Home » Help Me: To avoid, deal and get compensation from bad builders.

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To build a quality home, to deal with a bad poor quality builder during my home build, to deal with a poor quality builder when the home is completed and the cracks appear. 

If you have a building problem you will most likely fit into one of three categories:                      1.  When you are thinking of building your family home.                                                              2. The project is unfinished, not yet paid for in full and you do not have possession                  3. The project is completed, paid for in full and you have possession

1.  When you are thinking of building your family home.    

Become a member of Victorian Building Action Group and obtain advise from the experts on how to prevent a home building disaster.    

 2. The project is unfinished, not yet paid for in full and you do not have possession

If you have discovered problems during the building process you will be compelled by the builder to pay the full amount. Employ an independent expert (who actually is an expert, research will be required here as genuine experts are hard to come by) to inspect the property and send the builder a copy of your report.      

3. The project is completed, paid for in full and you have possession

You would have signed a domestic building contract with a registered builder.
The building permits would have been obtained by a building surveyor who is employed by the builder.
Building commenced and the building surveyor (again employed by the builder) inspects the building for compliance at set stages. Stage payments are requested by your builder once the surveyor signs off on each stage. Make sure the dates on your invoices and the inspection reports reflect this.

You have paid the full amount for the building works and have discovered defects with the work, what to do?
The first thing to do in any dispute is to keep good records. Take note of any conversations which occur, along with times and dates. These disputes can be lengthy and you may not remember what occurred 2 or 3 years down the track. If possible make any communication with the builder in writing. Make sure that you put your concerns with the property in writing, include photos and request that independent testing/inspections are carried out. If your builder organises trades or experts to inspect your property ask for a copy of all documents.

Building Advice and Conciliation Victoria is a free dispute service provided by the Victorian Building Authority (VBA) and Consumer Affairs Victoria (CAV). Mediation is voluntary for builders to attend and the ability of the owners to ‘compromise’ is encouraged. If you are not willing to compromise this process will probably not be helpful.

You can request a domestic building inspection report from the VBA. The inspection is $300.00 and the inspector will look only at items which you nominate on your application form. If you receive an inspection report listing defective building work by the builder the VBA will not enforce the rectification of the building works, they will only recommend the builder returns to repair the work. You should organise your own independent inspection/report before the VBA inspection so you are aware of all of the issues with your property. Make the VBA  aware in your application and to the nominated inspector that you are knowledgeable about the situation.

If your builder does not carry out the ‘recommended’ rectification works what do you do?
You can write to the Building Practitioners Board requesting an Inquiry.
The BPB will not force the builder to carry out the building works. After a lengthy investigation they may hold a disciplinary inquiry and may issue a reprimand, fine, or very rarely suspend or cancel a builders licence.
This process often takes longer than 2 or 3 years and will not result in your home being repaired.
During this process it is important to stay in contact with the BPB. Make sure you regularly make written contact enquiring about the status of your file. It is also important that you attend any hearings. All hearings including directions hearings at the BPB are open to the public. You will be dissuaded from attending these hearings but it is important you attend and take notes, do not allow yourself to be locked out.

What now?

You will be encouraged by all relevant government authorities to apply to VCAT in the building list.
Once this process begins you will need to employ a solicitor, gather ‘expert’ evidence, attend numerous mediations and preliminary hearings and spend a large amount of money and years in the VCAT system. If you become involved in VCAT you need to stay completely involved in your case, if your legal representative tells you that you don’t need to attend a hearing, insist you go along. It is very important that you know what is happening with your case.
VCAT does not enforce its own orders, if you receive an order from VCAT and the respondent doesn’t comply you will need to take the order to the Magistrates Court or Supreme Court.

What if my builder dies, disappears, or has gone insolvent?
You can only claim on your Builders Warranty Insurance (BWI) once one of these things occurs. You can now attempt to claim on your insurance but are limited to $200,000; or $300,000 if your policy is dated on or after 1st July 2015. This insurance policy does not cover legal fees. If you have already spent a large amount on fees this policy will not help you recover that amount.
These insurance policies very rarely pay out, or only pay a portion of a claim. Figures released by the Bailleu government show that in 2010/2011 out of $87.8 million in premiums only $108,476 was paid out in claims.

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