WE ARE THE ONLY CONSUMER ORGANIZATION IN AUSTRALIA REPRESENTING THE INTERESTS OF ALL BUILDING CONSUMERS

house-second-headeraa1jpg-1Consumers who attempt to build, extend, renovate or do repairs are totally unprotected and we can prove that this has been the case for the last 23 years. Many independent inquiries have confirmed this fact, but no government will listen or act to stop what is essentially ‘legalized’ building fraud. Just read some of the stories of those whose lives have been ruined, Then come join us and be part of bringing about genuine change. 

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Part One: THE BIG GOVERNMENT RIP-OFF

VMIA DOMESTIC BUILDING WARRANTY INSURANCE

IT’S NOT PERFECT…
IT’S NOT EVEN GOOD…
IT’S NOT SLIGHTLY GOOD…
IT’S NOT EVEN SLIGHTLY BAD…
IT’S WORSE THAN BAD…
IT’S WORSE THAN VERY BAD
IT’S A VERITABLE RIP-OFF

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IT’S NOT FIRST RATE
IT'S NOT EVEN THIRD RATE
ITS NOT FIRST RESORT
IT’S LAST RESORT
IT’S VERY, VERY UNFAIR
AND IT GIVES VIRTUALLY NIL COVER (see part 2)

THE EXTRA COVER NEEDED TO BRING POLICIES TO EQUIVALENCE OF COMPREHENSIVE CAR INSURANCE:

FIRST POINT OF CALL (REPLACING DBDRV)
FIRST RESORT INSURANCE LINKED TO BUILDER REGISTRATION
COVER FOR ALL DEFECTS FOR FULL WARRANTY PERIOD
PENALTIES FOR SUCCESSFUL LARGER CLAIMS
A FULL DEFINITION OF DEFECT

When premiums are $8.1 Million and payouts just $106 000 (2013) something is horribly wrong & HOME OWNERS ARE BEING GROSSLY CHEATED.

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Part Two: THE BIG VICTORIAN GOVERNMENT RIP-OFF

VMIA DOMESTIC BUILDING WARRANTY INSURANCE

Analysis with minimal figures is always a difficult job… but we have some vital 2013 figures courtesy of the Ombudsman:

$8.1 Million premiums vs $106 000 total payout

This involved something like 3800 claims from building consumers who had taken matters to authorities & courts and chased their builders to bankruptcy just to become eligible to claim on insurance… PLUS those whose builders had died during construction (nil we believe).

What we were not told:
1. How many home owners claimed for home completion after their builders died
2. How many builders went bankrupt during house construction
3. How many builders fled the country during construction
4. What was the average claim for defects.

But assuming that no payouts were made for builders dying or fleeing the country, we have 2 categories remaining:-
• Builders going bankrupt during construction (costs of completing those homes), and
• Builders being chased to bankruptcy and claims being made for defective works.

Now let's assume no claims for defective work were made (although not true),

You can see from the above figures, that the cover afforded to the 50 000 or so (new homes, units, additions, renovations projects) home owners of 2013… (for builders dying, fleeing the country or going bankrupt during construction), amounted to a probable maximum of 5 projects… and maybe just one.

The other 3795 (of the total 3800) claimants very likely got between nil and $27.93.

That’s not insurance… that’s HIGHWAY ROBBERY!

Very experienced hero VMIA lawyers obviously fought to the death against these claimants… to their likely large (legal expenses) detriment IF THEY HAD ENOUGH RESOLVE LEFT TO FIGHT.

And who wouldn’t claim against the insurer when they had already had to pursue the builder to bankruptcy for years (in the courts no doubt), just to get to claim at all?

It’s obvious that today there is no point in going to any authority (particularly those without any discretionary powers) other than DBDRV (because it’s compulsory), appeal the decision and then go to VCAT as explained in one of our earlier articles.

New Victorian Reforms now force new home owners to visit the head-banging compulsory first-stop dispute forum DBDRV before any of this fighting in VCAT or against the government insurer VMIA is even permitted.

