $16,000).

 

This insurance only covers limited situations, such as if the builder can't finish the work or fix defects because they died, became insolvent, or disappeared. The insurance may also cover cases where the builder doesn't follow an order from a court or tribunal (if your policy was issued on or after 1st July 2015).

 

The insurance covers costs up to $300,000 to fix structural defects for six years, and non-structural defects for two years. However, if work wasn't completed, the insurance may only cover 20% of the contract price. In other cases, the builder or tradesperson is responsible for fixing or completing the work according to the contract.

 

If the property is sold within 10 years of completion of the work, the warranties automatically transfer to the new owner. The insurance certificate should be provided to you for private lot property, and the body corporate for common property building works by the initial owner (developer) of the property.

 

It's important to note that the insurance only covers limited situations, so it's still important to hire a reputable builder or tradesperson and have a written contract that outlines the work to be done and the payment terms. If you have any questions or concerns about insurance, building and/or plumbing work, you can contact the Victorian Building Authority for more information at (www.vba.vic.gov.au).

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Last updated 1/5/2023.

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For more information, contact:

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Luke Woollard

Managing Director
PILOT®
(03) 5976 1273 
mail@pilotrealestate.com.au

 

 

About PILOT®

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Pilot’s business purpose is to ‘make a positive difference to the lives of people’. Therefore, this purpose is exactly what you can expect from us. When we say we will do, we will do. We do Body Corporate management through our unique ‘Discover Simplexity’ approach, which is delivered through our three specialist offerings including: strategic, administration and network solutions. Our offering is extended to ambitious developers, investors and live-in owners and delivers best to their goals with longer term partnerships.

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All care is taken in the preparation of the information and published materials. PILOT Body Corporate does not make any representations or give any warranties about its accuracy, reliability, completeness, or suitability for any particular purpose. To the extent permissible by law, PILOT Body Corporate will not be liable for any expenses, losses, damages (including indirect or consequential damages) or costs which might be incurred as a result of the information being inaccurate or incomplete in any way and for any reason. If you have any concerns regarding this content, please contact PILOT Body Corporate at mail@pilotrealestate.com.au.