Building in Victoria: The Compliance Guide Every Residential Builder Needs

If you're a residential builder in Victoria, the compliance landscape shifted significantly in 2025. The Victorian Building Authority (VBA), the regulator that had overseen the industry for years, was abolished and replaced by the Building and Plumbing Commission (BPC) after sustained criticism over enforcement failures and corruption allegations.

The new regulator has stronger powers. The rules around defect rectification have changed. And builders who don't understand the current framework are carrying more risk than they realise.

This guide covers what Victorian residential builders need to know right now.

Registration and Licensing

Who Needs to Register?

In Victoria, anyone carrying out domestic building work valued at more than $10,000 (including labour and materials) must be a registered building practitioner. This applies to:

• Builders (limited and unlimited)
• Building surveyors
• Building inspectors
• Quantity surveyors
• Draftspersons
• Engineers (structural, civil, building services)

Registration Categories

The two main builder registration categories are:

Domestic Builder (Unlimited / DB-U): Can carry out any domestic building work with no contract value limit.

Domestic Builder (Limited / DB-L): Restricted to specific classes of work (e.g., carpentry, bricklaying, demolition) and typically capped by contract value.

Checking Registration

All registrations can be verified on the BPC's public register (formerly the VBA register). Before engaging any practitioner, verify their registration is current and covers the class of work you need.

Paperless includes licence verification for Victorian builders using the Building and Plumbing Commission register. See how compliance tracking works.

Domestic Building Insurance (DBI)

When Is It Required?

Domestic building insurance is required for all domestic building work in Victoria where the contract price (including GST) exceeds $16,000. This applies to:

• New homes
• Renovations and extensions
• Swimming pools
• Garages and carports (if attached to a dwelling)

What Does It Cover?

DBI protects the homeowner if:

• The builder dies, disappears, or becomes insolvent before completing the work
• The builder fails to comply with a rectification order within 90 days
• Major structural defects appear within 10 years of completion (previously 6 years, which was extended)
• Non-structural defects appear within 2 years of completion

Key Requirements

• Insurance must be obtained before entering into the building contract
• The certificate must be provided to the homeowner before work begins
• Coverage must match or exceed the contract value
• The builder (not the homeowner) arranges and pays for the insurance

Building without DBI when required is a criminal offence in Victoria.

Progress Payments Under the Domestic Building Contracts Act 1995

The Standard Payment Stages

The Domestic Building Contracts Act 1995 (DBC Act) sets out the maximum progress payment percentages for contracts over $10,000:

| Stage | Maximum % | |-------|-----------| | Deposit | 5% | | Base | 10% | | Frame | 15% | | Lock-up | 35% | | Fixing | 25% | | Completion | 10% |

Critical difference from NSW: Victoria's maximum deposit is 5% of the contract price, compared to NSW's 10%. This is one of the lowest deposit caps in Australia. Getting this wrong is a breach of the DBC Act.

Payment Claims

Under the DBC Act:

• A builder can only claim a progress payment when the work for that stage is complete
• The claim must be in writing and include a description of work completed
• The homeowner has 10 business days to pay from the date the claim is received
• If the homeowner disputes the claim, they must provide written reasons within 5 business days

Variations in Victoria

The DBC Act requires all variations to be:

• In writing
• Signed by both parties
• Include the price and time impact
• Agreed before the variation work is carried out

This mirrors NSW requirements but with some differences in dispute resolution pathways. Verbal agreements are not enforceable in Victoria.

The New Rectification Powers

The Building Legislation Amendment (Buyer Protections) Act 2025 gave the BPC significantly stronger powers than the old VBA:

Rectification Orders

The BPC can now order builders to fix defects even after occupancy permits have been issued. Under the old VBA regime, enforcement largely stopped once the occupancy certificate was granted. This was a major loophole that left homeowners with defective homes and no regulatory recourse.

Developer Bonds

Developers of apartment buildings above three storeys must now provide bonds to ensure funds are available for defect rectification. This doesn't directly affect most residential builders, but it signals the government's intent to hold the industry accountable.

Enhanced Enforcement

The BPC has stronger powers to:

• Suspend or cancel registrations
• Issue infringement notices
• Commence proceedings against non-compliant practitioners
• Publish enforcement actions as a deterrent

Dispute Resolution

Domestic Building Dispute Resolution Victoria (DBDRV)

If a dispute arises between a builder and homeowner, the first step is DBDRV (now integrated into the BPC). DBDRV provides:

• Free conciliation services
• Assessment by independent building inspectors
• Binding determinations for disputes under certain thresholds

VCAT

If DBDRV can't resolve the dispute, either party can apply to the Victorian Civil and Administrative Tribunal (VCAT) for a hearing. VCAT can order:

• Rectification of defective work
• Compensation for losses
• Completion of incomplete work
• Payment of outstanding amounts

The Best Defence Is Documentation

The builders who do well in disputes, whether at DBDRV, VCAT, or just in direct negotiation, are the ones with thorough documentation:

• Progress photos at every stage, uploaded in real time
• Variation approvals documented and signed before work proceeds
• Inspection records with dated evidence
• Client communication logs with full history
• Payment records tied to completed milestones

Paperless creates this paper trail automatically. Every photo, variation, payment, and message is logged and timestamped. If you ever need to demonstrate your process in a dispute, everything is in one place. Start a free 30-day trial.

Practical Compliance Checklist

Before you start any domestic building project in Victoria:

• [ ] Registration current and covers the class of work
• [ ] Domestic building insurance obtained (contracts over $16,000)
• [ ] Insurance certificate provided to homeowner
• [ ] Written contract in place (mandatory for work over $10,000)
• [ ] Deposit does not exceed 5% of contract price
• [ ] Progress payment stages comply with DBC Act maximums
• [ ] Variation process documented in contract
• [ ] WHS management plan for the site
• [ ] Relevant building permits obtained

The Bottom Line

Victoria's building compliance framework is stricter than it's ever been. The BPC has real enforcement powers. Homeowners are more informed. And public scrutiny of building quality is at an all-time high.

For builders who do good work, this is an opportunity. The compliance bar is higher, which means the builders who clear it stand out. Document your work, follow the rules, and make your process transparent, and you'll be ahead of most of the industry.

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