And that is what we have as out domestic building warranty insurance insuring our people against the rampant defectively built homes, units, additions and renovations of today…A TOTAL RIP-OFF INSURANCE SCHEME… FACT.

Successive Victorian Governments should hang their collective heads in shame!

Let's get rid of it like Tasmania did and LET'S START AGAIN.

VBAG attempting to keep building consumers and the public fully informed.
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HOW GOVERNMENTS PROTECT BUILDERS TO THE DETRIMENT .....................................OF HOME OWNERS........................................

It’s all about layers… layers of protection… six of them in all.
Common law is set up to protect all enterprise… via proprietary limited laws.

This is to enable the enterprise to get going again after going bankrupt… But creditors (apart from the banks) are not so well protected.

We all heard about the Family First Party Senator Bob Day’s multiple building firms going belly up. Well… he was reported as promising that he would help everyone that he could… even to the point of selling his house.

I wonder if one of those helped people was ex-senator Bob himself… because VBAG hasn’t heard anything to the effect that he was looking for work or on the dole or homeless.

You see, proprietary limited means that the degree that creditors can go to is limited to a certain (usually grossly inadequate) number of assets. The common scenario is that the owner of the bankrupt business is still not destitute after the calamity… but many of his / their creditors most certainly are… but not the banks.

How often do you hear of the financially disadvantaged clients and creditors getting paid out something like 15 cents in the dollar… but never in full? The banks get paid out first… and then there is usually very little left for the rest.

And what’s the bet that ex-Senator Bob isn’t homeless (despite verbally offering his house); and he is very unlikely to be on the dole or looking for work.

You see, he can’t help people if he isn’t in business (as the Prime Minister Malcolm Turnbull repeatedly explains). So the odds are that he is again in business through one of his other companies… one not involved in the liquidation scenario.

You have to give incentives to companies (such as the Liberal Government’s idea of lowering their tax), so that the companies will grow or think up another way to exploit some un-tapped area of the world economy, make an obscene profit, off-load much of that profit through off-shore tax havens… and then employ a few more people (including some highly-paid innovative tax consultants)… not that we’re cynical or anything like that… and the lower tax will mean less for the government, which will have to be meaner that they already are.

Then there is the VBA Victorian Building Authority with its discretionary powers to de-register builders. Trouble is that they invariably choose not to exercise these discretionary powers… and from a recent Supreme Court case, it seems that the Building Act 1993 limits the usage of these discretionary powers to times whilst the buildings are under construction… as in the VBA vs L.U. Simon Builders Proprietary Limited, builder of the burnt-up Lacrosse Apartment Towers.

Once each Relevant Building Surveyor says that the apartments (or the units or the houses) are habitable, that’s it… especially for the apartment owners… they have no warranty insurance scheme to rely on… but according to the Victorian Government, (and all the other states bar possibly Tasmania), we have compulsory warranty insurance for all those building new homes, units and additions in place to protect building consumers.

As George Carlin the comedian says… BULLSHIT.

Home owners (in Victoria) have only atrociously unfair VMIA Last-Resort Domestic Building Warranty Insurance to cover them for a few unfortunate eventualities such as completion of houses left incomplete by a bankrupt builder, a walk-away builder and the death of a builder prior to completion.

THAT IS IT… And they will fight you to the death, if you ever manage to get to the position of making the builder go bankrupt over his defective work.

VMIA insurance does not penalise builders for gross breaches of regulation or grossly poor workmanship (as for comprehensive car insurance policies), but makes the owners chase the builders to bankruptcy in an effort to have their defect-riddled new homes, units and additions brought to a reasonable quality as was contracted.

BUT WAIT… THERE’S MORE…

Now there is (SINCE July 2016), another layer of protection afforded builders in the DBDRV (compulsory first stop dispute conciliation) forum, where owners are pressured to accept a vastly reduced list of agreed items to be “fixed’ by the builder pressured to return to site… the same builder who could not get it right the first time… the motto being… “Take it or leave it… the dispute and your claim have been expedited.”

