Rectification Orders Part 2: A game-changer or more of the same?
By Peter Micevski, Lovegrove & Cotton – Construction and Planning Lawyers
Following on from Rectification Orders: A game-changer or much the same? Part 1, July 2014 amendments to the Building Act 1993 gave the Victorian Building Authority (“VBA”) the power to issue a rectification order to one or more than one person who is a party to a domestic building work dispute.
The rectification order issued by the VBA may require the person to whom it is issued, ordinarily the builder, to take action to:
- any defective domestic building work; or
- any damage caused in the carrying out of the domestic building work or by the defective domestic building work; or
- complete the domestic building work under the domestic building contract; and/or
- refrain from doing anything that would prevent or restrict:
- another party to the domestic building work dispute from satisfying a term or condition of the domestic building contract; or
- another person carrying out domestic building work to meet the requirements of a warranty set out in section 8 of the Domestic Building Contracts Act 1995.
If the rectification order is not appealed by the builder within the specified period required under the Act, the rectification order will take effect immediately and the builder will have a specified period to comply with the rectification order. The period specified in the rectification order will be a period that the VBA considers a reasonable time for the rectification or completion work to be carried out.
When the builder has rectified or completed domestic building work in accordance with the rectification order, the builder must give written notice to the VBA and the other parties to the dispute of the carrying out of that work, within 2 business days after the work is carried out. The VBA may then appoint an inspector to examine the building work and prepare a report to confirm whether or not the builder has complied with the rectification order.
If a builder fails to rectify or complete the work required by the order, the VBA will appoint an inspector to prepare a written report stating that the rectification order has not been complied with. Upon receiving the report from the inspector, the VBA may then amend the rectification order to extend the period for compliance or issue a notice advising a breach of the rectification order.
As advised in the previous article on this subject, it will be possible for a builder (or indeed an owner) to appeal the making of rectification orders to VCAT.
Once a breach of rectification order notice has been issued by the VBA to the Builder and the other party in the domestic building dispute, the building owner may then end the domestic building contract for the work and make an application to VCAT for an order against the builder.
VCAT will then consider the breach of rectification order and may make any order it considers fair in the circumstances. Such an order may include an order for damages, or to refund money paid under the domestic building contract. Importantly though, the builder will be entitled to receive a reasonable price for work carried out under the domestic building contract.