Further Changes to Victoria’s Building Industry
Following the significant domestic building reforms introduced in 2025 – refer to our earlier article here: Amendments to the Domestic Building Contracts Act 1995 (Vic) – Cornwalls, the Victorian Government has remained active in this space in 2026, with the recent passage of the Building and Plumbing Administration and Enforcement Act 2026 (Vic) (BPAEA) and the introduction of the Building Legislation and Treasury Legislation (Tax Relief) Amendment Bill 2026 (BLTLB). The key changes in the BPAEA include further regulation of building and plumbing work in Victoria and the conferral of additional powers on the Building and Plumbing Commission (BPC). Separately, if passed, the BLTLB would establish a regime for the provision of 10-year insurance for defects in apartment buildings of four storeys and above, and would also expand the powers of building surveyors to make emergency orders in certain circumstances.
Further to these changes, the Victorian Government now proposes a more targeted set of amendments, which have been introduced through the Consumer Legislation Amendment Bill 2026 (Vic) (Bill). This Bill is the focus of this article.
While the Bill spans a broad range of consumer protection legislation, it also contains several amendments in Part 4 that affect the operation of the Domestic Building Contracts Act 1995 (Vic) (DBC Act) and, in turn, the Building Act 1993 (Vic) (BA).
Although less extensive than the reforms considered in our previous article, the proposed changes are intended to improve the practical operation of Victoria’s domestic building framework and address issues that have emerged as the 2025 reforms move towards commencement.
If the Bill is passed by Parliament, and a provision of Division 1 of Part 4 does not come into operation before 1 December 2026 by proclamation, that provision will come into operation on 1 December 2026.
Clarifying Variations under the DBC Act
As detailed in our previous article, the Domestic Building Contracts Amendment Act 2025 (Vic) combined the previously divided section 37 and section 38 variation regimes between builders and building owners.
One of the key amendments in the Bill relates to agreements that vary domestic building contracts. The Bill proposes amendments to the DBC Act concerning certain variation agreements above particular thresholds, reflecting the Victorian Government’s continuing focus on transparency and consumer protection in relation to changes in scope, pricing and contractual obligations during a project.
While the detailed operation and implementation of the amendments will need to be considered as the Bill progresses through Parliament, the changes appear aimed at providing greater certainty regarding the treatment and enforceability of contract variations and ensuring that variation arrangements remain consistent with the broader consumer protection objectives of the DBC Act, including, insurance and other formalities required for domestic building contracts over the $10,000 contract price threshold.
The first limb appears to apply to contracts that sit outside the definition of a major domestic building contract. Where the relevant threshold is exceeded, the parties may need to enter into a major domestic building contract, obtain appropriate building insurance (in instances where the contract price is above $16,000) and comply with the variation requirements under the DBC Act.
The second limb deals with major domestic building contracts and provides that builders who fail to document variations valued at more than $5,000, or another prescribed amount, could be fined for each undocumented variation. A builder seeking payment for further works after entering into a major domestic building contract will need to ensure that those variations are properly documented. There is a risk that a builder seeking payment for building works performed in accordance with undocumented variations may face a penalty if the issue is raised in a payment dispute or regulatory context.
In summary, the amendments are a reminder for all industry participants of the importance of maintaining robust variation procedures and ensuring that contractual changes are appropriately documented in writing. If those procedures are not followed, penalties may be imposed if non-compliance with the DBC Act is reported or the matter is referred to the BPC.
Building Act Amendments
The Bill also proposes consequential amendments to the BA. These amendments sit alongside the broader building reform agenda that has seen the establishment of the BPC and the introduction of enhanced consumer protection measures across the residential construction sector.
Although the proposed amendments are not intended to fundamentally alter the BA framework, they form part of the Victorian Government’s ongoing effort to refine the interaction between Victoria’s building legislation and the recently enacted domestic building contract reforms. In practice, industry participants should expect continued legislative alignment between contract administration requirements, regulatory oversight and consumer protection measures.
What does this mean for Industry Participants?
The Consumer Legislation Amendment Bill 2026 demonstrates that Victoria’s building reform program remains active. Rather than introducing another wholesale overhaul, the Bill seeks to fine-tune aspects of the legislative framework to ensure that the protections introduced through recent reforms operate as intended.
The apparent intention is to promote greater transparency and better record keeping, particularly because variations are a common source of disagreement between parties and, ultimately, disputes.
We will continue to monitor the Bill as it progresses through Parliament and provide further updates as additional details become available.
Comments & Queries
If the Bill is passed largely unamended, contract variation order templates and processes may need to be reviewed and updated for principals, developers, contractors and builders.
Please contact the authors, or any member of our Building & Construction team, should you have any questions about this article, or if wish to discuss how we may be able to assist your business and/or projects.
Disclaimer
This information and the contents of this publication, current as at the date of publication, is general in nature to offer assistance to Cornwalls’ clients, prospective clients and stakeholders, and is for reference purposes only. It does not constitute legal or financial advice. If you are concerned about any topic covered, we recommend that you seek your own specific legal and financial advice before taking any action.