Victorian government expands collapsed builder protection scheme

The scheme has previously protected customers of Porter Davis Homes, a construction company giant that collapsed and failed to take out domestic building insurance (DBI) on behalf of their clients.

The expansion of the Liquidated Builders Customer Support Payment Scheme will now support those who were under contract with construction companies that were liquidated between 1 July 2023 to 20 February 2024.

The premier’s office estimated that the scheme would allow an additional 100 Victorians to be eligible for the scheme.

Montego Homes’ customers will also be eligible to apply, following its administration in January.

The Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023 was passed through the Victorian state government in November 2023, which requires builders to cover clients with DBI if they are under contract for domestic building work costing more than $16,000.

Amendments were made to the Domestic Building Contracts Act 1995 in February 2024 that introduced penalties for builders that enter into a major domestic building contract without acquiring DBI.

Individual builders can be fined up to $96,000 under the act and companies can be fined up to $480,000.

The premiere’s office noted that builders should be aware that the extension of the scheme is “occurring under special circumstances” and will be funded by the $13.55 million support package that was previously announced.

Assistant Treasurer Danny Pearson said: “We are supporting families who have been left stranded through no fault of their own – and putting builders on notice: new penalties apply to individuals and companies who fail to take out Domestic Building Insurance…

“We urge all customers to check that their builder has taken out insurance – as all builders are obliged to – through the VMIA policy checker.”

Speaking on the impact of the scheme, the Minister for Consumer Affairs, Gabrielle Williams, stated: “This scheme has been a lifeline for many Victorians – this extension will provide customers affected by the collapse of Montego Homes and other builders some much-needed support as they try to move forward.”

The Minister for Planning, Sonya Kilkenny, said that Victorians have the right to expect their homes to be built to last and uphold building standards.

Kilkenny continued: “We’re delivering a suite of building reforms that provide clarity for industry and stronger protections for Victorians.”

[Related: Victorian government compensates Porter Davis collapse victims]