Ministerial Order: Domestic Building Insurance S98-03 (23 May 2003)

Victoria Government Gazette

SPECIAL

No. S 98 Friday 23 May 2003

By Authority. Victorian Government Printer

Building Act 1993

DOMESTIC BUILDING INSURANCE MINISTERIAL ORDER

I, Mary Delahunty, Minister for Planning make the following Order:

PART 1ÑINTRODUCTORY

1. Purposes of this Order

(1) This Order specifies the insurance that a builder is required to be covered by in

order to carry out or manage or arrange the carrying out of domestic building work

under a domestic building contract of a specified kind.

(2) This Order specifies the insurance that a person who constructs a building and to

whom section 137B of the Building Act 1993 applies is required to be covered by

before entering into a contract to sell that building.

2. Authorising provisions

This Order is made under sections 135, 137A and 137D of the Building Act 1993.

3. Commencement

This Order takes effect on 1 July 2003.

4. Revocation

The Domestic Building Insurance Ministerial Order made on 16 May 2002 and published

in the Government Gazette No. S82 dated 20 May 2002 is revoked.

5. Definitions

Schedule 1 defines terms for the purposes of this Order.

PART 2ÑDOMESTIC BUILDING CONTRACTS

6. To which contracts does this Part apply?

This Part applies to a domestic building contract in which the contract price for the carrying

out of domestic building work is more than $12,000 (an Òinsurable domestic building

contractÓ).

7. Required insurance

(1) Before entering into an insurable domestic building contract, a builder must ensure

thatÑ

(a) a policy is issued that complies with this Order (except Part 3); and

(b) the policy covers the building work to be carried out under the contract.

(2) A builder may enter into an insurable domestic building contract without

complying with subclause (1) if the contract contains a written condition thatÑ

(a) requires a policy that complies with this Order (except Part 3) and covers

the building work carried out under the contract to be issued before the

builder may enforce any provision of the contract; and

(b) requires the policy to be issued before any domestic building work is

carried out under the contract; and

contract before that policy is issued; and

(d) requires the builder to ensure that a copy of the policy is provided to the

building owner within 7 days after it is issued.

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8. Indemnity for loss

(1) The policy must indemnify the building owner in respect of loss or damage

resulting from non-completion of the domestic building work.

(2) The policy must also indemnify the building owner in respect of loss or damage

resulting from all or any of the following eventsÑ

(a) domestic building work that is defective;

(b) a breach of any warranty implied into the domestic building contract by

section 8 of the Domestic Building Contracts Act 1995;

domestic building contract;

(d) conduct by the builder in connection with the domestic building contract

that contravenes a trade practices provision.

(3) The policy may provide that the indemnity referred to in sub-clause (1) or (2) only

applies if the builder dies, becomes insolvent or disappears.

9. Additional insurance

(1) The policy must also indemnify the building owner in respect of loss of the deposit

(or any part of the deposit) or loss of any progress payment under the insurable

domestic building contract.

(2) The policy must also indemnify the building owner in respect of the costs of

alternative accommodation and removal and storage costs that are reasonably and

necessarily incurred subsequent to and as a result of any of the following eventsÑ

(a) the non-completion of the domestic building work;

(b) an event referred to in clause 8(2)(a) to (d).

(3) The policy may provide that the indemnity referred to in sub-clause (1) or (2) only

applies if the builder dies, becomes insolvent or disappears.

(4) Despite sub-clause (2), the policy may exclude or limit claims for loss referred to

in that sub-clause to the extent that the period of alternative accommodation or

storage exceeds 60 days, excluding any period or periods of delay attributable to

the insurer.

(5) Nothing in clauses 13 to 17 applies to permit a policy to limit or restrict the

indemnity required by this clause.

