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What is the Domestic Building Contracts Act 1995?

An Overview on the Domestic Building Contracts Act 1995

The Domestic Building Contracts Act 1995 (Vic) is a legislation intended to regulate domestic building work. Often, builders and building owners enter into domestic building contracts for the construction of homes or residential buildings. Disputes often arise between the parties regarding residential and domestic disputes. The legislation prescribes legal rules to regulate conduct and allocation of risks and responsibilities between the parties when entering into domestic building contracts.

This article addresses the frequently asked questions that owners, builders, and developers may have regarding the framework of the Domestic Building Contracts Act 1995 (Vic):

When did the Domestic Building Contracts Act 1995 (Vic) commence?

The Domestic Building Contracts Act 1995 (Vic) was formerly called the Domestic Building Contracts and Tribunal Act 1995 (Vic). The Explanatory Memorandum of the former legislation stated the Act “significantly reforms the domestic house construction and renovation industry in Victoria”. As part of the domestic building legislation, it was also intended to regulate the domestic construction industry by:

“…ensuring contracts comply with detailed minimum legislative criteria, and ensure fairness to builders and consumer alike, and that appropriate standards of conduct are utilised at all times. “

The former legislation was assented on 5 December 1995. From the date of the assent, the former legislation came into operation in parts. Subsequently, the name of the Domestic Building Contracts and Tribunal Act 1995 (Vic) was amended to be called the Domestic Building Contracts Act 1995 (Vic) in 1998 by section 36 of the Tribunals and Licensing Authorities (Miscellaneous Amendments) Act 1998 (Vic).

Today, the Victorian domestic building legislation is called, and known as, the Domestic Building Contracts Act 1995 (Vic).

What are the purposes and objectives of the Domestic Building Contracts Act 1995 (Vic)?

The Domestic Building Contracts Act 1995 (Vic) describes three purposes:

  • to regulate contracts for the carrying out of domestic building work.
  • to provide for the resolution of domestic building disputes and other matters by VCAT.
  • to require builders carrying out domestic building work to be covered by insurance.

Similar to the purposes described, the objectives of the Domestic Building Contracts Act 1995 (Vic) share similar features:

  • to provide for the maintenance of proper standards in the carrying out of domestic building work in a way that is fair to both builders and building owners.
  • to enable disputes involving domestic building work to be resolved as quickly, as efficiently, and as cheaply as is possible having regard to the needs of fairness.
  • to enable building owners to have access to insurance funds if domestic building work under a major domestic building contract is incomplete or defective.

Read More: “What is Domestic Building Insurance?” provides overview on the general requirements for domestic building insurance.

What is the format and layout of the Domestic Building Contracts Act 1995 (Vic)?

Generally, the format and layout of Domestic Building Contracts Act 1995 (Vic) is divided into six Parts, and each Part is further sub-categorised into Divisions and sub-Divisions. The six relevant Parts explore broad categories and themes relating to domestic building contracts, and is described as follows:

PartsSummary of Legislative Content
Part 1Preliminary
Part 2Provisions that apply to all domestic building contracts
Part 3Provisions that only apply to major domestic building contracts
Part 4Domestic building work disputes
Part 5VCAT Jurisdiction
Part 6General

When each Part is inspected, it is further divided into Divisions. We provide a brief summary of the content for each Division contained in those Parts.

What is Part 1 (Preliminary)?

Part 1 of the Domestic Building Contracts Act 1995 (Vic) is not divided into any further Divisions but lists out the applicable sections. Generally, Part 1 (Preliminary) sets out the preliminary matters of the Domestic Building Contracts Act 1995 (Vic), such as the Purpose, Commencement, Definitions, Objects, and the kind of building work that may or may not apply.

Read More: For further information about domestic building work, “What is domestic building work in Victoria?” explores the meaning of domestic building work.

What is Part 2 (Provisions that apply to all domestic building contracts)?

