Institute welcomes ‘phoenixing’ crackdown

The Australian Institute of Architects has welcomed the Victorian government’s move to introduce new laws to combat “phoenixing” – whereby businesses liquidate themselves to avoid liability for the cost of poor construction and later re-emerge as a new organization.

The proposed Building and Environment Protection Legislation Amendment Bill will strengthen the Victorian Building Authority to investigate suspected “phoenix” activity, while also “modernize and strengthen the Architects Registration Board of Victoria to ensure that the Board can effectively respond to present and future challenges and improve consumer protection and confidence in the industry.”

Helen Lochhead, national president of the Institute, said, “Architects are regulated to adhere to the highest standards of accountability of any building practitioner and we welcome moves to see this enhanced and extended across the industry with these proposed new laws from the Victorian Government,” she said.

“For years now the Institute has been leading calls for all governments to take action and urgently improve how the building construction in this country is regulated […] There must be increased accountability and that’s why we want to see a nationwide requirement for the registration of all building practitioners, in the same way architects are.”

While the proposed legislation does not directly affect the works of architects, who are independently regulated under the Architects Act 1991 and the Architects Registration Board of Victoria, Lochhead said the change would benefit the profession all the same.

“Phoenixing is not used in our profession but we are pleased to see action being taken in other parts of the construction sector where it is more prevalent,” she said.

“Through our Code of Conduct, architects commit themselves to serving the best interests of the broader community, not just their clients’ interests […] Nationwide, architects are governed by strict laws and penalties for failing to uphold these requirements and responsibilities and while rare, the mechanism exists to deregister an architect for professional misconduct.”

Victorian chapter president Amy Muir said, “A key plank of our advocacy agenda ahead of the last Victorian state election was regulatory reform in Victoria to improve design standards and bolster the resources and regulatory recourse available to the ARBV in the best interests of both our members and their clients.

“We see this as a mutual win for the consumer and the architectural profession, and commend the Andrews Government for taking action. Governments at all levels must also be accountable for the design standards and planning processes they have either put in place or failed to reform, despite expert advice, research and advocacy by a range of industry participants, including the Institute.”

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