Pitfalls of relying on a Certificate of Occupancy for Building Compliance
Many new home buyers, rely solely on a Certificate of Occupancy, thinking that a new home is compliant to the Building Codes. They’ve been either told by their Builder, or Estate Agent, that all work is complete, and its generally what the Banks rely on when making final payment, or settlement, on behalf of their client. Home buyer should wary at solely relying on this, as they may be well surprised to learn the loop hole that exists, which unfortunately may be the start to many years of frustration dealing with building defects.
The Building Act 1993 regulates building work in Victoria, which requires mandatory compliance for building work to comply with a building Permit. The Building Regulations 2018 in schedule 3 sets out exceptions that may apply to certain types of building work, and further requires that Building work for residential homes, (dwellings, typically houses and units), must comply with the National Construction Code – Volume 2 , Building Code of Australia – (BCA). The compliance requirements imposed by the Code, to the construction of new homes or unit is quite extensive, as it also requires compliance to many Australian Standards, which are called upon by the Building Code.
A Building Permit, under the Act, requires an Occupancy Permit for all new homes or town houses. In the case of building work which is an extension to an existing house, then a Final Inspection is required, as a Certificate of Occupancy should be in force. Other associated building works to a house such as a garage, pools, and/or deck attached to a house, etc will require a final inspection, as a condition of the Building Permit.
Despite the requirement for building work to be compliant, by the legislation, (law), imposed by a requiring a Building permit, here’s where homebuyers reliance on the legislation is now let down, where the Building Act states :-
Section 46 Effect of occupancy permit
(1) An occupancy permit under this Division is evidence that the building or part of a building to which it applies is suitable for occupation.
(2) An occupancy permit under this Division is not evidence that the building or part of a building to which it applies complies with this Act or the building regulations.
An Occupancy Permit, simply acknowledges that the home is habitable, i.e. liveable, as defined by the Act. To enforce compliance, after this stage, may mean frustrating, and lengthy battles to have building defects rectified, as many builders struggle to make the commitment to rectify defects properly, providing the owner knows that a defect may exist. Sadly, many people are completely unaware that some non-compliance, may actually develop into major defective building work, such as footing movement, (as building crack, and floor levels deviate), costing thousands of dollars to rectify, and furthermore may potentially devalue a family’s home. Failure to address defects, may result in a builder escaping accountability, as latent defects developed due to the negligence of the home owner.
We have a system, where registered Building Surveyors, and Building inspectors are overlooking compliance, while registered builders, hiring poorly trained staff and tradies, who simply get away with being unaware of what should have been done right in the first place. Now this simply does not even take into account where a builder “cuts corner”, to just to save money, or deceptive conduct.
The Victorian and Federal governments are investigating building compliance, where it’s become a serious problem, that ordinary home owners are becoming the victims of poor building practices.
The only way to ensure that building work is firstly done in a proper workmanlike manner and is compliant is to have an Independent Building Inspection done by a person who is suitably qualified, who acts on your behalf. This means someone with a qualification such as Building Surveying Diploma, or an Advanced Diploma of Building Surveying, (the minimum qualification to be registered as a Building Surveyor Limited by the VBA). This MUST be backed by experience to provide an inspection service. If someone want to disclose their qualifications, (or advertise it on their Website) or simply just done a Certificate IV in Building Construction, then please keep looking, as you’ll have no idea, as to whether they’re committed to protecting your interests, and are suitably qualified.
Fighting a building defect’s claim can become expensive by pursuing a matter through VCAT, so you’ll want strong evidence to address your concerns, before you hand over your last payment. Its not about an inspector’s opinion, it’s all about getting referenced opinion against mandatory Building Codes, and building industry literature that backed by a comprehensive report by your Independent Inspector, as to whether building work is of a poor standard, or non-compliant.
Homebuyers should carefully choose who they choose to engage, as many Inspections companies who hire contract inspectors, act as booking agents, compared to you dealing direct with your Independent Building Inspector. You may be left with no idea of who they intend to use, as its just a booking for them, so I recommend you talk to your inspector directly, before you proceed.
Author Stan Radevic
Residential Building Inspections
 Australian Building Codes Board, National Construction Code – Volume 2, 2018 (Building Code of Australia), Canberra, ACT,
 Victorian Civil and Administrative Tribunal, Domestic Building List, Victoria