Part 2 of the Domestic Building Contracts Act 1995 (Vic) is divided into five separate Divisions. Generally, this Part relates to the content of domestic building contracts, prescribing the contractual obligations expected between the parties to a domestic building contract, and legal rights relating to a building site. The legislative content involving Division contained in Part 2 are described:

DivisionsSummary of Legislative Content
Div 1General warranties
Div 2Restrictions applying to the nature and contents of contracts
Div 3Provisions concerning building sites
Div 4Provisions concerning prime cost items or provisional sums
Div 5Other matters

Read More: For further information about domestic building contracts, “What is a domestic building contract in Victoria?” provides an overview on the statutory meaning of a domestic building contract.

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What is Part 3 (Provisions that only apply to major domestic building contracts)?

Part 3 of the Domestic Building Contracts Act 1995 (Vic) is divided into six separate Divisions. Generally, this Part relates to the legal requirements when entering into a major domestic building contract. A major domestic building contract is a domestic building contract for the carrying out of domestic building work that has a contract price of more than $10,000.

The legislative content involving Divisions contained in Part 3 are described as follows:

DivisionsSummary of Legislative Content
Div 1Provisions that apply before a contract is signed
Div 2What contracts must, and must not, contain
Div 3Cooling period after signing a contract
Div 4Provisions applying after the contract is signed
Div 5End of the contract
Div 6Other matters

For a general understanding on major domestic building contracts, other legal topics explored, include:

What is Part 4 (Domestic building work disputes)?

Part 4 of the Domestic Building Contracts Act 1995 (Vic) is divided into nine separate Divisions. Generally, this Part relates to procedural and substantive elements involved in domestic building work disputes. Domestic building work disputes are domestic building disputes involving a domestic building work matter between a builder owner, and either of the following parties: a builder, a building practitioner, an engineer engaged in the building industry, a sub-contractor, or an architect.

The legislative content involving Divisions contained in Part 4 are described:

DivisionsSummary of Legislative Content
Div 1Preliminary
Div 2Referral of domestic building work disputes
Div 3Conciliation of domestic building disputes
Div 4Requirement to stop domestic building work
Div 5Assessment of domestic building work
Div 6Dispute resolution orders
Div 7Power of Director in relation to domestic building work dispute proceedings
Div 8Domestic Building Dispute Resolution Victoria Trust Fund
Div 9Domestic Building Dispute Resolution Victoria

What is Part 5 (VCAT jurisdiction)?

Part 5 of the Domestic Building Contracts Act 1995 (Vic) contains one Division, known as Division 2 (Proceedings), and four separate Subdivisions. The Subdivisions contained in Part 5 sets out the procedural requirements involving VCAT and domestic building disputes, disputes between insurance claims, dispute resolution orders, and miscellaneous matters.

What is Part 6 (General)?

Part 6 of the Domestic Building Contracts Act 1995 (Vic) does not contain any Divisions but sets out relevant sections. The section sets out the other general features of the Act such as: Director’s publications, Domestic Builders Funds, issuance of infringement notices, criminal proceedings in relation to the Act, prohibition of contracting out from the Act, and making of regulations.

Read More: For more information about domestic building regulations, “What is the Domestic Building Contracts Regulations 2017?” provides an overview to the Domestic Building Contracts Regulations.

Notes and Further Information

On topics relating to construction, built form, and the application of the National Construction Code, our related topics include:

Other topics relating to the general principles of contract law, include:

Domestic Building Work | Domestic Building Contracts Regulations 2017 | Domestic Building Contract | Major Domestic Building Contract | Variation (Owner) | Variation (Builder) | Domestic Building Insurance | Progress Payments | Variations (General) | Termination | Repudiation | Causation |

If you are looking for legal expertise and have any questions, connect with an author or a member of our building and construction team.

Do you need legal advice? Call us on (03) 5331 1244 to get in touch and arrange an appointment with one of our lawyers.

You can also connect with us by filling out your details and telling us about your information for legal advice below:

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Authored by:
Ben Franklin, Managing Partner (LIV Accredited Specialist – Property Law), &
Matthew Tran, Lawyer.

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