Victorian Building Authority’s ‘appalling’ failures exposed in scathing report

A damning review has found the Victorian building regulator’s severe failures left homeowners suffering “significant” financial, emotional, and health issues.

A damning review has found the Victorian Building Authority’s “appalling” interactions with dissatisfied homeowners left them with “significant financial, emotional and health issues”.

The building industry regulator is responsible for monitoring the industry and registering over 65,000 builders, plumbers, building surveyors and other practitioners.

After widespread criticism of the watchdog’s handling of complaints from homeowners facing financial stress over unfinished or defective houses, an independent review was announced last year.

The review looked at seven longstanding complaints and concluded the VBA failed to prioritise customer protection and its response to complaints was “inadequate”.

A report has found the Victorian Building Authority has failed homeowners. Picture: NCA NewsWire / Diego Fedele

The devastating toll of the failures was laid bare in the final report from investigators Bronwyn Weir and Frances Hall, which was released on Thursday.

“Each and every one of (the complainants) has suffered and continues to suffer severe financial, emotional and physical distress,” they wrote.

“Every aspect of their lives has been negatively impacted. They have watched their savings or superannuation be replaced with debts they cannot bear.”

The review focused on seven “complex” complaints from homeowners including a retirement-age couple, a number of families, and a property developer.

The majority of the building practitioners involved in the case studies had breached the legislation or “engaged in unprofessional or incompetent conduct”, the report concluded.

Yet when the homeowners turned to the VBA for assistance, the regulator failed to hold the perpetrators accountable.

The report found ineffective systems resulted in complaints being duplicated, lost, or ignored either entirely or for months.

The delays in progressing complaints were found to be “excessive”, with one case study languishing for more than two years without a result.

Customers who made complaints had a “dreadful experience”, the report concluded. Picture: NCA NewsWire / Diego Fedele

Ms Weir and Ms Hall noted homeowners were told to provide their own expert evidence to the VBA or their complaints would not be investigated.

They revealed that the VBA tended to focus only on investigating issues and practitioners identified in complaints instead of also assessing other “plainly evident” issues.

The authors stressed the “most concerning observation” was the treatment of complainants, who were referred to in internal documents as “emotional” and “stirring up trouble”.

They found the culture of the VBA was dismissive towards complainants, did not recognise the trauma involved, and encouraged staff to push back against their concerns.

“There is no doubt that the VBA’s management and culture failed consumers,” Ms Weir and Ms Hall concluded.

“Because the regulation of the sector has been ineffective over many years, poor standards of building work and unethical conduct have been allowed to flourish in Victoria’s building industry.”

One of the shocking case studies of the regulator’s failures was a family who paid to have their house built for $2.6m – only to have the cost soar to $4.6m two years later.

The VBA was criticised for not holding building practitioners accountable. Picture: NCA NewsWire / Diego Fedele

The family paid the inflated bill but the contract was terminated when the house was only half built, forcing them to pay $2.6m to a new builder to finish the house and fix defects.

In a letter to one of the complainants, VBA chief executive Anna Cronin said she took responsibility for the watchdog’s “shortcomings” in handling their complaint.

“I apologise for the delays in taking action, the lack of empathy from the VBA to your situation, and the added stress associated with the VBA’s processes,” she said.

“We should have been faster and more focused in our investigation, and we should have taken your concerns more seriously from the outset.”

The report made 20 recommendations aimed at improving the regulator’s handling of complaints and bolstering its ability to tackle poor conduct in the building industry.

In a statement, Ms Cronin said she supported all of the recommendations in principle and was committed to implementing them “expeditiously”.

“It is clear the performance of the Authority has fallen well short of this standard,” she said.

“The report clearly identifies examples of where the VBA failed to use its powers to their fullest extent, and didn’t treat consumers with the respect they deserve.

Victorian Minister for Planning Sonya Kilkenny announced an overhaul of the building regulator. Picture: NewsWire / Nadir Kinani

These cases are truly heartbreaking, and I’m appalled at how badly each individual has been let down by practitioners, the VBA and the building system.”

Minister for Planning Sonya Kilkenny on Thursday announced the VBA will be replaced by a “a new, more powerful watchdog” called the Building and Plumbing Commission.

The Commission will consolidate all facets of building quality control and have tough new powers to ensure building practitioners are complying with the regulations.

“For those building, renovating or buying a home, the new Regulator will mean peace of mind. For those found doing the wrong thing, it’ll mean consequences,” Ms Kilkenny said.

Originally published as Victorian Building Authority’s ‘appalling’ failures exposed in scathing report