Building Advice and Conciliation Victoria Annual Activities Report

Transcription

1 Building Advice and Conciliation Victoria Annual Activities Report Building Advice and Conciliation Victoria ( BACV) is a joint service provided by Consumer Affairs Victoria and the Building Commission

2 joint ministers introduction > Every year thousands of Victorians build or renovate their homes. A small number of these people encounter difficulties resolving disputes or issues that can arise under the domestic building contract. Building Advice and Conciliation Victoria (BACV), a joint service delivered by Consumer Affairs Victoria and the Building Commission, was set up by the Victorian Government in July 2002 to help home-owners and builders resolve disputes. Since its inception BACV has provided a one-stop-shop for consumers and builders providing free advice and assistance to resolve domestic building disputes. BACV has provided home-owners and builders with access to: > advice relating to contractual and technical issues > independent technical inspections of building work > professional conciliation. Homeowners and builders engaged in voluntary dispute resolution with BACV can often mitigate the need to enter into lengthy and sometimes costly legal intervention, or seek action through the Victorian Civil and Administrative Tribunal (VCAT). VCAT is an independent tribunal which can resolve disputes where parties have been unable to resolve their disputes with the assistance of BACV. Consumers and building practitioners can be confident in the independent protection provided by BACV and the regulated building standards and quality that BACV supports. Marsha Thomson Minister for Consumer Affairs Rob Hulls Minister for Planning 02

3 contents > joint introduction contents key highlights conciliation inspection enforcement vcat dispute reduction BACV helping Victorians resolve issues or disputes that may arise when building and renovating > BACV Annual Activities Report

4 highlights > Key highlights in last 12 months Over the last 12 months, BACV received 20,120 phone calls from domestic building clients. Given that most consumers are not well informed about building matters and that there were 93,153 domestic and residential building permits issued in , the number of enquiries is considered to be a positive reflection of both the building industry and consumers. BACV provided 92% of clients who called the enquiry line with information that enabled them to quickly proceed with their domestic building project. Written complaints to BACV represent only 8% of the total number of calls made to the enquiry line. This small percentage of Victorians engaged in domestic building had their cases assessed for voluntary dispute resolution through the assistance of a BACV conciliator. As part of this process, some cases were provided with a technical building inspection to resolve allegations of substandard workmanship. Cases indicating a breach of laws and regulations became the focus of a number of investigations and enforcement actions to address illegal activities and maintain appropriate industry standards. BACV was successful in helping the vast majority of callers solve their domestic building issues. Cases that go to Victorian Civil and Administrative Tribunal (VCAT) represent only 1% of calls made to the enquiry line. Over the last financial year, BACV also took a range of proactive steps to reduce domestic building disputes in the community. Sets of publications were developed and disseminated to consumers and builders. Websites were developed to provide online information and links to organisations that provide expert advice on the domestic building experience. In excess of 20 presentations were made by BACV staff to consumer and industry forums. Exhibitions providing opportunities to consult with staff were held at major home shows. A program of meetings between BACV staff and representatives from larger building companies commenced, where parties worked together on ways to reduce calls to BACV through improved in-house complaint handling and dispute resolution systems. BACV assisted the consumers and builders by responding to: > 20,120 telephone enquiries on the BACV enquiry line > 3,400 technical telephone enquiries > written complaints of 1,634 matters received from clients > conducted 1,376 conciliations > carried out 129 building defect inspections > developed and disseminated over 300,000 copies of publications to educate consumers and building practitioners > delivered more than 20 presentations about dispute reduction measures at a range of consumer and industry forums. 04

5 What is the BACV enquiry service? The BACV telephone enquiry service assists consumers, builders and other domestic industry participants by providing timely contractual and technical advice or referring clients to other organisations with more appropriate expertise. What happened over the last 12 months? Comparison enquiries BACV enquiry staff provided 92% of callers with the information they needed to address their concerns. These clients did not need to access the BACV conciliation service, so it may be assumed that the BACV enquiries service helped them to quickly proceed with their domestic building project. Only 8% of callers required further assistance from a BACV counciliator. 2,500 2,000 1,500 1, During the last 12 months the BACV enquiry service: > responded to 20,120 telephone enquiries > increased responses to telephone enquiries by 33% from the figure of 15,500. This increase may be due to greater awareness of the BACV service, increased number of dwellings, and reduced involvement from the domestic building (warranty) insurers. Information and advice was provided about a wide variety of contractual issues with 180 clients benefiting from the Building Commission s expert technical advice MTH J A S O N D J F M A M J Consumer comment We would not have resolved our dispute with the tiling contractor without the help and advice given by your enquiry staff. We sincerely thank you for a great service! BACV Annual Activities Report