These agreed defects will almost certainly be band-aided because the builder’s agreement to these defects only occurred because he knew he could send his tradesmen back cost-free and unsupervised… AGAIN… to band-aid those particular items identical way that these defects (that failed in just a short time), were installed in the first place… so they will again fail in the not too distant future.

TO SUMMARISE THE 6 LAYERS OF PROTECTION

1. Common Law… proprietary limited companies allowed. No direct penalty system via professional indemnity insurance for the Builder DB-U required in each company… seen as a double protective layer to enable this entrepreneur to re-establish himself after a bankruptcy, AND to allow the company to continue to build inferior houses in the event of a gross breach of regulations and/or poor workmanship well below expected minimum standards.

2. Building Act 1993… VBA formed with discretionary powers to penalise builders… not acted upon likely because of pressure from the government passing on the pressure from housing associations and very big business owners.

3. Domestic Building Contracts Act 1995 (as amended 192(?) times)… defect and specification not adequately defined, giving rise to grey areas that are exploited by negating solicitors and barristers to the great detriment of home owners. Some heroes they are… (NOT).

4. DBDRV… the compulsory first-stop dispute forum (VIC) with its main objective to expedite every dispute. Basically seen as a head-banging exercise (similar to VCAT Compulsory Conferences) to dampen peoples’ resolve.

5. The VMIA Domestic Building Warranty Insurance Scheme… thought to be totally unreasonable on home owners in nearly every way possible.

6. The VCAT Act which deliberately makes VCAT a very tough place to fight the good fight and win (but it is possible with expert help right from the start).

The State Governments and COAG with very lax rules on expertise in the main standard The National Framing Code, and its lack of clarity to enforce the correct method of classifying soil types in Standard AS 2870.1 for soil reports… all of which are supposed to result in cheaper houses have mad and/or allowed this to occur... with thousands of new home owners' live shattered.

THAT’S A WHOLE LOT OF BUILDER PROTECTION GOING ON OUT THERE.

Builders (and soil report writers and relevant building surveyors and building consultants) are grossly over-protected in the opinion of VBAG… at great expense to new home, unit, additions owners.

VBAG keeping people informed if they make the effort to visit our site.
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Term Distortions 9

‘RELEVANT BUILDING SURVEYOR DUTIES’ IS A TERM THAT IS MISUNDERSTOOD BY ALMOST ALL BUILDING CONSUMERS.

The AIBS (Australian Institute of Building Surveyors) clearly states that:

“Building surveyors are not responsible for the level of workmanship, quality of building work, product reliability or warranties implied under contractual arrangements between consumers and builders.”

And neither are the Certifying Building Inspectors who carry out the regulatory (usually 4) mandatory inspections responsible for the above matters…

But the Registered Builder (Unlimited) and/or his Supervisor, and your Building Consultant (often wrongly called Building Inspector) are the ones responsible for such matters.

The AIBS (Australian Institute of Building Surveyors) further states that:

“A building surveyor assesses the requisite documentation that must be included with an application for a building permit.
Building surveyors have a sound knowledge of the Act, Regulations and BCA and provide regulatory advice to ensure that the building permit will substantially comply with the Building Act, Regulations and National Framing Code (until recently called the BCA).

Building surveyors ensure that any required consent of a reporting authority is obtained (e.g. fire brigade, council, water authority) and any relevant planning permit or other prescribed approval has been obtained and is consistent with the building permit application.

A building permit is required before any building work can be commenced. Building work may range from the construction of simple sheds, carports and housing additions to large complex structures such as high-rise city buildings and large shopping centres and industrial buildings.

Considerable documentation will be required with a building permit application, which will usually include the plans and specifications prepared by architects or architectural draftspersons, and structural, services and fire safety engineering designs.

One aspect of the role of building surveyors is to inspect buildings during construction. They conduct mandatory inspections of building work as it progresses.

The role of the building surveyor is to inspect whether the building work complies with the Act, Regulations and the BCA.
Building surveyors may engage a building inspector to conduct inspections on their behalf however, the building surveyor remains responsible for ensuring that an inspection is properly conducted and that the building or building work complies or substantially complies with the regulations and the building permit.

