The DBDRV: A New Way To Solve Building Defect Disputes?

THE DBDRV – A NEW WAY TO SOLVE BUILDING DISPUTES?

strata manager owners corporation melbourneIn April 2017, the Domestic Building Dispute Resolution Victoria (DBDRV) was established by the Victorian government.

A business unit of the Department of Justice and Regulation, the DBDRV was established as an independent government agency to assist with the resolution of domestic building disputes.

The service is free to building owners – such as an Owners Corporation – and builders and acts as a tailored dispute resolution service.

PLEASE NOTE: Since launching, the DBDRV has been inundated with numerous claims and as a result warns applicants that lengthy delays should be expected in the initial assessment of your application.

Most disputes between building owners and builders will need to pass through the DBDRV before they can proceed to VCAT.

There are two exceptions to this rule which apply if:

  • You lodged your dispute with Building Advice and Conciliation Victoria (BACV) prior to 26 April 2017.
  • You need to apply for an injunction to immediately stop the other party from doing something, or make the other party do something immediately.

While the body is relatively new, it has already become a key cog in the state’s dispute resolution process for domestic building disputes.

However, to access the service, the party bringing the dispute to the DBDRV must have made some efforts to resolve the issue directly with the other party.

So, what does this mean for Owners Corporations and lot owners within them?

The DBDRV is a free service, making it an attractive one for owners and Owners Corporations alike, but its use still requires careful planning and consideration.

Below, Strata Plan will explain the basics of the DBDRV and how you and your Owners Corporation should consider using the service to your benefit.

WHAT DISPUTES CAN THE DBDRV CONSIDER?

The DBDRV can only be used to consider disputes surrounding domestic building work.

This can include, but is not limited to:

  • defective or incomplete building work
  • delays to building work
  • issues with payment
  • other matters arising from a domestic building contract

The DBDRV does not charge a fee for its service.

The following may be eligible to use the DBDRV’s dispute resolution service:

  • builder
  • building owner
  • architect or
  • sub-contractor

Both private lot owners and Owners Corporations can raise issues.

For instance, if you are concerned about or suspect there is defective or incomplete building work inside your private lot, then you could potentially use this service as a private owner.

If you suspect there is defective or incomplete work within the common property, then it is your Owners Corporation that would need to raise the dispute. If this is the case, then you will need to raise this with your Owners Corporation committee via Strata Plan for discussion at the next committee meeting or Annual General Meeting.

I BELIEVE MY BUILDING HAS DEFECTS, CAN I GO STRAIGHT TO THE DBDRV?

If you’ve seen a leak in the basement or you think there might be an issue with your common areas, hold your horses, it’s not time to run to the DBDRV yet.

Of course, before you do anything, it would be wise to investigate whether or not the issues you are facing are in fact building defects.

Often, issues appear due to a lack of maintenance, user error or simple wear and tear as a building’s various assets are used and placed under increasing strain.

Before any issues can be taken to the DBDRV, reasonable steps must have been taken to resolve the conflict directly with the other party.

That means you and/or your Owners Corporation will need to correspond with the builder, bringing your issues to their attention.

The DBDRV lists the following as constituting reasonable steps:

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

The website also has a handy guide to resolving disputes with the other party which notably includes, amongst other things, the need to have calm discussion rather than heated arguments in which demands are made of the other party.

For the DBDRV’s three-step guide to resolving your dispute, go HERE.

If you and/or your Owners Corporation believe you have made reasonable attempts to resolve the dispute and that your dispute relates to defective or incomplete building work, delays to building work or another issue matter arising from a domestic building contract, then you can lodge your application online.

Please note that if your concerns relate to common property, then an application should be made by your Owners Corporation.

It’s important that you speak to your Owners Corporation manager or committee to discuss how this issue should be raised and find out if your fellow owners are happy to go down the dispute resolution path.

If your dispute relates to private property, you may lodge your own application in your own name.

LODGING AN APPLICATION

There is a wealth of information you and/or your Owners Corporation will need to fill out the DBDRV’s application form.

First of all, you will need to prove your dispute is eligible for the service via a quick questionnaire, as seen below.

Your answers to these questions will determine whether you are able to move to the next step and fill out the application form.

