Ballarat home owners whose new builds are now nightmares say they have been left without recourse unless their builder goes under.
The Courier heard from dozens of homeowners signed to a Ballarat builder whose houses were unfinished or had significant defects, with complaints stretching back to 2008.
But they are now left with little hope of compensation due to a shortcoming in the consumer law.
Complainants include a young family yet to move into their new home 10 weeks out from the birth of their second child, and a couple whose home was made up of a patchwork of different-coloured bricks laid by three separate bricklayers.
Eddie Vidaić will never stay a night in the Ballarat East home he signed to build in 2014.
Mr Vidaić, a Gulf War veteran, had hoped the Ballarat East townhouse would be a base for him to reach out to young returned servicemen.
He now only hopes a sale price will cover his loan.
“As a veteran I’ve had to go ‘this could kill me’. The ability to own my own home has gone,” Mr Vidaić , who has post traumatic stress disorder, said.
He said three plumbers abandoned the build because they hadn’t been paid.
“Someone along the line should have picked up on this and stopped it six months in… but the fact that the system didn’t pick (it) up tells you there’s something wrong. There’s no failsafe device.”
The industry’s consumer safe guards have been in the spotlight since the collapse of Watersun Homes.
In March 2017 more than 400 homeowners in Victoria, including about 50 in Ballarat, were left in the lurch when the Geelong-based builder went into administration.
Affected homeowners were covered by the Home Warranty Insurance system which protects consumers in cases where builders have died, disappeared or become insolvent.
The scheme offers no coverage in a case like Mr Vidaić’s, who was told his only option was to take the builder to the Victorian Civil and Administrative Tribunal.
Mr Vidaić’s former builder, who The Courier has chosen not to name for legal reasons, did not respond to multiple requests for comment.
But as of Wednesday the builder in question was still a registered practitioner with the Victorian Building Authority and a member of the Master Builders Association of Victoria.
Consumer Affairs confirmed there had been no action taken against the builder or a business under his name and VBA said there were no current registered complaints.
One Ballarat homeowner, who asked only to be known as Aaron, said his build had seen a revolving door of tradesmen, including three bricklayers, two of whom used a different coloured brick.
The work of one bricklayer was so poor the following company had to redo their work, Aaron said.
Aaron and his partner’s house is now four months out of contract.
The young couple will soon have to start paying rent on top of their mortgage repayments and storage fees.
“It’s costing me at least $1200 a month and it has done for the last six months and I’m not seeing anything with that money and I don’t know when I will. I have regularly called every single agency that has been out there for help. They basically say they need a trigger - if he goes bankrupt, you’re sorted. Other than that you’re going to have to pay to cancel the contract or you’re just going to have to wait,” Aaron said.
Master Builders Association of Victoria chief executive Radley de Silva said previous processes which required consumers to take action through VCAT were “inefficient and costly”.
The Domestic Building Dispute Resolution Victoria is the independent government agency set up in April this year to deal with disputes previously sent to VCAT.
The warning signs
The Victorian Building Authority has released seven warning signs to protect consumers from unlicensed practitioners.
- No results are found when you type the builder’s or plumber’s name into the VBA’s database.
- They do not ask you to enter into a written contract before the project starts.
- They ask for too much money up front or at each set payment stage. By law in Victoria, a deposit can be no more than five per cent of the total project cost.
- They are not prepared to tell you about or show you what homes they have recently built.
- They cannot or will not show you their VBA ID card.
- They are not a member of an industry body.
- You are not given a copy of your builder’s domestic building insurance policy or a certificate of currency covering your property before construction.
What you can do
The following advice comes from Consumer Affairs Victoria
If a dispute arises between you and your builder Consumer Affairs Victoria's advice is to take the following steps to resolve it.
Step 1: Try to resolve the dispute yourself by discussing the issue with your builder. Keep copies of all relevant documents (e.g. contracts, invoices and written communications).
You should also consider:
- keeping a record of all conversations you have had with your builder
- taking photographs of work that is the subject of your dispute.
Step 2: If you cannot resolve the problem by speaking to the builder directly, send them a letter or email, formally outlining the issue and requesting a response.
By putting your concerns in writing, you will have a record of your discussions. This can be shown to a third party if you choose to take your complaint further later on, and demonstrates that you made a reasonable attempt to resolve the problem yourself.
You should use registered mail if you are sending your correspondence by post.
Step 3: If you do not receive a response from your builder within a reasonable timeframe, and are unable to resolve the dispute yourself, you can lodge an online application for dispute resolution through Domestic Building Dispute Resolution Victoria (DBDRV).
DBDRV can resolve building disputes without the cost and time often associated with courts and tribunals, and has the power to issue dispute resolution orders to resolve disputes that are not completely resolved by agreement. DBDRV is equally accessible to building owners and builders.
Make sure you check your eligibility for DBDRV before starting your application. For more information on eligibility and how to lodge an application, visit the DBDRV website.
If you need further advice about your options to resolve a building issue, contact the CAV Building Information Line on 1300 55 75 59
Domestic Building Insurance
By law, builders or tradespeople must take out domestic building insurance for their clients when the cost of the works exceeds $16,000.
This insurance only gives you limited cover.
Domestic building insurance, previously known as ‘builders warranty insurance’, protects consumers in the event their builder or tradesperson cannot finish the building project or fix defects because they have:
- become insolvent, or
If your policy was issued on or after 1 July 2015, it also provides cover if the builder fails to comply with a final order made by the Victorian Civil and Administrative Tribunal (VCAT) or a court.
Your builder or tradesperson must provide you with a copy of the policy and a certificate of insurance covering your property before you pay a deposit or any other money.
Domestic building insurance covers costs up to $300,000 to fix structural defects for six years, and non-structural defects for two years. Claims on the policy for work that was not completed may be limited to only 20 per cent of the contract price.
In all other cases, your builder or tradesperson is required to fix or complete works in accordance with the contract.