Notice of decision

Subordinate Legislation Act 1994

NOTICE OF DECISION

Building (Statutory Insurance Scheme) Regulations 2026

I, Nick Staikos MP, Minister for Housing and Building and Minister responsible for administering the Building Act 1993 (the Building Act), give notice under section 12 of the Subordinate Legislation Act 1994 of my decision to recommend that the Building (Statutory Insurance Scheme) Regulations 2026 (the proposed Regulations) be made.

A consultation draft of the proposed Regulations and a regulatory impact statement were made available for public comment and submissions on the Engage Victoria website from 18 December 2025 to 1 February 2026. The Department of Transport and Planning received 27 written submissions and 56 survey responses during the consultation period.

The proposed Regulations support operation of the statutory insurance scheme (the scheme), established under Part 9A of the Building Act, to be known as the First Resort Home Warranty Scheme, managed by the Victorian Building Authority, trading as the Building and Plumbing Commission (the Authority).

The proposed Regulations prescribe matters necessary for the operation of the scheme, including:

• when domestic building work is taken to have started;
• circumstances in which the Authority must, or must not, provide assistance to a building owner under the scheme;
• circumstances in which a building owner is or is not entitled to assistance under the scheme;
• the types of domestic building work covered by the scheme;
• the types of assistance available to a building owner under the scheme;
• terms of cover to which assistance under the statutory insurance scheme is subject;
• exclusions and limitations that apply in relation to assistance under the scheme;
• processes for making and managing claims under the scheme;
• deductibles payable under the scheme;
• when cover under the scheme ends; and
• other administrative and operational matters relating to the scheme.

After consideration of the submissions and the issues raised during consultation, I have decided to proceed with the making of the proposed Regulations, with the following amendments:

