Veteran builders warn proposed Building and Plumbing Commission will produce ‘bureaucratic nightmare’

Victorians building their dream homes asked for affordable solutions to fix building defects. Veteran builders say the reforms will only lead to increased costs and delays.

Victorians building their dream homes are being warned of higher prices and further delays under the Allan government’s proposed “horror show” overhaul of the state’s building watchdog.

Victims of home builder collapses and veteran builders are sounding the alarm over a push to introduce an all-powerful regulator that will make building insurance the “first resort” for any defects.

While the government claims the reforms will protect families from dodgy builders, critics say the proposed state-run “monopoly” could ensnare builders and homeowners in a bureaucratic quagmire.

The legislation, which is expected to be debated in parliament this week, will create a centralised state authority dubbed the Building and Plumbing Commission.

Critics fear a government “monopoly” could ensnare builders in a bureaucratic quagmire. Picture: Brendan Beckett

The body will be responsible for domestic building insurance, complaints, dispute resolution and enforcement.

If passed, developers of mid and high rise apartments will be forced to hand over a bond worth 2 per cent of construction costs which the regulator will hold for two years to cover any defects.

A similar scheme runs in NSW and Queensland.

However, with the Victorian property industry already loaded up with the highest taxes in the nation, builders are warning the reforms will only push up home prices further.

Founder of residential builder Lyndways Wayne Mercer said the new body would “kill competition” in the insurance market and lead to higher premiums.

“Builders can’t just wear those costs,” the 50-year veteran builder said.

“Make no mistake about it, homeowners will end up worse off.”

Homeowner Siddarth Prakash, who has been locked in an expensive years-long battle with the existing state-run insurer, the VMIA, said expanding the “dysfunctional system into a monopoly” would be a “horror show” for Victorian families.

“I’ve lived through the nightmare already, and experienced years of delay, zero accountability, and a system that seems designed to wear you down,” he said.

“Homeowners won’t have a choice, and when things go wrong, they’ll be stuck in a bureaucratic maze with no way out.”

Siddarth Prakash at his half finished home after his builder went bust. Picture: Supplied

Head of Construction Warranty Insurance at Assetinsure Mark Sinfield said by opening the floodgates to potentially premature insurance claims, builders will be forced into expensive and time-consuming processes.

“This bill risks turning routine complaints into bureaucratic nightmares for consumers – and

could spell disaster for Victorian families and builders alike,” he said.

While director of Construction at Carringvale Construction Management Bryn McMurray said the reforms failed to address the issues of unlicensed trades, fraudulent building licenses, poor regulation, and labour shortages.

The legislation comes after more than 3000 construction firms went bust last year, leaving hundreds of families in the lurch.

Housing Minister Harriet Shing said too many Victorians have had their “savings drained and their hearts broken by dodgy builders”.

“That’s why we’re increasing protections for homebuyers,” she said.

Shadow housing minister Richard Riordan, however, accused the Allan government of trying to “demonise the building industry for cheap political gain”.

“It does nothing for families,” he said.

“It’s not a magic bullet, it’s a soft squishy green pea.”