Note: The warranties referred to in clause 8(2)(b) are as followsÑ

(a) the builder warrants that the work will be carried out in a proper and

workmanlike manner and in accordance with the plans and specifications

set out in the contract;

(b) the builder warrants that all materials to be supplied by the builder for use

in the work will be good and suitable for the purpose for which they are

used and that, unless otherwise stated in the contract, those materials will

be new;

and will comply with, all laws and legal requirements including, without

limiting the generality of this warranty, the Building Act 1993 and the

regulations made under that Act;

(d) the builder warrants that the work will be carried out with reasonable care

and skill and will be completed by the date (or within the period) specified

by the contract;

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(e) the builder warrants that if the work consists of the erection or

construction of a home, or is work intended to renovate, alter, extend,

improve or repair a home to a stage suitable for occupation, the home will

be suitable for occupation at the time the work is completed;

(f) if the contract states the particular purpose for which the work is required,

or the result which the building owner wishes the work to achieve, so as

to show that the building owner relies on the builder's skill and judgment,

the builder warrants that the work and any material used in carrying out

the work will be reasonably fit for that purpose or will be of such a nature

and quality that they might reasonably be expected to achieve that result.

10. Policy to state that indemnity extends to acts or omissions of others

The policy must state that the indemnities referred to in clauses 8 and 9 include an

indemnity in respect of the acts or omissions of all persons who were contracted by the

builder to perform the domestic building work under the insurable domestic building

contract resulting in loss or damage of the kind referred to in clause 8 or 9.

11. To whom does the cover extend?

The required insurance cover in the policy must extendÑ

(a) to each person who becomes entitled to the benefit of any of the warranties

referred to in clause 8(2)(b); and

(b) to the owner for the time being of the building or land in respect of which the

domestic building work is or was being carried out.

12. Period of insurance

(1) The policy must provide the indemnities referred to in clauses 8 and 9 in relation

to non-structural defects in respect of loss or damage occurring during the period

commencing on the commencement day and ending not earlier than 2 years after

the earlier ofÑ

(a) the completion date of the domestic building work; and

(b) the date of termination of the relevant domestic building contract.

(2) The policy must provide the indemnities referred to in clauses 8 and 9 in respect

of all other loss or damage occurring during the period commencing on the

commencement day and ending not earlier than 6 years after the earlier ofÑ

(a) the completion date of the domestic building work; and

(b) the date of termination of the relevant domestic building contract.

13. Penalties for delay by builder

(1) The policy may exclude or limit claims under the policy for penalties, fines,

liquidated damages or other sums, if any of these relate to delay on the part of the

builder.

(2) Despite sub-clause (1), the policy must not exclude or limit any increase in

rectification costs caused by the effluxion of time.

14. Excessive payments to builder

The policy may exclude or limit claims under the policy for money paid to a builder that

exceeds the amounts that should have been paid to the builder in accordance with section

11 and (as the case requires) section 40(2) or section 40(3) or section 40(4) of the Domestic

Building Contracts Act 1995.

15. Builder dies, disappears etc. before work begins

(1) The policy may exclude or limit claims under the policy for non-completion of

building work if the death, insolvency or disappearance of the builder occurs

before the builder commences on the building site any domestic building work

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(other than the removal of vegetation) that requires the use of any tools or building

materials.

(2) An exclusion or limitation referred to in subclause (1) must be subject to a right of

the building owner to recoverÑ

(a) any money paid in relation to the domestic building contract; and

(b) all reasonable costs and expenses incurred by the building owner in

relation to the contract.

16. Claims by developers

(1) The policy may exclude or limit claims under the policy by a building owner who

is a developer for non-completion of building work.

(2) An exclusion or limitation under sub-clause (1) must not affect any rights under

the policy of any subsequent owner for the time being of the building or land in

respect of which the domestic building work is being carried out.

17. Maximum liability for non-completion claims

The policy may limit claims under the policy for non-completion of domestic building

work to an amount that is not more than 20% of the contract price under the insurable

domestic building contract.

PART 3ÑOWNER BUILDERS

18. To which contracts does this Part apply?

This Part applies to a contract of sale of a building (an Òinsurable contract of saleÓ) ifÑ

(a) section 137B of the Building Act 1993 applies to that contract; and

(b) domestic building work was carried out on that home before the sale; and

was carried out.

19. Required insurance

Before entering into an insurable contract of sale of a building, the owner builder must

ensure thatÑ

(a) a policy is issued that complies with this Order (except Part 2); and

(b) the policy covers the domestic building work on that building.