• amended the definition of accommodation, removal and storage costs to be defined by reference to the costs incurred by the building owner because the domestic building work being carried out on that home is incomplete due to the delays or otherwise defective or non-compliant (Regulation 4).
• Amended the definition of structural defect to include any other defect that adversely affects, or is likely to adversely affect, the life, safety or health of persons who occupy or use the building or members of the public (Regulation 4).
• Amended the definition of waterproofing or weatherproofing defects to capture work that adversely affects, or is likely to adversely affect, members of the public (Regulation 4).
• the clarification of the meaning of ‘insurable value’ to reflect that the method to calculate the insurable value of domestic building work is the reasonable cost to the Authority of the rectification or completion of the domestic building work by a person who is registered or who holds a licence required by the Building Act to carry out domestic building work, and that the value includes “any other work required to be carried out for the rectification or completion of the domestic building work” (Regulation 5).
• the clarification that Regulation 11 only applies to domestic building work prohibited under the Heritage Act 2017 or the Planning and Environment Act 1987 (Regulation 11).
• the clarification that the following assistance is available for claims relating to defective or non-compliant domestic building work:
  • for claims valued less than $400,000, the rectification of the defect or non-compliant domestic building work on behalf of the Authority, less the building owner’s liability amount (if any); and
  • for claims valued at, or greater, than $400,000, the rectification of the defect or non-compliant domestic building work on behalf of the Authority or the payment of compensation, less the building owner’s liability amount (if any) (Regulation 12).
• building owners will not be entitled to assistance under the scheme if they rectify, complete or demolish, or attempt to rectify, complete or demolish the domestic building work without written approval from the Authority (Regulation 13). The Authority operates a 24-hour hotline to respond to emergency situations.
• the introduction of cover for domestic building work carried out under a cost-plus contract for defective or non-compliant domestic building work, only if the domestic building work is incomplete and the date of practical completion for the work has not passed (Regulation 15).
• the removal of the exclusion of defective or non-compliant domestic building work from cover if the designs, plans or specifications did not comply with the Building Act or Building Code of Australia and were not prepared by an architect, building engineer, registered designer or the relevant builder. This addresses feedback that distinguishing between designed by registered practitioners and non-registered practitioners could create additional complexity when multiple parties are responsible for defective or non-compliant domestic building work (Regulation 15).
• The inclusion of examples of a minor cosmetic difference, including minor paint imperfections including small scratches or chips or slight variations in colour or finish, or the use of different fixtures or fittings that do not reduce the quality, function or value of the domestic building work (Regulation 20).
• The clarification that the total value of assistance available for all losses arising from or in connection with the relevant domestic building work includes any corresponding lot entitlement if the home is on a lot affect by an owners corporation (Regulation 21).
• the removal of the $100,000 limitation on assistance for domestic building work related to a swimming pool, addressing perceived confusion about the cover for standalone pool contracts, pools integrated into broader domestic building work, and the treatment of consequential damages from such work (Regulation 21).
• the limit of assistance for accommodation, removal and storage costs has been uplifted from $10,000 to $12,000 to better reflect costs over the lifetime of the proposed Regulations (Regulation 23).
• in relation to the claims process:
  • expanding the required information that must be included in a complaint notice, which a building owner must serve on the relevant person (subject to exceptions), to include:
    • instead of the address of the building site, the address of the domestic building work to which the claim relates to;
    • a statement appropriately identifying the relevant person to be served the notice;
    • a description of any rectification or completion of work undertaken, or attempted to be undertaken, by the building owner (Regulation 33).
  • Amending the grounds where a builder owner is not required to serve a complaint notice on the relevant person. Previously this included “the claim relates presents a risk to the health or safety of the occupants of the building or members of the public” amended to “the claim relates presents an imminent risk to the health or safety of the occupants of the building or members of the public or a danger to property” (Regulation 32).
  • The 28 day period that a relevant person has to respond to a complaint notice does not include the period between 22 December in any year and ending on 10 January in the next year, to account for the industry shutdown period (Regulation 35).
  • The clarification that a relevant person can agree in full or in part that the domestic building work is incomplete, defective or non-compliant; and the relevant person carried out that domestic building work (Regulation 35).
  • the requirement that, if the relevant person does not agree (in full or part) that the domestic building work the subject of a claim is incomplete, defective or non-compliant, the response must include the reasons why the relevant person does not agree with the claim. If the relevant person agrees in full or in part that the domestic building work is incomplete, defective or non-compliant, and they have carried out that domestic building work, the relevant person must state what actions they will take to rectify or complete the work, and the period within such work will occur (Regulation 35).
  • Clarifying that the Authority must not decide a claim until the period to respond to the complaint notice has elapsed unless the Authority reasonably believes that the domestic building work is incomplete, defective or non-compliant poses an imminent risk to the health or safety of the occupants of any building to which the claim relates or to members of the public (Regulation 36).
  • Clarifying that, if the relevant person fails to respond to a complaint notice or an insurable domestic building contract event occurs after a complaint notice is served, the Authority may decide the claim (Regulation 37 and 38).
• the inclusion of a deductible payable by building owners when making a claim under the scheme, reflective of administrative and operational costs to the Authority, which is higher for claims made in the latter part of the warranty period. The deductible amounts are:
  • for claims made at least 5 years after the completion date—$1000;
  • claims made at least 3 years but less than 5 years after the completion date—$750;
  • claims made at least 3 months but no more than 12 months after the completion date—$500 (Regulation 47).
• if a rectification order has been issued in relation to domestic building work subject of a claim, the period prescribed under section 137ZC does not include the number of days a rectification order must be complied with under section 75E(3) (Regulation 48).
• renumbered the provisions.
• other minor or technical amendments.

After the proposed Regulations are made, they will become available for download from www.legislation.vic.gov.au.

A statement of reasons summarising the comments raised in consultation through submissions and surveys, and the rationale for the final form of the proposed Regulations will be published on the Engage Victoria website.

Dated: 07/05/2026

The Hon Nick Staikos MP

Minister for Housing and Building