State government extends compensation scheme following the collapse of Montego Homes

After more than a month of uncertainty, landowners at one Mount Duneed estate are celebrating after the state government announced it would compensate them following the collapse of their builder.

The state government has come to the rescue of Chantelle Gizycki and other landowners at the Dalgona at Duneed estate in Mount Duneed. Picture: Brad Fleet.

Mount Duneed landowners are breathing a collective sigh of relief after the state government came to the party and committed to compensating them following the collapse of their builder.

Chantelle Gizycki was one of 12 parties affected within the Dalgona at Duneed estate, located on the northern edge of Whites Rd, after Montego Homes went into liquidation last month.

Ms Gizycki, 29, paid a $15,000 deposit to Montego only to learn upon its collapse that the company had not taken out domestic building insurance despite legal requirements to do so.

The state government announced on Wednesday that it had extended a compensation scheme it established following last year’s collapse of Porter Davis, which impacted around 500 people.

The announcement comes after the Geelong Advertiser highlighted the plight of many first homebuyers at Dalgona.

“I’m just ecstatic,” Ms Gizycki said.

“It’s a massive weight off my shoulders and I finally feel like I can move forward … I can start talking to other building companies now.

“I’m just so happy for everyone else who was impacted as well, because I know a lot of them were considering selling their block (of land) before this (government) decision was made.”

Assistant Treasurer Danny Pearson said the government was supporting people who were left stranded through no fault of their own.

The expanded scheme now covers customers of builders that went into liquidation from July 1 last year though to February 20 – the day Montego went bust.

Victoria’s Assistant Treasurer Danny Pearson (right). Picture: Andrew Henshaw.

New offences recently introduced into the Domestic Building Contracts Act means that if a builder receives a deposit for a domestic building contract without holding the required insurance, the company could be penalised up to $480,000.

Mr Pearson said these were the first of a suite of reforms Labor would deliver to ensure Victorians could build or renovate with confidence.

The law requires builders to take out insurance for any contract above $16,000.

“We urge all customers to check that their builder has taken out insurance, as all builders are obliged to, through the Victorian Managed Insurance Authority policy checker,” Mr Pearson said.

Opposition spokesman for home ownership and housing affordability Evan Mulholland welcomed the government’s “belated” move.

He said the compensation scheme should continue until the public can have confidence that the laws will be enforced.

“Homebuyers looking to purchase shouldn’t face uncertainty, and families already impacted must have their claims processed as a matter of urgency,” he said.

The Victorian Building Authority has suspended the registration of Montego director Todd Searle while it investigates claims that almost $900,000 worth of deposits were paid without any domestic building insurance being obtained.

Originally published as State government extends compensation scheme following the collapse of Montego Homes