The current mandatory inspections which may be applicable as per the requirements of the Building Regulations 2006 include foundations, in-situ concrete members, frame and final inspection.

Sometimes additional inspections are required. A building surveyor does not perform the role of a supervisor for a construction project.

When a building project is complete, and following the final mandatory notification stage, the building surveyor must issue an occupancy permit or certificate of final inspection (whichever is applicable) when the building is deemed... suitable for occupation.

The issue of an occupancy permit or certificate of final inspection does not mean or imply that the building work is free from defects or complies with the Building Act, Domestic Building Contracts Act, or Planning and Environment Act.

However, it does mean that from that point, the building may be occupied for the purpose for which it was designed and constructed.”

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So if you thought that the combination of Relevant Building surveyor / Certifying Building Inspector would safeguard the quality of your new home, unit or additions to your home, you, like vast majority of Australians, would be very wrong indeed.

They are there solely to ensure that your home is habitable and compliant in a regulatory sense.

According to the AIBS though, they do ensure that the permit will substantially comply with the National Framing Code, amongst other acts and regulations.

They are therefore very responsible for the site being classified correctly via a soil report, and must ensure that the correct method of assessing this classification of the soil is compliant with AS 2870.1 the Australian Standard Code for Residential Slabs and Footings.

In fact their first inspection is of the foundations, and their assessment of the permit documentation includes their assessment of the soil report, (although it is notable that this particular piece of information is missing from the official AIBS document)… a deliberate omission VBAG wonders?

Relevant Building Surveyors are therefore highly responsible (along with the (DB-U) Registered Builders and/or their Building Supervisors, and the Soil Report Writer) for incorrect methods being used to arrive at the soil classification. Their failure to ensure that defects are not present in the works at final completion is NEGLIGENCE.

VBAG also points out that; although the official AIBS document states that the final certificate does not imply that the works are free from defects, their required assessment of the documentation as to substantial compliance with the National Framing Code does raise the matter of Relevant Building Surveyors accepting the (usually builder supplied) pathetic Specifications (with virtually no detailed workmanship clauses contained in them), permits the (rife in the residential building industry) short-cutting by tradesmen of labour requirements, many of which are actually written in the National Framing code.

It is the opinion of VBAG that this AIBS stated requirement of such a duty of “ensuring substantial compliance’ with this code, is not complied with by most Relevant Building Surveyors.

The confusion caused by building consultants calling themselves building inspectors is definitely not helping people understand that Certifying Building Inspectors are not looking for defects.

Perhaps that is all part of the conspiracy… because (based on over 22 inspections where a well-known building consultant also carried out an inspection because the owners spotted defects that their first building consultants missed...

The average building consultant generally finds less than 25% of the actual defects (and less than 10% of the structural defects) in new homes, units and additions, courtesy of :-
1. Not having a thorough definition of defect or relying on the AS Code As4349.1, AND…
2. Most building consultants (being employees), are not permitted under O.H.&S. and workers compensation insurance rules, to climb onto roofs, or into the roof space, or to crawl under houses with timber floors… (the last one courtesy of the pathetic Code AS 4349.1)... written by employers.

As regards the failure of at least 20 (possibly as many as 50) Relevant Building Surveyors to prevent incorrect soil classifications for new house sites located in the volcanic loam soils of the outer western suburbs of Melbourne, (homes built since about 2001 when Victoria was already 5 years into a record drought)…

Has anyone heard of the de-registration of even 1 (of these 20 or more Relevant Building Surveyors), as a result of the (conservatively estimated) 4700 badly deformed waffle-pod slab houses as a result of this particular negligence?

Our present building legislation, via our government-owned rip-off warranty insurance schemes, VCAT and recently DBDRV is protecting thousands of negligent registered building practitioners… builders (DB-U), building supervisors, building consultants and rarely mentioned relevant building surveyors.

Soil report writers and building consultants are not even required to be registered!

