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How to prevent this
When choosing a builder or trade, check reviews to see if they have completed projects recently and if previous clients were satisfied with their work. See Finding a practitioner and getting quotes for more information about what to look for.
Once you’ve chosen someone to do the work, it’s worth checking that the details they’ve given such as their company name, ABN, ACN, and address are current, legitimate and consistent with information on public registers. Check:
- Australian Financial Security Authority (AFSA) if they are a sole trader or partnership
- Australian Securities and Investments Commission (ASIC) if they are a company
- Australian Business Register to look up their ABN or ACN
If your building project is worth $16,000 or more, make sure the builder has provided a current certificate of domestic building insurance (DBI) covering your address. DBI will cover you for unfinished work if your builder dies, disappears or becomes insolvent.
An independent professional such as an architect or building consultant can conduct stage inspections and report that work has been completed, or not, in line with the contract requirements.
Otherwise, inspect work at the end of each stage before making payments. Make sure that the work has passed any required inspections listed on the building permit and ensure the work has been completed as specified in the plans and contract.
You should not withhold progress payments because of defects (provided that the stage has been completed). Always get legal advice before withholding a progress payment.
What you can do
Always talk to your builder and give them an opportunity to fix the issue before lodging a formal complaint or dispute. See Resolve disputes to understand the process for resolving disputes.
You can insist that the builder comply with the terms of the contract. The builder is obliged to complete the work that is set out in the contract terms before they are entitled to receive the final payment. If the builder insists on the final payment before they finish the work, this is a breach of the contract.
There are some expectations that don’t need to be specified in the contract that should be considered part of a service, such as filling gaps when preparing surfaces for painting, or acid washing brickwork.
If the builder has breached the contract, you may be eligible for Domestic Building Dispute Resolution Victoria (DBDRV). DBDRV provides free conciliation services for owners and builders in domestic building disputes. If you are unable to resolve your dispute at DBDRV through conciliation, DBDRV has the power to issue legally binding dispute resolution orders and certificates. Check that you are eligible for this service at Is our service right for you?
If you are ineligible for DBDRV, or if your issue could not be resolved and you have received a certificate of conciliation from DBDRV, you can make an application to the Victorian Civil and Administrative Tribunal (VCAT). You can also contact Consumer Affairs Victoria’s (CAV) Building Information Line at 1300 55 75 59 for free advice. Consider getting independent legal advice.
A report from a technical expert such as an architect, building consultant or designer may be useful for supporting your claim if you lodge a formal dispute.
Read more: CAV | Building disputes, defects and delays
The builder has died, disappeared or become insolvent
DBI will cover you if your builder dies, disappears or becomes insolvent. You will need to substantiate the builder’s status. For more information, go to the DBI Help Centre.
If you claim on DBI for work that was not completed, your claim may be limited to only 20 per cent of the contract price and the policy will not cover any advance payments. Contact the insurer for more information.
Most claims are made through Victorian Managed Insurance Authority (VMIA), though occasionally builders choose to be insured through private insurers. Refer to your copy of the policy when making a claim.
Page last updated: 27/09/22