Victoria's First Resort Home Warranty Scheme

Introduction

From 1 July 2026, Victoria’s domestic building insurance changed. The First Resort Home Warranty Scheme has replaced Domestic Building Insurance (DBI), and the change alters when and how homeowners can claim.

The problem with DBI

Under DBI, owners generally could not access cover unless the builder had died, disappeared, or become insolvent. A builder who was simply refusing to fix defective or incomplete work, while still trading, left the insurance largely useless. That gap often left clients negotiating or litigating directly with an uncooperative builder while defects sat unresolved.

What changes under first resort

The new scheme removes that threshold. Owners can claim directly where work is incomplete, defective, or non-compliant and the builder won’t or can’t fix it, without needing to show insolvency, death, or disappearance.

Cover applies to domestic projects up to three storeys with a contract value over $20,000, with maximum cover of $400,000.

Claims and dispute resolution now sit with the Building and Plumbing Commission (BPC), the regulator that has replaced the Victorian Building Authority. The BPC has taken over practitioner registration, dispute resolution (formerly the DBDRV’s role), and the issuing and processing of warranty claims (formerly handled by the Victorian Managed Insurance Authority).

The BPC can also issue rectification orders directly against builders. These powers are retrospective, reaching back up to ten years from the occupancy permit, certificate of final inspection, or date of practical completion, whichever applies. Work completed well before 1 July 2026 can still be caught.

Time limits

The lower claims threshold comes with tighter procedure. Claim time limits under the new regime are reduced compared to DBI. For practitioners, client advice needs to shift from expecting a long wait before a DBI claim becomes available, to warning clients that the window to claim under the new scheme may close faster than they expect.

Practical implications

For property and construction lawyers, this changes leverage in a dispute. Clients no longer need to wait out an insolvent or vanished builder to get insurance-funded rectification; they can pursue it while the builder is still operating. That affects the calculus around negotiating, mediating, or going straight to a BPC claim. Contract drafting around defects liability periods and statutory warranties is worth revisiting, along with standard advice given at the point a defect is first identified.

A further round of amendments to the Domestic Building Contracts Act 1995 (Vic) is expected in December 2026.

To learn more about any of the matters discussed here, or if you require legal assistance, please contact Chris Moshidis, Director and Principal Lawyer on +61 3 9521 7956 or chris@urbanlawyers.com.au.