VBAG keeping Building Consumers & hopefully the general public informed.
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Did You Know: (R): ROOF TILE FLEXIBLE POINTING IS DEFECTIVE IN 99% OF NEW HOMES, UNITS, ADDITIONS & ROOF RESTORATIONS

The photo attached shows in red the flexible pointing (final coat) minimum requirements for hip and ridge roof tiles.

We know this is not done properly in over 99% of cases, because 121 roof tile inspections IN A ROW revealed 2 serious general short-comings in every installation, worth over $1000 to rectify properly.

The short-changing is done because roof tilers are paid less than several other trades and also less than they should be paid (as for ceiling insulation installers),
because a neat job can be learnt faster than most other trades. And, because they are paid less than other trades, roof tilers short-cut (as do ceiling insulation installers).

THIS IS NOT PUBLICISED BY ANY BUILDING AUTHORITY OR ANY BUILDING CONSULTANT ORGANIZATION…

Because they simply do not inspect such installations, and therefore do not realize that this is defective in over 99% of tile roofed new houses, units and additions projects… as is the case for tiled roof restoration jobs AND re-pointing jobs (particularly the re-doing of partially failed new home pointing by builders).

On top of this the building supervisors do not realize that it is happening on their projects… or do not care… or do not have the time to be concerned with such trifling matters.

Certifying building inspectors also fail to notice this short-cutting, because it has not failed at 2 or 3 months old… it takes a few years.

The building supervisor and the certifying building inspector and any building consultant inspecting this at final stage (say), are all negligent for not discovering this short-cut, just as they are negligent for not discovering that the required number of fixed roof tiles (every full tile in every second row) has been considerably short-changed.

What the builders need to do is pay roof tilers more, and insist that they do not short-change pointing and tile fixings. (Pigs might fly as regards paying roof tilers more)!

The two areas short-changed are:-
1. The base packing is not trimmed off to allow the flexible coat to adhere to the underside of the edges of the hip and ridge capping tiles, and
2. The thickness of the final coat can be as little as 1 mm or even less and still cover all of the base packing and still look neat, because the base packing was trimmed off flush with the edge of the hip and ridge capping tiles. (3 mm min. is required).

Because the ultra-thin final coat often lasts a few years without much of a problem, (and is not a structural defect), this defect is not picked up anyone involved in the construction and approval process; and is not discovered by the vast majority of building consultants, (usually wrongly called building inspectors), because they :-
1. Do not have a definition of defect which includes compliance with manufacturer minimum requirements, and
2. Only look for items which have failed, courtesy of the right of a component of a building having the right to last for a reasonable time… also not being part of their definition of defect, and
3. The fact that WorkSafe and O.H.& S rules not permitting employees to climb onto (OR INTO) roofs without harnesses and such-like.
And so over 99% of new homes have this (and the other aforementioned) defect…

AND THE GOVERNMENT COULDN’T GIVE A DAMN...

Because it creates more work in the future as maintenance crews, (in the burgeoning since 1994 new house maintenance industry); repeatedly band-aid, (in the same fashion as what has failed unreasonably early), what is actually a defect that should be rectified by the builders, because no specifications spell out the minimum requirements.

And nobody knows, and nobody will care… until a massive storm blows off thousands of roofs. What a pathetic industry.

Spread the word TO ALL OF YOUR FRIENDS AND RELATIVES or this will continue forever. Most of us will be affected by this one day.

VBAG keeping building consumers informed and hopefully the general public.
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Over the last fifteen years, there have more than one hundred (100) Inquiries into the building industry and its governance. These have included parliamentary inquiries and investigations by the Auditor-General, the Productivity Commission, the Ombudsman and other independent organizations. 

The Victorian building industry has suffered from systematic and systemic failure for decades. We now have overwhelming evidence to confirm that this ‘system’ has been malfunctioning for the last 22 years.

After decades of criticism of  the Building Commission’s failure as the ‘industry regulator’, and following damning Reports from the Victorian Auditor-General (2011 and 2013) and a scathing Report from the Victorian Ombudsman in 2012, the Government decided that the Building Commission’s record was so tarnished that it had to be abolished.