Rectification Orders Part 1: Game changer or much the same?
By Peter Micevski, solicitor, Lovegrove, Smith & Cotton
In July 2014, new amendments to the main building legislation in Victoria, the Building Act 1993, will be rolling out and among the notable amendments will be the introduction of a new phenomena to Victoria known as “rectification orders”.
With the new amendments to the Act, the Victorian Building Authority (“VBA”) will assume the role of the Building Commission and will have the power to appoint building inspectors to visit domestic building sites to examine disputed or defective building works.
If the parties, being the owner and the builder, cannot resolve a dispute regarding defective building works, the VBA upon the recommendation of the building inspector will have the power to issue a binding rectification order on the builder. Interestingly, the VBA may still issue a rectification order even if the parties have resolved a dispute, if in the inspector’s discretion the situation warrants this.
A rectification order may include not only terms as to the rectification and completion of works but also to compel the owner to pay money to the builder at a certain time (perhaps on completion of the work) OR perhaps to pay monies into a trust account pending completion.
Importantly for builders, any rectification order made by the VBA will be able to be appealed to the VCAT, within a set time limit. Presumably this then means there will be a number of builders taking up this opportunity, depending on the volume of rectification orders actually made. On the other hand an owner will also be able to appeal a decision not to issue a rectification order, or as to the terms of an order that is made.
By implementing this concept of rectification orders, it is apparent that the legislature has focused heavily on one aim, the protection of the consumer.
Currently section 37 of the Act enables a relevant building surveyor to direct a person in charge of building work to carry out work so that the building work complies with the building permit and the law. But they can only do so by issuing a building notice or ultimately a building order for the work to be brought into compliance on an owner. Thus the status quo with the Act is that the owner is held responsible for something that the builder should have rectified.
For now, consider it likely there will be many rectification orders made once a sufficient number of inspectors are engaged by the VBA, and the prospects of appeal are likely to be high.
In the next part of this 3 part-article, we will discuss the ramifications of non-compliance with a rectification order. The third part of this article will then discuss whether or not rectification orders will change the game in the domestic building space.
By Peter Micevski, solicitor, Lovegrove Smith & Cotton
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© Lovegrove Smith & Cotton 2014