20. Indemnity for loss

(1) The policy must indemnify the purchaser under a contract of sale in respect of loss

or damage arising from a breach of any warranty implied into the contract by

section 137C of the Building Act 1993.

(2) The policy may provide that the indemnity referred to in sub-clause (1) only

applies if the owner builder (the ÒvendorÓ) dies, becomes insolvent or disappears.

(3) Despite sub-clause (1), the policy is not required to indemnify the purchaser in

respect of a warranty that all materials used in the building work were new to the

extent that any materials used were not new ifÑ

(a) the condition report required by section 137B(2)(a) of the Building Act

1993 states that the materials were not new; or

(b) it was apparent from the nature of the relevant building work that the

materials were not new.

Note: The warranties referred to in clause 20(1) are as followsÑ

(a) the vendor warrants that all domestic building work carried out in relation

to the construction by or on behalf of the vendor of the home was carried

out in a proper and workmanlike manner; and

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(b) the vendor warrants that all materials used in that domestic building work

were good and suitable for the purpose for which they were used and that,

unless otherwise stated in the contract, those materials were new; and

accordance with all laws and legal requirements, including, without

limiting the generality of this warranty, the Building Act 1993 and the

regulations made under that Act.

21. Additional insurance

(1) The policy must also indemnify the purchaser in respect of the costs of alternative

accommodation and removal and storage costs that are reasonably and necessarily

incurred subsequent to and as a result of a breach of any warranty referred to in

clause 20(1).

(2) The policy may provide that the indemnity referred to in sub-clause (1) only

applies if the builder dies, becomes insolvent or disappears.

(3) Despite sub-clause (1), the policy may exclude or limit claims for loss referred to

in that sub-clause to the extent that the period of alternative accommodation or

storage exceeds 60 days, excluding any period or periods of delay attributable to

the insurer.

(4) Nothing in clause 24 applies to permit a policy to limit or restrict the indemnity

required by this clause.

22. To whom does the cover extend?

The required insurance cover in the policy must extendÑ

(a) to each person who becomes entitled to the benefit of any of the warranties

referred to in clause 20(1); and

(b) to any person who is the successor in title to the purchaser; and

containing common property, the body corporate for that land or a building on that

land.

23. Period of insurance

(1) The policy must provide the indemnities referred to in clauses 20 and 21 in relation

to non-structural defects in respect of loss or damage occurring during the period

commencing on the date of the contract of sale and ending not earlier than 2 years

after the completion date for the domestic building work.

(2) The policy must provide the indemnities referred to in clauses 20 and 21 in respect

of all other loss or damage occurring during the period commencing on the date of

the contract of sale and ending not earlier than 6 years after the completion date

for the domestic building work.

24. Defects referred to in condition report

The policy may exclude or limit claims under the policy in respect of any defect or

incomplete domestic building work that is referred to in the report required to be provided

to a purchaser pursuant to section 137B of the Building Act 1993.

PART 4ÑADDITIONAL POLICY PROVISIONS

Division 1ÑMandatory Provisions

25. Purpose of this Division

This Division sets out provisions that a policy required under Part 2 or Part 3 must contain.

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26. Policy to comply with Order

The policy must contain a provision to the effect that the policy is issued in compliance

with this Order and if any term of the policy conflicts or is inconsistent with this Order then

the policy must be read and be enforceable as if it complies with this Order.

27. Insurer to accept findings of Tribunal

The policy must contain a provision to the effect that if the insurer has notice of the relevant

proceedings before the Tribunal, the insurer will accept as determinative of the issues any

finding made by the TribunalÑ

(a) as to whether any of the following events has occurredÑ

(i) the non-completion of domestic building work;

(ii) an event referred to in clause 8(2)(a) to (d);

(iii) a breach of warranty referred to in clause 20;

(iv) an event referred to in clause 9 or 21; and

(b) if so, as to the amount of loss or damage suffered by the building owner or

purchaser, as the case may be, as a result of the event or events.

