Hundreds of people were left with incomplete homes and severely out-of-pocket when embattled Perth builder Nicheliving collapsed, but new laws introduced to Western Australia’s parliament aim to stop that happening again.
The state government is proposing legislation that would give the building commissioner new powers to demand financial information from builders they believe to be at risk of collapse.
If builders cannot prove they are financially viable, the new laws would allow home owners to access home indemnity insurance and seek a new builder to finish their house.
Tony Buti says home builders will need to provide more financial information under the changes. (ABC News: Courtney Withers)
“If they don’t do that … the Building Services Board can impose a temporary suspension while that information is not being gathered,” Commerce Minister Tony Buti told 102.5 ABC Perth.
‘Decent first step’
The legislation is a step in the right direction for former Nicheliving customer Nelson, who first spoke to the ABC in 2024 when the builder’s financial strife up-ended his family’s future.
Nicheliving customers Nelson and his family at their rental in Perth. (ABC News: Courtney Withers)
“My wife and I were expecting our first child and tried to plan our life around moving into our house,” he said on Wednesday.
Perth couple face roadblocks finishing Nicheliving home
“Things kept getting delayed, over and over … it just dragged out until their collapse essentially.”
Nelson said the family was only able to move in after a new builder took over and finished their home.
“I know other people were homeless, living in their cars and stuff, and it’s just completely unacceptable.”
The new powers would allow the regulator to impose conditions on the building registrations of companies, and even strip them of their registrations should they not comply with financial requirements. (ABC News: Alicia Hanson)
He said it remained to be seen if the new measures were enough to prevent another similar saga from happening.
“I think it’s a decent first step [but] I don’t know if it goes far enough,” he said.
Holding builders accountable
The proposed laws come amid a nationwide push to provide more housing for more people.
WA Consumer Protection Commissioner Trish Blake said the changes were “critical” for an efficient market, and that any “honest” home builder should not be concerned.
Trish Blake says the proposed laws are “critical” to protecting consumers. (ABC News: Samantha Goerling)
“Consumers have to be able to trust that what they’re buying is what they’re going to get, traders have to trust that we hold not only them accountable, but everyone else in their industry accountable,” she told 102.5 ABC Perth.
“My colleagues in the building commission will have more power to monitor more closely, and be able to step in before we get to the situation we had with Niche.
“The consumer was completely powerless in that situation, and that’s not a situation we want to find anyone in in the future.”
The legislation introduced on Wednesday would also provide more clarity on when builders can increase the cost of homes being built. (ABC News: Alicia Hanson)
She said federal laws, which prevent home builders from trading while insolvent, often only came into effect when it was too late.
“When the company goes into liquidation … by then the harm has already been done to the consumer, and then we’re just punishing the directors,” she said.
Warnings about more regulations
Matt Moran, chief executive of industry group Master Builders WA, said the measures would help rule out “dodgy builders” and “cowboys”, but cautioned that too much regulation could hurt housing supply.
“We support these reforms at this point — but we need to look into them in detail, we need to have consultation with the industry,” he said.
“We don’t mind oversight, but builders need to get on and do the job of building. We need to increase supply, so we don’t need more red tape.”
In WA, building inspectors are not legally required to be accredited, something the state government is also proposing to change.
Mr Moran said this set up would be “a big win” for both builders and consumers.