If you are eligible, you will need to fill out a five-stage form. The steps are shown below.

The chunk of your application will be filled out in the first step, “Dispute Details”.

You will need your building address, details of your last correspondence with the other party, a copy of your occupancy permit or a certificate of final inspection, a copy of your contract, as well as being able to clearly identify what the dispute is about.

The full form can be seen below (PLEASE NOTE: This form will expand and ask for further details depending on your answers).

Next up is your contact details:

Next, you’ll need to input the details of the other party. The DBDRV will not contact the other party without attempting to speak to you first. If they can’t get to you, then they may contact the other party first. See below:

Once the application is sent in, you will receive a reference number and confirmation email.

Your application will be subject to a Jurisdiction Check, in which a DBDRV Dispute Resolution Officer will evaluate whether or not their service covers your dispute. They may contact you for further information if they have doubts.

If your dispute is not covered by their service, then you will receive a recommendation on where else you can take the issue.

If your application if accepted it will progress to the next stage.

NEXT STEPS

Congratulations! If you’ve made it this far, your application is up for an Initial Assessment, to be performed by a DBDRV Dispute Resolution Officer.

Once your application has been assigned to an Officer, they will assess your dispute against Section 45C(3) of the Domestic Building Contracts Act 1995.

Your Officer will also consider the likelihood that conciliation can help resolve the dispute.

After this, your application will be accepted for conciliation or rejected.

If the application is rejected you will be contacted by your Officer who will explain why it was rejected and your other options.

If accepted, the dispute will move towards conciliation.

As part of this process and in preparation for your conciliation conference, you may be asked to provide the following:

  • your domestic building contract or agreement, and associated plans and specifications
  • architectural and/or engineering drawings
  • the building permit and plans
  • records of any inspections undertaken by a building surveyor
  • variation requests
  • extension of time requests
  • correspondence with the other party relevant to your dispute
  • your occupancy permit (for newly built homes) or your certificate of final inspection (for renovations).

A building assessment will also be carried out as part of this process with the aim of doing final investigations as to whether the works in question are defective or incomplete.

You will be advised of the time and place for your conciliation conference, which all affected parties must attend.

Your conciliator will:

  • facilitate the conciliation conference
  • encourage understanding and communication between the parties, and
  • listen to the parties and help them come up with ways to resolve the dispute.

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

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

OUTCOMES

At the end of this process – which could take anywhere between six and 12 months to complete – you may achieve the following outcomes.

Agreement

If both parties come to an agreement, this will be documented in a formal record of agreement.

This will include the agreed actions of all parties, along with the dates these actions should be completed by.

Dispute Resolution Order

If an agreement can’t be made, the DBDRV’s Chief Dispute Resolution Officer may issue a binding Dispute resolution against one or both parties.

These can be issued against building owners which may direct them to:

  • pay money to the builder for the completion of building work by a specified date
  • pay money into the Domestic Building Dispute Resolution Victoria Trust Fund, to be held until the defective or incomplete building work is fixed or completed
  • refrain from doing anything that would stop the builder from complying with the contract or their warranty obligations.

They can also be issued against a builder and direct them to:

  • rectify defective building work by a specified date
  • complete the building work in accordance with the contract by a specified date
  • rectify any damage, caused as a result of carrying out the building work, by a specified date
  • pay for the reasonable cost of another builder to rectify or complete the building work (if the building work is too defective to allow them to continue)
  • arrange for the building work to be carried out by a registered builder (if the building work in dispute should have been carried out by a registered builder) by a specified date.

Certificate of Conciliation

If the dispute cannot be resolved and no binding order can be issued, the DBDRV may issue a certificate of conciliation (dispute not resolved). The parties will then be entitled to make an application to VCAT, if they wish.

Learn more about all possible outcomes HERE.

FINAL THOUGHTS

This free process is a great avenue for owners and/or their Owners Corporations to seek conciliation with their builders.

The advantages of the DBDRV is that it is a free service and has the power to hand down binding options, however the length of time involved can make it a frustrating process with no guarantee of a favourable result.

As always, the most efficient route to solve any outstanding building issues is always to properly investigate the issues with your building and seek a resolution directly with the other party.

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