6 conciliation > What is BACV conciliation? The independent BACV dispute resolution service enables disputing parties to voluntarily negotiate agreeable and achievable outcomes. Written complaints are assessed and, in appropriate cases, a BACV conciliator will work with both parties to gain resolution. Written complaints received by conciliators usually come from consumers who are dissatisfied with: > the delivery of goods or services included in their major domestic contract > variations to their major domestic building contract > deposits, staged payments and prices > the quality of the builder s work. When there are allegations of defective work that can be resolved through conciliation, a building inspection may be performed. The independent inspection report often helps to resolve the dispute. Some conciliation cases reveal issues that require investigation for breaches of laws and regulations. These investigations assist in maintaining appropriate industry standards. Consumer: case study On completion of a six-month renovation that cost $69,070, an unhappy consumer wrote to his builder with a list of alleged defects. When the builder disagreed with the list, the owner complained to BACV. A BACV conciliator discussed each issue with the builder who then decided to return to the property and rectify all faults within an agreed timeframe. BACV helped both parties resolve their dispute quickly, without the need for an independent inspection or a VCAT hearing. 06

7 BACV written complaints received QTY Consumer comment All the small things that were wrong still after we moved into the house are now all fixed. Danielle can now have access to every part of the house in her wheelchair, partly due to your great help in those worrying days. 000 MTH J A S O N D J F M A M J What happened over the last 12 months? Written complaints represent 8% of calls made to the enquiry line. Of those 60% were resolved, 39% were referred to more appropriate bodies or were withdrawn and 1% went to VCAT. Over the last 12 months the BACV conciliation service: > responded to over 1,634 written complaints, a 40% increase from the figure of 1,198 > conciliated 1,376 matters, a 15% increase from the figure of 1,193 > conciliated 35 matters after the presentation of the building defects inspection report to the parties > provided some parties with advice on more appropriate avenues for handling their particular problem. Builder: case study BACV received a written complaint from a builder whose clients refused to make their final payment. The homeowners also made a written complaint explaining they were withholding payment due to alleged problems with plastering in the original part of the extended home. A BACV conciliator examined the major domestic building contract and discovered that re-plastering parts of the original home was not included in the contract. The conciliator explained this to the homeowners who accepted this work as an additional cost to them and immediately paid the builder the almost $13,000 he was owed. BACV Annual Activities Report

8 inspection > What is a BACV inspection? BACV provides a free domestic inspection service for eligible clients in relation to defective building work in dispute, where there is a reasonable chance of resolution. Eligible clients are those with domestic building contracts from 1 July 2002 who have been unable to resolve disputes. For contracts entered into prior to 1 July 2002, or for those clients who are not eligible to receive a free inspection report, an alternative inspection service is provided at a cost of $300. What has happened over the last 12 months? Cumulative all inspections completed QTY BACV free inspections: > BACV inspected 77 buildings for defective work, a substantial increase from the figure of 12 > inspection reports assisted 35 parties to resolve their disputes without the parties needing to refer the matter to VCAT or other agencies. BACV paid inspections: > BACV inspected 52 buildings for defective work, similar to the figure of 50 > some parties presented inspection reports at VCAT proceedings MTH J A S O N D J F M A M J Consumer comment Your inspector s report was correct. I want you to know we are very grateful for the help and advice received from you and your team. Thank you very much. 08

9 Builder comment My client and I decided to rely on the defect inspection report. The outcome was not entirely favourable but we accept the umpire s decision and will carry out the recommendations of the report. Consumer: case study A consumer complained to BACV that her builder refused to complete maintenance works under the major domestic building contract. The builder acknowledged some outstanding works but strongly denied these included any major defects, claiming the homeowner had unreasonable expectations. BACV suggested the option of an independent inspection report. Both parties were keen on this approach. The builder gave an unconditional offer to complete any works required as a result of the inspection report. As part of this agreement, the builder also wanted the consumer to waive their rights to any further claims under the maintenance period. BACV argued this was not possible and the builder agreed to drop this request. The inspection report identified some defective works which were initially fixed by the builder s contractor, however these repairs did not meet the standard expected. BACV discussed the quality of the work with the builder who immediately fixed all work to the standard required. BACV Annual Activities Report

10 enforcement > What is enforcement? The Building Commission and Consumer Affairs Victoria may investigate building practitioners as a result of written complaints received by BACV. These investigations relate to breaches of regulations or statutory obligations, conduct of registered practitioners and non-compliance with the Building Act 1993, the Domestic Building Contracts Act 1995, and Fair Trading Act Enforcement activities generally relate to domestic building traders who: > misrepresent their goods, services or qualifications to consumers > use substitute products > fail to supply goods or services > are unregistered > lack appropriate domestic building (warranty) insurance > fail to enter into or supply a legal written contract > demand excessive deposits and payments > demand payments in advance > fail to place variations in writing > do not comply with current building regulations and industry standards Builders and other practitioners who refuse to rectify defective works or carry out their responsibilities under the domestic building contract may be referred to the Building Practitioners Board for possible disciplinary action. This could include a fine, suspension and/or deregistration. What has happened over the last 12 months? BACV enforcements carried out during include: > 99 investigations > 70 prosecutions > 102 proactive performance audits of the work of registered domestic builders > 35 site audit inspections. Uninsured and unregistered builders were prosecuted for failing to supply goods, demanding excessive deposits and carrying out defective and incomplete work. Investigations in areas of cabinet making for supply of kitchens and bathrooms, concreting, paving, roofing and general exploitation of consumers, will provided evidence for prosecutions during the next financial year. 10

