More compensation hope for Victorian families left stranded by builders who went bust

More Victorian victims left in the lurch when the builder of their dream home went bust can now apply for special taxpayer-funded payments.

Hundreds more families who lost their deposits when companies building their dream homes collapsed are one step closer to compensation.

Victorians left thousands of dollars out of pocket after their building companies went into liquidation will now be able to join hundreds of customers left in the lurch by building giant Porter Davis in applying for special taxpayer-funded payments.

Families who lost deposits for their dream homes during the collapse of Hallbury Homes and Snowdon Developments can now apply for payments of up to $50,000.

Victims who paid up to 5 per cent of the value of their building contract, where their builder failed to take out building insurance, are eligible.

The state government support scheme was sparked by the sensational collapse of Porter Davis when hundreds of Victorians were left stranded after the building company failed to take insurance out on their behalf.

By law, domestic builders must take out building insurance on behalf of customers when they accept a legal deposit.

More than 200 families from the original Porter Davis Homes group of 5 per cent deposit-makers have had their payments approved. Picture: Ian Currie

Earlier this year, the state government expanded the scheme to cover Porter Davis customers who lost deposits of 3 per cent under pre-deposit “tender agreements”.

More than 200 families from the original Porter Davis Homes group of 5 per cent deposit-makers have had their payments approved.

Government Services Minister Danny Pearson said the government would work to verify claims as quickly as possible.

“People make big sacrifices to get a deposit and to then lose that through the actions – or inactions – of their builder is heart-breaking,” he said.

“We’ve moved swiftly to open applications for the expanded scheme because we understand how important this support will be for families.”

The government has also announced plans to reform domestic building insurance requirements by introducing a new offence with tougher penalties for builders who request deposits without taking out the required insurance.

Customers affected by the liquidation of building companies other than Porter Davis, Hallbury Homes and Snowdon Developments, during the last financial year, and meet the above criteria, are also being encouraged to provide their details.

Shadow minister for Housing Affordability, Jess Wilson, said the Liberals and Nationals had advocated for months to see the scheme expanded to include “any Victorian home builder left stranded without the insurance they were legally entitled to”.

“The Andrews Government must now ensure these claims are promptly processed, so that Victorians caught out by builder collapses can receive the support they should’ve had all along,” she said.

Furious and emotional Porter Davis customers took to the steps of Victorian parliament in April to protest, demanding that the government cover their deposits. More than 1700 properties were left unfinished by the big builder.Applications under the scheme can be lodged at http://www.vic.gov.au/liquidated-builders-customer-support-scheme.