The Western Australian government has introduced new legislation to parliament designed to protect home buyers from the financial and emotional devastation caused by building company collapses. The move follows the failure of Perth builder Nicheliving, which left hundreds of customers with unfinished homes and significant financial losses.
Strengthening Regulatory Oversight
The proposed laws would grant the building commissioner new authority to demand financial information from builders suspected of being at risk of collapse. If a builder is unable to prove they are financially viable, home owners may be permitted to access home indemnity insurance to hire a new builder to complete their residence.
Commerce Minister Tony Buti stated that builders will be required to provide more financial data under these changes. He noted that if builders fail to comply, the Building Services Board could “impose a temporary suspension while that information is not being gathered.”
The Human Cost of Collapse
For many, the collapse of Nicheliving was catastrophic. Nelson and Kirstyn Pray are among more than 200 customers who received a government lifeline this month, though they continue to struggle to finish their home.
Nelson, who first spoke out in 2024, described a period of constant delays that lasted until the company’s eventual collapse. He recalled that he and his wife were expecting their first child while trying to plan their life around the move, adding that some other affected people were “homeless, living in their cars and stuff,” which he described as “completely unacceptable.”
While Nelson called the legislation a “decent first step,” he expressed uncertainty regarding whether the measures go far enough to prevent similar sagas in the future.
Industry and Government Perspectives
WA Consumer Protection Commissioner Trish Blake described the changes as “critical” for maintaining an efficient market. She argued that federal laws preventing insolvent trading often only take effect after the harm is already done to the consumer, leaving regulators to merely punish directors after liquidation.
Blake emphasized that the new powers would allow the building commission to monitor builders more closely and “step in before we get to the situation we had with Niche.” The legislation also aims to provide greater clarity regarding when builders are permitted to increase the cost of construction.
Matt Moran, chief executive of Master Builders WA, indicated that the reforms could help eliminate “dodgy builders” and “cowboys.” However, he cautioned that excessive regulation could negatively impact the housing supply.
Moran stated that while the industry supports oversight, “builders need to get on and do the job of building.” He called for detailed consultation with the industry to ensure that the push for more housing is not hindered by unnecessary red tape.
Potential Next Steps
As the legislation moves through parliament, the government may seek further consultation with industry bodies to refine the reporting requirements. If passed, the regulator could begin stripping registrations from companies that fail to meet the new financial requirements.
The proposed requirement for accredited building inspectors may also be implemented, which Matt Moran suggested would be “a big win” for both consumers and builders.
Frequently Asked Questions
What new powers will the building commissioner have?
The commissioner would be able to demand financial information from builders believed to be at risk of collapse and monitor them more closely to intervene earlier.
How do the new laws help home owners if a builder fails?
If a builder cannot prove financial viability, the laws would allow home owners to access home indemnity insurance to find a new builder to finish their house.
What are the potential downsides of these regulations?
Industry representatives, such as Master Builders WA, have warned that too much regulation and “red tape” could potentially hurt the overall housing supply.
Do you believe stricter financial reporting for builders is the best way to protect home buyers?
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