A little-known Victorian rule is pushing designers into builder territory as projects pass the $10,000 mark.

An obscure Victorian building rule is reshaping the everyday reality of interior designers, who may be breaking the law each time they take on a project worth more than $10,000. The threshold, originally intended to regulate building contractors, now applies to any work above that value, even with cosmetic projects. A simple repaint or the installation of a light can trigger regulated building work, forcing designers into builder territory without their knowledge.

Criminal defence lawyer Lauren Cassimatis from Gallant Law says the issue is widespread across Victoria and growing more severe as renovation spending surges. Victorians poured $3.902 billion into permitted renovations last year, nearly matching the state’s all-time high. “Most design projects now cross the compliance line before they begin,” Cassimatis says.

During a recent consultation, a Melbourne designer discovered her $10,000 cosmetic refresh – repainting and a single light installation – technically required builder-level compliance. According to Cassimatis, this scenario is now typical.

“The regulators look purely at the value of the work. It’s about the quantum, not the nature of the task,” she explains. “Designers think they’re doing cosmetic coordination. The law says they’re running building sites. That mismatch is where the liability sits.”

A line most designers don’t know they’ve crossed

Cassimatis says the threshold routinely captures projects that appear surface-level but expand into structural territory once work begins. She points to cases where peeling back paint exposes damp, plaster damage or cracking brickwork.

“A designer may think they’re freshening a feature wall, then suddenly they’re commissioning plaster repairs and brickwork. Even if those discoveries weren’t part of the original brief. The moment they oversee that process, they’ve effectively become the project manager,” she says.

Under Victorian regulations, the person in charge of a project worth more than $10,000 is treated as carrying out building work – regardless of whether they see themselves as a builder. If a designer is coordinating trades such as plumbers, plasterers or cabinet makers, the regulator interprets their role as running a build.

“You’re now responsible for the job as a project manager,” Cassimatis says. “If the work is above $10,000, you’re treated as a builder. You need the correct insurance, licences and registration. Without them, you’re in breach.”

And the consequences can be severe. Contracts may be deemed invalid, insurance voided and designers exposed to breach-of-regulation offences and prosecution.

The quiet legal traps behind everyday design work

Many designers only discover the problem when money is at stake. Cassimatis frequently sees disputes where designers attempt to recover fees from clients only to learn that the contract itself holds no legal weight.

“If a client realises the designer wasn’t registered or insured, they can say the contract is void,” she explains. “The designer loses their rights to pursue payment. Their work becomes essentially unrecoverable.”

Some designers try to solve this by getting a builder to ‘lend’ their licence to the job, a workaround Cassimatis says is illegal.

“We call that licence lending, and it’s an offence. Designers can be prosecuted for being complicit in it,” she says.

Insurance is another minefield for designers who unknowingly take on building-level responsibility and often discover too late that they have no coverage if something goes wrong.

“If there’s structural damage worth hundreds of thousands or more, the designer can be personally liable for those costs,” Cassimatis warns. “And if they later apply for registration, the board may look at their history of non-compliance and refuse their application. Long-term careers are on the line.”

While jail is “extremely rare”, she says serious breaches on large projects can trigger criminal-level consequences. Most of the time, the penalties are financial, but substantial nonetheless.

A system in need of clarity

The root problem, Cassimatis’s believes, is confusion, particularly around what counts as cosmetic work versus structural work.

“There needs to be clear guidance around the nature of the works and how far a designer’s duty extends,” she says

If you’re unsure about your liability in projects, check the Consumer Affairs extensions and renovations checklist.