Porter Davis Collapse Helps Drive Building Reforms

The Victorian government has announced a raft of reforms for the construction sector in the wake of the Porter Davis liquidation, including expanding the powers of the Victorian Building Authority. 

The state government said it would amend the Domestic Building Contracts Act 1995 to strengthen domestic building insurance requirements. 

Part of the reform and changes will mean regulators will have more power to monitor builders around their legal obligations to take on domestic building insurance prior to taking deposits. 

There will also be new penalties introduced for failing to comply with legal requirements. 

The Victorian Building Authority will carry out audits on builders on deposit collection and taking out insurance. 

“The building sector is the backbone of our economy—we’re ensuring Victorians can have faith in the construction firms who build their homes, protecting their hard-earned savings,” Victorian planning minister Sonya Kilkenny said. 

Government support has been provided to customers who were adversely affected by Porter Davis Homes going into liquidation this year. 

The liquidation exposed that builders were not taking out the necessary insurance when accepting deposits. 

▲ About 1500 home builds in Victoria and 200 in Queensland have been abandoned in the collapse of Porter Davis.

Rising supply chain and labour issues have created a crisis in the construction sector as several big companies have gone under, creating issues for subcontractors and customers but also developers needing to finish projects. 

The Victorian government also announced that there would be an extended transition for some new National Construction Code requirements due to begin in October. 

Consultation with the construction sector has led to the extension. 

A review of the role of all regulators and the quality of the information provided to customers around building insurance will also occur. 

“These reforms are part of a comprehensive review to modernise Victoria’s building system, delivering better protection for Victorians building a home, while providing clarity to the building industry,” Victorian premier Daniel Andrews said. 

Anna Cronin was appointed as the VBA’s new chief executive after its former chief executive resigned. 

The Building System Review’s first recommendations included establishing a building monitor to represent the customer, expanding the range of building industry participants who must be registered and increasing the oversight of building surveyors. 

Other reforms will be staged in order to consult with the building industry, according to the Victorian government.