28. Restrictions on avoidance of policy

(1) The policy must contain a provision to the effect that the insurer may not avoid the

policy or refuse to make or reduce any payment under the policy on the ground

thatÑ

(a) the builder or owner builder, as the case may beÑ

(i) breached any duty of the utmost good faith; or

(ii) failed to comply with any duty of disclosure; or

(iii) made representations to the insurer; or

(iv) failed to comply with a provision or requirement of the policy; or

(v) by act or omission of any description prejudiced the interests of

the insurer; or

(b) the premium or any instalment of the premium has not been paid.

(2) The policy may provide that if an insurer makes a payment under a policy in

circumstances to which this clause applies, the insurer is entitled to recover from

the builder or owner builder, as the case may be, any amount so paid.

29. Time for determination of claim

The policy must contain a provision to the effect that if the insurer has not determined a

written claim as to liability within 90 days of receipt of the claim, then, unless the insurer

obtains an extension of time from the insured or the Tribunal, the insurer is to be deemed

to have accepted liability for the claim.

30. Notice of defect

The policy must contain a provision to the effect that if a person gives the insurer notice of

a defect, that person is to be taken for the purposes of the policy to have given notice of

every defect to which the defect notified is directly or indirectly related, whether or not the

claim in respect of the defect that was actually notified is settled.

31. Application of section 54 of the Insurance Contracts Act 1984

(1) The policy must contain a provision to the effect that the insurer acknowledges that

section 54 of the Insurance Contracts Act 1984 (insurer may not refuse to pay

claims in certain circumstances) of the Commonwealth applies or is deemed to

apply to the policy.

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(2) The policy must contain a provision to the effect that, despite the provision

referred to in sub-clause (1), if the person making a claim against an insurer has

notified the insurer in writing, within 180 days after the date when the claimant

first became aware, or might reasonably be expected to become aware, of the

death, disappearance or insolvency of the insured, then the insurer will not rely on

section 54 of the Insurance Contracts Act 1984 to reduce its liability under the

policy or to reduce any amount otherwise payable in respect of a claim made by

reason only of any delay in a claim being notified to the insurer.

32. Insurer to notify Building Practitioners Board

The policy must contain a provision to the effect that the insurer will notify the Building

Practitioners Board at the times and in the manner agreed with the Board, in the event

thatÑ

(a) a builder is refused insurance, ceases to be eligible to renew or procure insurance

or, in respect of domestic building work performed prior to the commencement of

this Order, fails to purchase or maintain required insurance; and

(b) any claim under a policy of required insurance is settled or paid by agreement or

otherwise.

33. Certificate of Insurance

The policy must contain a provision to the effect that the insurer must provide a Certificate

of Insurance, in the form or to the effect of the form contained in either Schedule 2 or

Schedule 3 to this Order (as the case may require) and evidencing that a policy has been

issued in compliance with this Order in respect of each home for which insurance is

requiredÑ

(a) to the insured immediately on the issue of the policy; and

(b) on request by the builder, owner builder or insured at any time.

Division 2ÑAllowable Exclusions and Limitations

34. Purpose of this Division

This Division sets out provisions that a policy required under Part 2 or Part 3 may contain.

35. Policy may impose limitations on total amount payable

The policy may limit the liability of the insurer to not less than the aggregate amount of

$200 000 for all claims in respect of any one home, including reasonable legal costs and

expenses incurred by the insured (not being the builder or owner builder) associated with

the successful claim against the insurer.

36. Policy may limit cover for certain external works

(1) The policy may exclude or limit cover for loss or damage relating to landscaping,

paving, retaining structures, driveways or fencing.

(2) The policy must not exclude or limit cover under sub-clause (1) in relation to

works if those worksÑ

(a) are integral to the construction of a building; or

(b) require the issue of a building permit under the Building Act 1993; or

(d) could adversely affect health or safety; or

(e) adversely affect the structural adequacy of a building; or

(f) are not completed and the builder has died, become insolvent or

disappeared.

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37. Exclusion concerning fair wear and tear

The policy may exclude or limit cover for loss or damage due to fair wear and tear of the

domestic building work or the failure by the insured to maintain that work.

38. Limitation relating to contravention of trade practices provision

The policy may limit the indemnity provided by the insurer for loss or damage arising from

conduct of a builder that contravenes a trade practices provision to the cost of rectifying the

relevant domestic building work.

