Stronger protections in building contracts considered

Prompted by the collapse of Porter Davis Homes, which left hundreds of families financially exposed, the Domestic Building Contracts Amendment Bill 2025 will introduce a suite of reforms to ensure greater transparency, accountability, and fairness in the building industry.

The bill contains a range of measures, including tighter rules on progress payments, clearer contract variation processes, and the transfer of functions from the director of Consumer Affairs to the new Building and Plumbing Commission to consolidate oversight functions. 

In his second reading speech Nick Staikos, Minister for Consumer Affairs, said the rules around when and how builders get paid under major domestic building contracts (MDBC) have not been updated since 1995 and have fallen out of step with changes in industry practice.   

He said the bill would 'deliver a modern fit for purpose regulatory framework for domestic building contracts in Victoria to give consumers greater confidence and security when building or renovating their homes’.

Under the legislation builders will only be allowed to demand payments directly related to completed work and contracts will have to be written, legible, and include key details. 

Consumers will also be able to exit contracts if completion time blows out by more than 50 per cent or costs rise by more than 15 per cent and, while builders will be able to include cost escalation clauses in contracts over $1 million, those increases will be capped at 5 per cent.

“ 'This bill will deliver a modern fit for purpose regulatory framework for domestic building contracts in Victoria to give consumers greater confidence and security when building or renovating their homes.' ”

Nick Staikos, Minister for Consumer Affairs

Richard Riordan, Member for Polwarth said while this bill makes many pro-consumer changes, ‘they are not as sweeping as they could be’. 

‘Overall, these changes, whilst pro-consumer, will benefit Victorians by tightening up building industry business practices, although at the same time there will be an increase in uncertainty with the moving of many of the definitions and details into regulation,’ he said.

“ ‘The one thing that is 100 per cent guaranteed in all of this is that any extra price that goes on a house is paid by the person that signs the contract for their dream home.' ”

Martin Cameron, Member for Morwell

Member for Sunbury. Josh Bull said the legislative changes would allow for ‘a more structured, more certain and better way of contracting when it comes to housing’. 

‘We as a government and all members of parliament have an obligation to support communities to have a roof over their head and to be able to not go broke during the process,’ he said.

Martin Cameron, Member for Morwell, said it was important not to ‘make it so difficult with the red tape that these developers have got to jump through to get a house to jump up out of the ground’. 

‘The one thing that is 100 per cent guaranteed in all of this is that any extra price that goes on a house is paid by the person that signs the contract for their dream home, so we need to make sure that it is still affordable,’ he said. 

The bill has passed the Legislative Assembly and has moved to the Legislative Council for consideration. 

The debate, including contributions from other members, can be read in Hansard.