More families left in the lurch by liquidated home builders will be eligible for taxpayer-funded help

A payments scheme established for families who lost deposits when Porter Davis collapsed will be expanded to other companies’ victims.

Victims of Terry and Andrea Conder were just one of the customers left in limbo after the collapse of residential builder Hallbury Homes. Picture: Mark Stewart

Hundreds of families who lost deposits after companies building their dream homes collapsed will be able to apply for special taxpayer-funded payments worth up to $50,000.

A payment program was established earlier this year to help customers who were dudded by home builder Porter Davis, which did not take out domestic building insurance for hundreds of its clients before it went into liquidation.

Treasurer Tim Pallas said that program, which had so far had 600 applications from affected Porter Davis customers, would now be expanded to other Victorians who lost deposits when other home builders collapsed in the past year – such as Snowdon Developments and Hallbury Homes.

Hundreds of families who lost deposits after companies building their dream homes collapsed will be able to apply for special taxpayer-funded payments. Picture: Mark Stewart

Porter Davis customers who paid a small “pre-deposit” for tender agreements – worth about 3 per cent of the contract price rather than a traditional 5 per cent – would also be eligible for the scheme, which is capped at $50,000 per customer.

It is expected about 400 additional families will become eligible for the expanded scheme, which is expected to cost an extra $13 million.

Treasurer Tim Pallas said builders should have taken insurance out for all clients, and this scheme would fill the gap left by those who did the wrong thing.

“Dreams turned to nightmares for people who should have been protected by their builders, and that’s not acceptable,” he said.

“We’ve backed the original Porter Davis families, and now other hardworking families who have similarly suffered over the past 12 months will have the certainty and confidence they deserve to move ahead.”

A website has been established for those affected by the liquidation of a builder in the past year, at vic.gov.au/liquidated-builders-survey, and applications will open shortly.

A company’s liquidator will be required to verify details of affected customers, and that they did not have insurance cover.

A Porter Davis house under construction in Hillcrest. Picture: Richard Walker

In the coming days, the first payments to Porter Davis customers are set to begin flowing.

Payments vary depending on the amount the customers paid for their 5 per cent deposit, and are capped at $50,000.

The government has promised to change domestic building insurance laws, including by introducing new offences and bigger penalties or companies that do not take out required cover after requesting deposits.

Opposition home ownership and housing affordability spokeswoman, Jess Wilson, said the change came after months of advocacy by “distressed Victorian home buyers” who should have already had this support in place.

“This is the right outcome for dozens of first home buyers who otherwise would have lost all their hard-earned deposits simply because the system and the Andrews Government regulator had let them down,” she said.

“Whilst this financial support is welcome, it is essential to initiate a comprehensive review of the regulation governing Victoria’s residential construction sector to ensure situations such as this do not occur again.”

When Porter Davis went bust it left 1700 properties unfinished and tens of millions of dollars to creditors such as subcontractors.

It was recently revealed that building giant Metricon will take on at least 300 of the unfinished homes, through arrangements with the state’s insurance agency.