39. Requirements on insured

(1) The policy may require the insured on making a claim under the policyÑ

(a) to comply with any reasonable directions of the insurer in relation to the

completion or rectification of the domestic building work;

(b) not to undertake or cause to be undertaken any rectification works without

notifying the insurer, unless those works are reasonably necessary to

prevent or minimise any further loss or damage;

person nominated or approved by the insurer with reasonable access to the

relevant building site for the purpose of inspection, rectification and

completion of the domestic building work.

(2) The policy must provide that the insured has the right on reasonable grounds

(including loss of confidence in the builder) to refuse to provide the access referred

to in sub-clause (1)(c) to a builder nominated or approved by the insurer.

(3) Despite sub-clause (1), the policy must provide that the insurer may not reduce its

liability to the insured by reason of a failure on the part of the insured to comply

with a requirement imposed pursuant to that sub-clause unless and only to the

extent that the insurer can prove that the failure increased the liability of the insurer

under the policy.

40. Claims affecting common property

The policy may provide that ifÑ

(a) domestic building work is carried out on land in a plan of subdivision containing

common property; and

(b) a claim is paid by the insurer in relation to the common propertyÑ

then the amount of cover in respect of any one home on land in the plan of subdivision is

to be reduced by not more than an amount calculated by dividing the amount paid under

the claim by the number of homes on land in the plan of subdivision.

41. Right of subrogation

The policy may provide that the insurer is entitled to be subrogated to the rights of the

insured to the extent of any amount paid by the insurer to the insured.

42. Precautions to minimise loss

The policy may provide that the insured must take reasonable precautions to avoid or

minimise loss or damage covered by the policy.

43. Limitation on renewal

The policy may state that the policy will not be renewed and is of a kind that it is not usual

to renew.

44. Limitation periods for making claims

The policy may include a provision under which the insurer may refuse to accept a claim

that is not made within 180 days after the date on which the claimant first became aware,

or might reasonably be expected to have become aware, of the death, disappearance or

insolvency of the insured.

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Division 3ÑExcess

45. Purpose of this Division

This Division sets out provisions relating to excess that a policy required under Part 2 or

Part 3 may contain.

46. Allowable excess

(1) The policy may include a provision which requires the insured (not being the

builder or the owner builder) to bear at the insuredÕs own riskÑ

(a) an excess of not more than $1000 in respect of a claim made after 5 years

after the completion date;

(b) an excess of not more than $750 in respect of a claim made between 3 and

5 years after the completion date;

months and 3 years after the completion date;

(d) a claim under $500 made between 3 months and 12 months after the

completion date.

(2) The policy must provide that for the purposes of sub-clause (1) a claim of $500 or

more may relate to more than one defect if the amount claimed for any one or more

defects is less than $500.

(3) For the purpose of this clause, the date when a claim is made is the earlier ofÑ

(a) the date when the claimant first notifies the insurer of a circumstance that

may give rise to a claim; and

(b) the date a claim is made.

47. No excess to apply in certain circumstances

(1) Despite clause 46, a policy to which Part 2 applies must not include a provision

that requires the insured to bear an excess

(a) in respect of loss or damage arising betweenÑ

(i) the date of the insurable domestic building contract or the date of

issue of the building permit for the relevant domestic building

work, whichever is the earlier; and

(ii) the date that is 3 months after the completion date; or (b) if the

loss or damage relates to non-completion of building work.

(2) Despite clause 46, a policy to which Part 3 applies must not include a provision

that requires the insured to bear an excess in respect of any arising between the

date of the relevant contract of sale and the end of 3 months after the completion

date if the relevant contract of sale is entered into before the end of 3 months after

the completion date.

48. Only one excess to apply

Despite clause 46, the policy must ensure that an excess may be applied only once in

relation toÑ

(a) any claim comprising more than one defect; or

(b) 2 or more claims that relate to the same defect.

PART 5ÑGENERAL

49. Purpose of this Part

This Part contains general provisions relating to policies required under Part 2 or Part 3.

50. Policy not to contain terms inconsistent with this Order

(1) A policy must not contain any provision that limits, modifies, varies, avoids or

excludes any of the requirements for a policy set out in this Order.

