Porter Davis collapse sees Melbourne family lose $23k, miss out on government support

The Porter Davis collapse led to almost all customers getting back every cent they lost. But a tiny decision means one Melbourne dad misses out.

Customers of a collapsed building company will receive their money back as part of a generous government bailout – except for one group who have been left out.

In March, Australia’s 13th largest home builder Porter Davis Homes went into liquidation, placing 1700 projects and another 779 empty blocks of land in jeopardy across Victoria and Queensland.

It later emerged that 560 customers had paid tens of thousands in deposit money but Porter Davis had never taken out building insurance, leaving them with no automatic payout from the insurer after the company went under.

Yet in an unprecedented step, Victorian Premier Daniel Andrews agreed to refund them their lost money in a $15 million government bailout announced a month later, in April.

But for one customer, Max*, he is not eligible, leaving him $23,000 out of pocket.

The issue lies in the fact the Melbourne dad paid for a tender and was in the final stages of signing an official contract when Porter Davis collapsed.

This means he never received a contract number and is therefore ineligible for government support.

“I am pretty much shattered, there was a lot of emotional investment,” Max, 46, told news.com.au.

“As a single income earner, it’s my responsibility to provide for my family.”

Customers of collapsed builder Porter Davis staged protests across the country and the government eventually announced a compensation scheme – but some have missed out. Picture: Richard Walker

As part of the process, Max initially paid $2000 to Porter Davis as an expression, then three per cent of the estimated build price to put together the tender.

For Max, with his five bedroom, four bathroom house slated to cost around the $700,000 mark, his tender price was steep.

He paid $21,000 to Porter Davis, money that he doesn’t expect to see again.

The forklift driver and dad-of-three was in the final stages of negotiating an official contract when the company suddenly appointed liquidators.

News.com.au understands he is among dozens of Porter Davis customers who paid tenders but never signed a contract, rendering the government’s help package just out of reach.

A Victorian government spokesperson indicated that anyone in that situation are considered “separate” to the $15 million bailout, but wanted their information for a wide-ranging survey into the pitfalls of the building industry in the state.

“Porter Davis customers who paid a tender deposit are asked to provide information via the survey so that the government can consider their case,” the spokesperson told news.com.au.

“This is separate to the scheme previously announced for Porter Davis customers who signed their contracts and paid their deposits but where Porter Davis did not take out Domestic Building Insurance (DBI), in breach of their obligations.”

Get in touch | [e-mail]

Porter Davis Homes collapsed into liquidation in March. Picture: Richard Walker

A liquidator’s report into Porter Davis released earlier this month declared that unsecured creditors – like Max – are unlikely to recover a cent of their missing cash.

At last count, the company owed a whopping $71 million to more than 1000 unsecured creditors.

Max originally bought the block of land in north west Melbourne at the end of 2021.

It took 18 months for his land to be titled.

He employed Metricon Homes to complete the job but as the embattled builder stalled, six months ago, he decided to go with Porter Davis.

To rub salt in the wound, he signed and paid the tender document in February, just a month before Porter Davis collapsed.

He has now had to go with a third builder, all while paying both mortgage and rent.

“I’ve been busting my chops making all the right decisions (only then) getting the rug pulled from under me,” Max added.

He is paying $2000 per month in rent on top of a mortgage for the as yet unbuilt house.

Max is $23,000 out of pocket.

News.com.au previously spoke to Melbourne couple Ben Kucenko, 37 and his fiancee Steph, 33, who are among the impacted homeowners from the Porter Davis liquidation.

They signed a building contract in July last year with Porter Davis for a $320,000 home in Thornhill Park, with plans for their empty block of land to turn into a one storey, four-bedroom house.

And in a stroke of incredible bad luck, the pair were also involved in the collapse of another major Victorian builder in July last year, Snowdon Developments, which was court-ordered into liquidation and owed a whopping $28.6 million to unsecured creditors.

“Who can you trust to build your house?’ Mr Kucenko said at the time.

“We can’t believe this has happened again.

“We thought we would build with a reputable builder so we didn’t have to go through the same thing.

“It was kind of a shock to us.”

*Name withheld over privacy concerns.

[e-mail]