11 Builders and other practitioners who refuse to rectify defective works or carry out their responsibilities under the domestic building contract may be referred to the Building Practitioners Board for possible disciplinary action. Magistrates Court Case In September 2003 a magistrate imposed a record fine of $270,000 plus costs on an unregistered, uninsured builder. The magistrate described the convicted man as a rogue who had destroyed his victims dreams of homeownership. One consumer paid the man to complete her house to lock up stage and was left with nothing but a slab and a rotting frame. Others were left with major building defects. None of the consumers had any chance of recovery through insurance, as their illegal major domestic building contracts issued by the builder referred to fake policies and fake registration details. The magistrate believed the man s behavior had set his victims back financially and emotionally for the rest of their lives and could not be tolerated in the community. This case demonstrates the need for consumers to only engage registered building practitioners. BACV Annual Activities Report

12 victorian civil and administrative tribunal (vcat) > What is the VCAT process? VCAT is an independent tribunal which resolves domestic building disputes among home owners, builders, insurers, architects and others. VCAT complements BACV, as VCAT may make orders ending disputes which were unable to be resolved with the assistance of BACV. Parties in dispute can choose to apply directly to VCAT without using the BACV process. The first step in this process usually involves mediation followed by a compulsory conference and in a minority of cases a full hearing. Small claims cases involve disputed amounts of less than $10,000 and are generally heard at VCAT s Civil Claims List. Most cases are referred directly to a final hearing within 2 months. Standard cases involve disputed amounts of more than $10,000 and less than $100,000 and are generally heard at VCAT s Domestic Building List. Most cases are referred directly to a mediation where approximately 65% are resolved. The remainder usually proceed to hearing, unless settled beforehand, and can take nine months or more to resolve. Complex cases involve disputed amounts of more than $100,000 and are generally heard at VCAT s Domestic Building List. Most cases take more than nine months to resolve, unless settled at mediation or compulsory conference prior to or during the hearing. More information about VCAT may be found at 12

13 Consumer comment Our issues regarding our new home have been resolved with the builder. We would like to thank you for all your assistance in this matter. Your team was impressive in handling this matter. What has happened over the last 12 months? VCAT: > received 1,900 domestic building applications > finalised 2000 applications Domestic building list: > received 839 cases, a decrease of 3% from the figure of 866 > mediated 66% of cases, compared with 58% for some cases are referred to compulsory conference, while others are withdrawn less than 10% of disputes go to hearing > finalised 847 cases, a decrease of 1% from the figure of 859. Civil claims list: > received 1,026 cases > finalised 1,122 cases. BACV Annual Activities Report

14 dispute reduction > What is BACV dispute reduction? BACV dispute reduction aims to minimise building disputes through the education of consumers and building practitioners. Complaint data and other research helps to target education activities in areas of need for the industry and homeowners. Information distributed widely throughout the community covers: > rights and responsibilities of consumers and builders > steps in avoiding disputes > useful expert contacts and > positive steps for handling disputes. Partnerships have been formed with many Government, community and commercial organisations associated with domestic building consumers. These partners are pleased to pass on publications or include BACV staff in their presentations to clients. Dissemination of information early in the building process gives homeowners ample time to read about, understand and plan for a realistic and successful home building experience. What has happened over the last 12 months? Publications A range of publications have been developed to inform consumers and building practitioners about BACV and provide information they need to successfully manage a home building transaction. Over 300,000 copies of publications have been distributed to assist consumers and building practitioners to make informed decisions. Websites Two websites provide current information about the BACV service: > and > Both have appropriate links to other relevant organisations, access to key items of legislation and the ability to download publications. 14

15 Dissemination of information early in the building process gives homeowners ample time to read about, understand and plan for a realistic and successful home building experience. Presentations A range of industry bodies and consumer groups have benefited from presentations by BACV staff to increase awareness of BACV and industry guidelines. Meetings BACV staff have met with several building companies and a range of practitioners to raise their awareness of BACV. Initiatives were also discussed for educating consumers and improving internal complaint handling and dispute resolution services. Strategic projects A voluntary Continuing Professional Development program for building practitioners was introduced in March 2004 that will ultimately reduce building disputes. Builders will be more aware of their changing obligations and consumer sensitivities. An awareness campaign commenced in to encourage consumers to use registered building practitioners. In the long-term, this should result in less disputes because consumers will be more likely to choose registered builders who work to regulated standards and who are more accountable. VETRO DESIGN 1196 BACV Annual Activities Report

16 CONTACT US Building Advice and Conciliation Victoria Level 3 / 452 Flinders Street MELBOURNE VIC 3000 TEL