(2) Subject to sub-clause (3), a policy must not contain any provision that provides for

limitations or exclusions to the policy not expressly permitted by this Order.

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(3) A policy may include an exclusion or limitation that is not referred to in this Order

if it isÑ

(a) a standard policy provision of the insurer and relates to loss or damage

incurred as a result of Ñ

(i) war; or

(ii) a nuclear event; or

(iii) civil unrest; or

(iv) risks normally insured under a policy for public liability or

contract works; or

(v) asbestos contamination or removal; or

(vi) act of God or nature; or

(vii) failure by the insured to maintain appropriate protection against

pest infestation or exposure to natural timbers; or

(viii) consequential loss, not otherwise covered by this Order; or

(ix) malfunction in any mechanical or electrical equipment or

appliance if the insurer can prove that the malfunction is not

attributable to the workmanship of or installation by the builder

or owner builder; and

(b) not otherwise inconsistent with, or contrary to, anything in this Order.

51. Policy can provide greater cover

A provision in a policy will not contravene or be inconsistent with this Order by reason only

that itÑ

(a) provides a greater insurance cover or additional kinds of insurance cover to that

specified in this Order; or

(b) provides for a lower excess than that specified in Division 3 of Part 4; or

52. Who is responsible to pay the premium?

The builder or owner builder (as the case requires) is responsible to the insurer for the

payment of the premium for a policy required under this Order to be issued.

53. Builder can complete work

If the insurer, builder and Building Practitioners Board all agree, nothing in this Order

prevents a builder from carrying out domestic building work under an insurable domestic

building contract despite the fact that the builder has become insolvent, subject to any

conditions that the Building Practitioners Board may require.

54. Provisions in policy can be to like effect

If this Order requires or allows a policy to include a particular provision or requirement, a

provision to the same effect as the provision or requirement will be sufficient.

PART 6ÑEXCEPTIONS

55. Exception for domestic building works undertaken by the Director of Housing

This Order does not apply to the Director of Housing incorporated under the Housing Act

1983 who carries out or proposes to carry out domestic building work.

56. Exception for demolishers

This Order does not apply to a person who is registered under Part 11 of the Building Act

1993 solely under the category of builder, class of demolisher.

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57. Exception for builders of multi-storey residential buildings

(1) This Order does not apply to a person who carries out or proposes to carry out

domestic building work under a domestic building contract for the construction of

a multi-storey residential building in respect of the carrying out of domestic

building work for the construction of that building.

(2) This Order does not apply to an owner-builder who constructs a multi-storey

residential building, in relation to any contract to sell that building.

PART 7ÑTRANSITIONAL

58. Transitional

A builder or owner builder is not required to comply with this Order in respect of the issue

of a policy relating to domestic building work if that domestic building work is covered by

a policy that was issued before the commencement of this Order and that policy complies

with the Revoked Order.

59. Guarantee deemed to comply with Order

A guarantee issued pursuant to the House Contracts Guarantee Act 1987 is deemed to

comply with this Order.

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SCHEDULES

SCHEDULE 1

DEFINED TERMS

(1) In this OrderÑ

ÒbuilderÓ means a person who, or a partnership whichÑ

(a) carries out domestic building work; or

(b) manages or arranges the carrying out of domestic building work; or

building work;

Òbuilding ownerÓ means the person for whom domestic building work is being, or is about

to be, carried out;

ÒBuilding Practitioners BoardÓ means the Building Practitioners Board established

under the Building Act 1993;

Òbuilding siteÓ means a place where domestic building work has been, is being, or is about

to be, carried out;

Òcarry outÓ in relation to building work, includes manage or arrange the carrying out of

building work;

ÒclauseÓ means clause of this Order;

Òcommencement dayÓ means the earlier ofÑ

(a) the date that the relevant domestic building contract is entered into; or

(b) the date of issue of the building permit for the relevant domestic building

work;

Òcompletion dateÓ meansÑ

(a) the date of issue of the occupancy permit in respect of the building

(whether or not the occupancy permit is subsequently cancelled or

varied); or

(b) if an occupancy permit is not issued, the date of issue under Part 4 of the

Building Act 1993 of the certificate of final inspection of the building

work for the construction of the building; or

issued or required to be issued, the date of practical completion of the

domestic building work;

