Part 2. Three More Victorian Building Reforms Are Coming Before Christmas. Here’s What Developers Need to Know.
In Part 1 of this series, we covered the Security of Payment reforms that took effect on 15 April 2026. Those changes are already in force and apply broadly across active construction projects in Victoria, subject to transitional provisions. But they are only part of the story.
Alongside the Fairer Payments Act, further building reform packages legislated in 2025 are scheduled to commence progressively through 2026. In addition, the Building and Plumbing Administration and Enforcement Bill 2026, intended to become a new principal Act for the administration and enforcement of building and plumbing legislation, has now passed Parliament. Developers and builders who are focused only on the SOP Act changes risk missing what is still to come.
Other amendments noted in the Fairer Payments Act
The Fairer Payments Act also makes amendments beyond the SOP Act. The summary below highlights areas that may be relevant to major projects, but the enacted text and any supporting regulations should be checked carefully before relying on them in practice.
Under the Planning and Environment Act 1987, enforcement-related amendments may affect the remedies available in planning disputes, including in matters involving native vegetation. Developers on sites with native vegetation should review the contractual allocation of vegetation risk between principal and civil contractor carefully.
Under the Environment Effects Act 1978, amendments contemplate a cost recovery framework in connection with environment effects assessment processes, with important operational detail to be set by regulation. Major project feasibilities should monitor that position closely.
Under the Heritage Act 2017, amendments appear to narrow the relevance of emissions reduction targets in some heritage decision-making contexts. Parties making submissions on heritage matters should check the operative provisions closely and focus on the statutory decision criteria that remain applicable.
What is still coming in 2026
1 July 2026: Buyer Protections Act commences
The Building Legislation Amendment (Buyer Protections) Act 2025 (Vic) introduces two reforms of direct concern for residential developers.
The Developer Bond Scheme requires developers of apartment buildings of more than three storeys to lodge a bond equal to 2% of the total build cost with the Building and Plumbing Commission (BPC) before applying for an occupancy permit. The bond is held for two years post-occupancy and is available to fund defect rectification. The Act itself contains no transitional exemption, although the draft Building (Developer Bonds) Regulations 2025 propose to exempt projects whose building permit was issued before 1 July 2027. The draft regulations are not yet in force and are subject to consultation, so projects relying on that exemption should treat it as provisional. On the face of the Act, projects currently under construction will be caught if the occupancy permit is sought after 1 July 2026, and feasibilities and capital structures should be updated now.
The Statutory Insurance Scheme (SIS) replaces the existing domestic building insurance framework for residential buildings of three storeys or less with a contract value of $20,000 or more. Homeowners will be able to claim under the SIS as soon as loss is suffered from incomplete, defective or non-compliant building work, without waiting for a builder insolvency event.
The BPC also gains new Building Rectification Order powers against both builders and developers. Those powers are significant and may extend well beyond project completion, but their precise temporal reach, including any retrospective operation, should be checked carefully against the Act and commencement provisions. Completion risk on apartment projects will therefore need to be reassessed with those powers firmly in mind.
1 December 2026: Domestic Building Contracts reforms commence
The Domestic Building Contracts Amendment Act 2025 (Vic) has passed the Victorian Parliament and is expected to commence on 1 December 2026. It overhauls the regulatory framework governing domestic building contracts, introducing greater regulatory oversight, stricter contract content requirements and increased financial accountability for developers and builders in the domestic building space. Supporting regulations are still to be published.
Passed Parliament: A new principal Act
The Building and Plumbing Administration and Enforcement Bill 2026 has passed the Victorian Parliament. The Government’s stated intention is that the new Act will commence on 1 July 2027, with a long-stop commencement of 1 December 2027 if not proclaimed earlier. Once in force, it is expected to establish a new system objective focused on the health and safety of building occupants, broaden the scope of infringement and improvement notice powers, and create new civil penalties, including an expanded ability to hold directors personally liable for the most serious contraventions.
What to do now
- Audit every active contract. Review performance security provisions, payment terms and time bar clauses against the new SOP Act regime.
- Update contract templates. Standard form contracts, including special conditions to AS 4000, AS 4902 and AS 4300, need to be reviewed against the new payment period caps and the section 17H notice mechanism.
- Reassess feasibilities for apartment projects completing after 1 July 2026. Any project of more than three storeys with an occupancy permit application date after 1 July 2026 should be updated for the developer bond (2% of total build cost) and its implications for capital structure and senior debt.
- Review defect rectification frameworks. The developer bond, the potential 10-year rectification order exposure and the new SOP Act provisions dealing with performance security and final payment claims all require defect frameworks under construction contracts to be revisited.
- Watch the regulations. Much of the operational detail of the developer bond scheme, the SIS and the cost recovery framework will be settled by regulation over the next 12 months.
The Victorian Government’s direction is consistent across all three packages: tighter controls, stronger enforcement and accountability at each stage of a project. That window is narrowing. The developers who move now will find the next 18 months considerably more manageable than those who wait to see what the litigation tells them.
For advice on how any of these reforms apply to your contracts, projects or portfolio, contact Jeremy Quah or a member of the Building and Construction team at Tisher Liner FC Law.
This article is intended as general information current as at 11 May 2026 and does not constitute legal advice. Specific legal advice should be obtained in relation to any particular matter.
