New legislation, to come into operation on or before 1 July 2026, will give the Building and Plumbing Commission (BPC) expanded authority to issue rectification orders for incomplete, defective, or non-compliant building work for up to 10 years following the issuance of an occupancy permit. Importantly, these powers apply retrospectively, capturing building work completed before the reforms take full effect.
This article, the third in a series on the impact of the Building Legislation Amendment (Buyer Protections) Act 2025 (Vic) (Act), examines the Building Amendment (Rectification Orders) Regulations 2025 (Vic) (Regulations). In particular, we examine how the proposed Regulations provide clarity regarding the operation of the new rectification order power.
What are rectification orders?
- (a) The Act empowers the BPC to issue rectification orders requiring builders, subcontractors and developers to fix building work that is incomplete, defective, or non-compliant.
- (b) The rectification order sets out the actions the recipient must take to achieve compliance and specifies the timeframe for completing those actions.
- (c) If a rectification order is issued to more than one person (for example both the builder and the developer), each party is jointly and severally liable to comply with the order.
- (d) The BPC’s power to issue rectification orders is discretionary. This means the BPC may decide not to issue a rectification order where it considers doing so would be unfair or unreasonable in the circumstances.
When can a rectification order be issued?
Subject to the BPC’s right to apply to the Victorian Civil and Administrative Tribunal (VCAT) for an extension of time, the BPC may issue a rectification order:
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(a) any time during construction; or
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(b) up to 10 years after the following events in relation to building work:
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(i) the issue of a certificate of final inspection in accordance with section 38 of the Building Act 1993 (Vic) (Building Act);
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(ii) the issue of an occupancy permit under Division 3 of Part 4 of the Building Act; or
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(iii) the date of practical completion.
This marks a major departure from the BPC’s current enforcement powers, under which rectification orders can only be issued prior to the granting of an occupancy permit.
A claim from a homeowner to the BPC under the 'First Resort Home Warranty Scheme' will be an additional trigger for the issuance of a rectification order.
When determining whether to issue a rectification order, the BPC may consider:
- (a) the terms of any contract for the carrying out of the building work (including warranties included in the contract);
- (b) any decision of another person who inspected the building work and who the BPC considers is qualified to carry out the inspection;
- (c) any direction to fix building work given in relation to the building work that is the subject of the proposed order;
- (d) any emergency order or building order made under Part 8 of the Building Act in relation to the building work that is the subject of the proposed order;
- (e) any undertaking given under section 234B of the Building Act in relation to the building work that is the subject of the proposed order; or
- (f) any other matter the BPC considers relevant.
What happens if a rectification order isn't followed?
Non-compliance with a rectification order for a class 1 building (1-3 storeys):
- (a) constitutes an offence;
- (b) is grounds for immediate suspension of a building practitioner’s registration; and
- (c) may result in the BPC issuing a rectification costs order to recover costs associated with monitoring and enforcing the order.
If a rectification order is not complied with during the construction of a class 2 building (4+ storeys), the BPC can prevent the developer from:
- (a) registering a plan of subdivision; or
- (b) obtaining an occupancy permit.
What are the proposed Regulations?
The Regulations contain three key regulations that are intended to complement the rectification order powers outlined in the Act.
- (a) Regulation 5 requires any conditions placed on a rectification order by the BPC to be contained in the rectification order itself. This Regulation is intended to ensure clarity and prevent confusion or disputes by consolidating all relevant information in one place.
- (b) Regulations 6 and 7 require the BPC to include information of any rectification orders issued to a registered building practitioner, and to publish such rectification orders online. These Regulations aim to promote transparency and ensure that consumers can make an informed decision when choosing a builder or developer.
Other
The Act also sets out:
- (a) the prescribed content of a rectification order;
- (b) instances where additional time may be granted for a recipient to comply with a rectification order;
- (c) notice requirements of the BPC issuing a rectification order;
- (d) the issuance and recovery of a BPC rectification costs order;
- (e) circumstances in which the Registrar of Titles must record a rectification order on title when the BPC identifies a ‘serious defect’ in certain residential apartment buildings; and
- (f) avenues for persons to apply to VCAT for review of a BPC decision relating to rectification orders.
Please get in touch with Kyle Gillan, Mark McKinley, Brandon Dewar, Daniel Amicucci or a member of our Property & Development team if you have any queries.
Please note that this article analyses the draft Regulations based on the exposure drafts, which remain subject to change. Russell Kennedy will continue to monitor the draft Regulations.
Please also refer our earlier eAlert, which examined the buyer protection reforms introduced by the Act.
This article is the third and final in a series that examines the three separate draft Regulations related to the Act which were released for public consultation on 18 December 2025 and recently closed on 1 February 2026. These Regulations will give practical effect to the Act when it is expected to come into force on 1 July 2026.
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