Porter Davis customers blocked from online meeting as blaze destroys Clyde home

The Premier says his government was approached to bail out Porter Davis, but says it “made the right call” not to offer financial support.

The Andrews government is investigating allegations customers who paid deposits to Porter Davis were uninsured, in what could be a breach of ­Victorian law.

It comes as the Premier revealed his government had been approached to bail out the struggling home builder, but had refused to do so.

Mr Andrews said offering financial support to the big builder would result in the government “chasing doubtful debts”.

“The treasurer had some discussions here, but I think we’ve made the right call here,” he said.

“Where a bank refuses to prop up a business, that’s exactly the place where I don’t think we should be stepping in because what that tells you is the commercial reality is that the place is just not going to survive.

So that’s chasing doubtful debts and bad debts. That’s not something that I think taxpayers will want the government to do.”

He said he wouldn’t rule out support for Porter Davis once the root problem had been dissected.

A Porter Davis home half built in Mitcham. Picture: Ian Currie

“We’ve got to work out exactly what’s happened, and then we have to stand with all of those customers, not just with words, but with action,” he said.

Meanwhile, on Wednesday night, the state government confirmed it had received reports of issues with customers that should have been insured.

Under Victorian law, builders are required to purchase domestic building insurance on behalf of homeowners for projects over $16,000.

They must do so before receiving any money and, if they do not purchase this insurance, they may be breaching a ministerial order.

Customers are being urged to contact the state’s insurer of last resort, the VMIA, to find out if they have coverage.

Those who do not have a certificate of insurance should get in contact with the company’s liquidator.

“The law requires builders to take out a domestic building insurance policy on behalf of a client before taking a deposit,” a spokesman said.

“Customers rightly expect their construction firms to obey the law – and we’re now looking into concerning allegations relating to Porter Davis’s conduct.”

It comes as Victorians affected by the collapse of the company have increasingly reported alarming attempts to gain access to their personal details or seek financial gain.

Earlier this week, a group of Porter Davis customers were also furious to be invited to an “information session” that could only be accessed if you paid $220 per person.

Attorney-General Jaclyn Symes said she believed consumer watchdogs were looking into these reports and urged people to be wary of scams.

Chaos as customers locked out of online meeting

Liquidators addressed angry families who were in the process of getting dream homes built when the building giant collapsed last week.

Some Porter Davis customers may have lost their entire deposit after the company collapsed.

Hundreds of customers were left stranded from the online meeting, however, due to a cap on the number of people who could log in to Microsoft Teams meetings.

Those who did attend the virtual briefing heard Said Jahani, one of the Grant Thornton liquidators handling the case, tell them it may take months for customers to get new builders for their jobs, and that costs for their contracts would increase.

He said warranty insurance was being investigated for those situations, but there were a range of price impacts – such as the cost of trades, and lack of availability of trades – impacting the building sector.

“The cost of building a home has increased … across the whole industry,” he said.

Mr Jahani said one of the concerning issues that had been identified during the first few days of the liquidation of Porter Davis was that some of its newer clients may be uninsured.

This affected those customers who paid a deposit and signed contracts before Porter Davis had building permits – a common practice among “volume builders”.

“There was usually a timing lag or timing gap between the deposit being paid by the customer and the permit being gained,” he said.

“A number of customers have fallen into that gap.

“We are in consultation with the (state’s home building insurer) VMIA about what the consequences for customers who fall into that gap may mean.

“At its extreme it means you do not have insurance cover, and it means the deposit you have paid, has been lost.”

Major home builder Porter Davis has gone bust with liquidators appointed to manage proceedings. Picture: Ian Currie

“We are trying to work with the VMIA … about whether there is an alternative solution there.”

He said the priority was trying to get people into their homes, and Grant Thornton was working hard to try to secure buyers and other builders who could take on parts of the business.

This could see works finished in an “expedited” way, while others may have to wait many months for a substitute builder to be found.

About 50-60 staff had been kept on at Porter Davis to try to assist with that process, while more than 400 others had already been let go.

The liquidators also reiterated that there was the potential for criminal charges to be pressed against people who were making unauthorised access to some Porter Davis sites, after reports of damage to properties.

Premier responds to ‘troubling’ reports

Daniel Andrews said authorities would investigate reports that Porter Davis used significant discounts to bait customers despite being unable to fulfil contracts.

The Premier said the reports were “troubling”.

“It’s very troubling to think that anyone would be out there trying to bait customers to sign contracts at a discount rate when you’re in real trouble, and you knew you’re in real trouble. That’s very significant,” he said.

“Let’s see if that is the case. They’re certainly the reports we’ve seen and I’m confident that our authorities will be looking at that and any other issues that come out of this.”

About 500 people have reached out to the Victorian Managed Insurance Authority in the wake of the company’s collapse, Mr Andrews said.

“This will be a very challenging time,” he said.

Mr Andrews predicted workers impacted by the liquidation would have no trouble finding work given significant skill shortages.

Suspicious blaze destroys Porter Davis home

A Porter Davis home went up in flames on Monday afternoon amid claims that out-of-pocket tradies were targeting properties in Melbourne.

Emergency services were called to the Andante Crescent property in Clyde about 4.30pm after reports of smoke billowing from the roof.

Firefighters battled the blaze for 30 minutes before it was deemed under control.

It’s understood the Riverfield Estate property was unoccupied at the time but neighbours saw someone sneak into the two-storey home before the inferno started.

Victoria Police said the investigation remained ongoing but the fire was being treated as suspicious.

The house was next door to two other Porter Davis homes.

It’s believed about $350,000 worth of damage was done.

Amy Brown, who lives close by, told the Herald Sun about $350,000 worth of damage was done to the home.

“I’m angry and devastated that these poor Porter Davis customers just keep getting blow after blow,” she said.

“The stress relating to Porter Davis going under is already too much for these customers and now additional destruction by angry subcontractors, it’s just unfair.

“I can absolutely sympathise with the contractors who are also suffering and may to lose their business due to being unpaid but they’re not hurting Porter Davis by this destruction, they’re just hurting the paying customer.”

Ms Brown said both homes next to the damaged one were Porter Davis builds.

“If it was lit by an angry subcontractor, they may have lit the house in the middle hoping it would spread to the Porter Davis houses either side of it,” she said.

Another Porter Davis home damaged in Melbourne.

Anxious customers have installed security cameras after allegations disgruntled tradies were vandalising properties.

One woman, who wished not to be named, said about $50,000 worth of damage was done to her Berwick build after subcontractors intentionally left the sink and bath tapes running, causing 7cm of water to flood the property.

The new mum and her partner were expected to move into the home with their 14-day-old baby on Thursday.

“What they have done has not affected Porter Davis at all but unfortunately only us as now the damages are more than what we had remaining on the house,” she said.

“It’s devastating to understand that someone would actually break in and do this to our home.”

Other customers have reported ripped fixtures, shattered windows, smashed cabinetry and stolen furniture, forcing them to change their locks and put up fences.