ÒconstructÓ in relation to a building, meansÑ

(a) build, rebuild, erect or re-erect the building; or

(b) make alterations to the building; or

(d) cause any other person to do anything referred to in paragraph (a), (b) or

(e) manage or arrange the doing of anything referred to in paragraph (a), (b)

or (c) in relation to the building;

ÒdefectiveÓ, in relation to domestic building work, includesÑ

(a) a breach of any warranty listed in section 8 of the Domestic Building

Contracts Act 1995;

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(b) a failure to maintain a standard or quality of building work specified in the

relevant domestic building contract;

ÒdeveloperÓ means any building owner or other person for whom 3 or more homes are

being or proposed to be builtÑ

(a) on any one building site; or

(b) on more than one building site under one domestic building contract;

ÒdisappearsÓ means cannot be found after due search and inquiry;

Òdomestic building contractÓ has the same meaning as it has in the Domestic Building

Contracts Act 1995;

Òdomestic building workÓ means any work referred to in section 5 of the Domestic

Building Contracts Act 1995 that is not excluded from the operation of that Act

by section 6 of that Act;

ÒhomeÓ means any residential premises and includes any part of a commercial or industrial

premises that is used as a residential premises but does not includeÑ

(a) a caravan within the meaning of the Residential Tenancies Act 1997 or

any vehicle used as a residence; or

(b) any residence that is not intended for permanent habitation; or

1997; or

(d) a motel, residential club, residential hotel or residential part of licensed

premises under the Liquor Control Reform Act 1998; or

(e) a nursing home, hospital or accommodation associated with a hospital; or

(f) any residence that the regulations under the Domestic Building

Contracts Act 1995 state is not a home for the purposes of the definition

of ÒhomeÓ in that Act;

ÒinsolventÓ meansÑ

(a) in the case of a natural person, insolvent under administration as that

expression is defined in the Corporations Act 2001; or

(b) in the case of a body corporate, subject to external administration under

the Corporations Act 2001;

Òinsurable contract of saleÓ means a contract of sale referred to in clause 18;

Òinsurable domestic building contractÓ means a domestic building contract in which the

contract price for the carrying out of domestic building work is more than $12,000;

ÒinsuredÓ meansÑ

(a) in the case of a policy issued pursuant to Part 2Ñ

(i) any person insured under the policy; and

(ii) any person to whom the cover under the policy extends pursuant

to clause 11; and

(b) in the case of a policy issued pursuant to Part 3Ñ

(i) any person insured under the policy; and

(ii) any person to whom the cover under the policy extends pursuant

to clause 22Ñ

but, unless expressly provided for in the policy, does not includeÐÑ

(i) the builder; or

(ii) the building owner, if the building owner is a related body

corporate (within the meaning of the Corporations Act 2001) of

the builder; or

14 S 98 23 May 2003 Victoria Government Gazette

(iii) the building owner, if neither the builder nor the building owner

is a public company but each has a common director or a

common shareholder; or

(d) in the case of a policy issued pursuant to Part 3Ñ

(i) the owner builder; or

(ii) the purchaser, if the purchaser is a related body corporate (within

the meaning of the Corporations Act 2001) of the owner builder;

(iii) the purchaser, if neither the purchaser nor the owner builder is a

public company but each has a common director or a common

shareholder;

Òmulti-storey residential buildingÓ means a buildingÑ

(a) that has a rise in storeys (within the meaning of the Building Regulations

1994) of more than 3; and

(b) that contains 2 or more separate dwellings;

Ònon-structural defectÓ in relation to a building, means a defect in building work other

than a structural defect;

Òowner builderÓ in relation to a building, meansÑ

(a) a person to whom section 137B of the Building Act 1993 applies; or

(b) a mortgagee in possession of the building from that person; or

ÒPartÓ means Part of this Order;

ÒpolicyÓ means a contract of insurance;

Òpractical completion dateÓ in relation to domestic building work, means the date when

the domestic building work is completed except for any omissions or defects that

do not prevent the domestic building work from being reasonably capable of being

used for its intended purpose;

ÒRevoked OrderÓ meansÑ

(a) the Domestic Building Insurance Ministerial Order made on 29 October

1998 and published in the Government Gazette on 30 October 1998 as

amended by the Domestic Building Insurance (Amendment) Ministerial

Order made on 9 November 1998 and published in the Government

Gazette on 12 November 1998; and

(b) the Domestic Building Insurance Ministerial Order made on 16 May 2002

and published in the Government Gazette No. S82 dated 20 May 2002.

