Domestic Building Disputes

Have I got a domestic building dispute?

Disputes over building contracts are on the rise.

For homeowners and house purchasers, disputes can leave them arguing with a builder who has done a poor job. Disputes also arise where the building of the home or completion of the work seems like it will never be finished.

For builders, payment disputes can arise for work completed a long time ago.

Resolving domestic building disputes can be difficult. However, in Victoria there are a number of options open parties to try and resolve these disputes.

Resolving a dispute: What are my options?

Option 1: Resolving the dispute yourself.

In Victoria many domestic building disputes are resolved by the parties themselves, through negotiating an outcome that is satisfactory to each side.

If you feel comfortable, the first thing you should consider doing is to try and resolve the dispute yourself.

You can try and resolve the problem by speaking directly to the other party.

If this does not work, consider sending them a letter or email, outlining the issue from your perspective and requesting a response. This type of written communication can be relied on later if you pursue your dispute further.

If you are trying to resolve the dispute yourself, you should consider:

• Keeping copies of all relevant documents (for example, contracts, invoices and written communications).
• Keeping a record of all conversations you have had with the other party, for example, write down what was said in a diary.
• Taking photos of the work that you are concerned about.

If you do not receive a response from the other party in a reasonable time frame or you are not happy with that response, you can choose to pursue a more formal procedure.

Option 2: Domestic Building Dispute Resolution Victoria (DBDRV)

In Victoria, the most common avenue for resolving domestic building disputes is through Domestic Building Dispute Resolution Victoria (DBDRV).

DBDRV is a free government service designed to help building owners and builders resolve their domestic (residential) building disputes.

Building owners, builders, sub-contractors, architects and other building practitioners such as surveyors, engineers and draftspersons are eligible to apply for dispute resolution through DBDRV.

Types of disputes dealt with through DBDRV include:

• Defective or incomplete building work
• Delays
• Issues with payment
• Issues about the domestic building contract

Importantly, before you access DBDRV you are required by law to have taken ‘reasonable steps’ to resolve the dispute independently. At a minimum, ‘reasonable steps’ include:

• Trying to contact the other party to raise your concerns, repeatedly if they did not respond.
• Engaging with the other party, if they are willing to do so, to try and resolve your issue; and
• Preferably advising the other party that you intend to lodge an application with DBDRV’s dispute resolution service.

There are also strict eligibility criteria for lodging a dispute with DBDRV. To be eligible for dispute resolution through DBDRV, the dispute must:

• Relate to more than one of the following types of work: plumbing, painting, plastering, tiling, insulating, glazing, concreting, installing floor coverings, electrical work, or fencing (that does not require a permit) where the work is not part of a contract which also covers other types of building works.
• Involve the building owner.
• Not be the subject of a previous or current VCAT proceeding (limited exceptions apply).
• Not relate to building work that is more than 10 years old.
• Concern domestic (residential) building work including construction, renovation, alteration, extension, demolition or home improvements of some kind.

If you are eligible to access DBDRV, you may submit an online application for dispute resolution through the DBDRV’s online portal. You will be required to submit your contact details, the other party’s details and details about the dispute.

A jurisdiction check will then be undertaken by a Dispute Resolution Officer (DRO), who will evaluate whether your dispute is covered by DBDRV.

The Officer will then undertake an initial assessment of your dispute to determine if it is suitable for conciliation.

If your application is accepted, all parties to the dispute will be required to attend a conciliation.  Conciliation is a dispute resolution process where all the parties in a dispute are brought together to try and resolve the matter. This discussion is facilitated by an independent conciliator.

Prior to conciliation, you may be asked to provide relevant documents pertaining to the dispute, such as building contracts, architectural drawings, extension of times requests or occupancy permits. As part of this process, a DBDRV building assessor may examine the building work in dispute. Assessors determine whether domestic building work is defective or incomplete. They may also specify the cause of a defect and a timeframe for any work required to rectify or complete the building work.

At the conciliation conference, one of the following outcomes may be achieved:

1. Agreement: If the parties resolve the dispute, this will be documented in a formal record of agreement. This record will contain the actions agreed to by the parties and relevant dates. It is the responsibility of the parties to honour the terms of the agreement

2. Dispute Resolution Order: If the parties either partially resolve their dispute or are unable to resolve their dispute, the Chief Dispute Resolution Officer may issue a binding Dispute resolution order against one or both parties. There are consequences for a party who does not comply with an order. 

3. Certificate of Conciliation: If the parties are unable to resolve their dispute at the conciliation conference, the Chief Dispute Resolution Officer may issue the parties with a certificate of conciliation. The parties will then be entitled to make an application to VCAT, if they wish.

If a party does not participate, DBDRV may do any of the following things in their absence:

• Appoint an assessor to conduct a building assessment of the domestic building work in dispute.
• Issue a dispute resolution order.
• Issue a certificate stating that you failed to participate in conciliation.

Option 3: Victorian Civil and Administrative Tribunal (VCAT) Application

As a last resort, you may choose to make an application to the Victorian Administrative and Civil Tribunal (VCAT).  While it is possible for you to lodge a claim in VCAT yourself, running a claim through VCAT can be a complicated and difficult process. You should seek legal advice prior to contemplating issuing a VCAT claim.

Importantly, with some limited exceptions, you cannot lodge an application with VCAT unless you have already attempted to resolve the dispute through DBDRV. On exception is where you need to apply for an injunction to immediately stop the other party from doing something, or make the other party do something immediately. You should seek legal advice if you believe that this exemption may apply to you.

Domestic building applications filed with the VCAT are generally referred to mediation (conducted by a mediator) or a compulsory conference (conducted by a VCAT member). If the parties are unable to resolve the building dispute at mediation or compulsory conference, then the matter will be referred to a hearing conducted by a VCAT member.

Whilst VCAT is not bound by the normal rules of evidence, the hearing is a formal process which is similar to a court hearing. Lawyers often appear before VCAT and the VCAT member has the power to make a final, binding decision. State courts have the power to enforce VCAT orders if they are not complied with.

Building disputes can be stressful, lengthy experiences. Fortunately, our team at Gordon Legal has extensive experience in dealing with these matters and would be happy to provide you with assistance.

If you think you may want to investigate your claim further, or have any questions about your domestic building dispute or the relevant dispute resolution processes, please contact us at our Melbourne office on (03) 9603 3000.