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VIC Builder and Developer Referral Program - Legal?

Discussion in 'Commercial Law Forum' started by DavidBellin544, 8 July 2015.

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  1. DavidBellin544

    8 July 2015
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    This is my first post so forgive any faux pas I might commit in posting.

    Anyway, I work for a building group and we are initiating a referral program, and we have a few architects and designers on our referral program. But I spoke to a developer who I pitched the idea to and he said that it was legally murky. So I was wondering, is a builder giving a developer referral rates for the developer to favour the builder in its developments illegal?

    I'm from Victoria if that makes a difference.
  2. Tracy B

    Tracy B Well-Known Member

    24 December 2014
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    Hi @DavidBellin544,

    Apologies for this delayed response, I only came across your post today and noticed it has not been answered.

    If you're still interested in the question:

    I believe there is no issue with developers taking subsidies from builders at law. In fact, developers and builders often work closely together and form informal partnerships. Developers often have their preferred builders with whom they form informal business relationships. However, there may be an internal company policy or professional society that takes issue with receiving commissions. Similarly, you may face resistance from any professional associations you, or your company, are part of (e.g. Victoria Residential Builders Association or Master Builders' Association).

    As I am not an expert in this area of law, perhaps it is worth contacting the above organisations for their stance.

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