ÒstoreyÓ has the same meaning as it has in the Building Regulations 1994, but does not

include a space within a building if the space contains only accommodation

intended only for vehicles;

Òstructural defectÓ in relation to a building, means any defect in a structural element of

the building that is attributable to defective design, effective or faulty

workmanship or defective materials (or any combination of these) and thatÑ

(a) results in, or is likely to result in, the building or any part of the building

being required by or under any law to be closed or prohibited from being

used; or

(b) prevents, or is likely to prevent, the continued practical use of the building

or any part of the building; or

Victoria Government Gazette S 98 23 May 2003 15

(i) the destruction of the building or any part of the building; or

(ii) physical damage to the building or any part of the building; or

(d) results in, or is likely to result in, a threat of imminent collapse that may

reasonably be considered to cause destruction of the building or physical

damage to the building or any part of the building;

Òstructural elementÓ in relation to a building, meansÑ

(a) any internal or external load-bearing component of the building that is

essential to the stability of the building or any part of it, including (but not

limited to), foundations, floors, walls, roofs, columns and beams; or

(b) any component (including weatherproofing) that forms part of the

external walls or roof of the building;

Òtrade practices provisionÓ means section 52, 53, 55A or 74 of the Trade Practices Act

1974 of the Commonwealth or section 9, 11 or 12 of the Fair Trading Act 1999;

ÒTribunalÓ means the Victorian Civil and Administrative Tribunal established by the

Victorian Civil and Administrative Tribunal Act 1998.

(2) In this Schedule, in calculating the number of homes that are being built or proposed to be

built for the purposes of determining whether a building owner or other person is a

developer, a home which is or is to be the principal place of residence of that building

owner or person is to be disregarded.

16 S 98 23 May 2003 Victoria Government Gazette

SCHEDULE 2

Building Act 1993

Section 135

Domestic Building Insurance Order

Certificate in respect of Insurance

Domestic Building Contract

A contract of insurance complying with the Ministerial Order for Domestic Building Insurance

issued under section 135 of the Building Act 1993, namelyÑ

Type of insurance

Insurance

has been issued by: [insert name of insurer]

in respect of: [insert brief description of domestic building work]

at: [insert address or description of land]

carried out by: [insert name of builder]

for: [insert details of building owner Òthe insuredÓ]

Subject to the Building Act 1993, the Ministerial Order and the conditions of the insurance contract,

cover will be provided to the building owner named in the domestic building contract and to the

successors in title to the building owner.

Date: [insert date]

Signed for and on behalf of the insurers: [insert signature]

Victoria Government Gazette S 98 23 May 2003 17

SCHEDULE 3

Building Act 1993

Section 135

Domestic Building Insurance Order

Certificate in respect of Insurance

Contract of Sale

A contract of insurance complying with the Ministerial Order for Domestic Building Insurance

issued under section 135 of the Building Act 1993, namelyÑ

Type of insurance

Insurance

has been issued by: [insert name of insurer]

in respect of: [insert brief description of domestic building work]

at: [insert address or description of land]

carried out by/on behalf of: [insert name of owner builder]

for: [insert details of purchaser Òthe insuredÓ]

Subject to the Building Act 1993, the Ministerial Order and the conditions of the insurance contract,

cover will be provided to the purchaser named in the contract of sale and to the successors in title

to the purchaser.

Date: [insert date]

Signed for and on behalf of the insurers:[insert signature]

Dated 22 May 2003

MARY DELAHUNTY MP

Minister for Planning

18 S 98 23 May 2003 Victoria Government Gazette

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Victoria Government Gazette S 98 23 May 2003 19

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20 S 98 23 May 2003 Victoria Government Gazette

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