Cash and criticism on Porter Davis collapse

The State Government has announced refund scheme to cover some customer deposits as part of recent collapse of home builder Porter Davis.

At the same time a peak industry body had lashed the failed construction company for not taking out the required building insurance.

Both moves came last week, with the State Government seeking to cover Porter Davis customers left short due to lack of legally required building insurance the builder didn’t obtain.

“This one-off scheme is about making sure that hard-earned money of Porter Davis customers is refunded as quickly as possible and we’ll keep investigating the actions of Porter Davis to ensure this can’t happen again,” said Premier Daniel Andrews.

A State Government statement said about 560 customers had paid deposits for new homes, but Porter Davis had failed to take out the required insurance on the projects.

The refunds will be paid up to the legal maximum deposit payment of five per cent under the State’s Domestic Building Contracts Act.

In all the bill for the payments could run up to $15 million and Master Builders Victoria interim CEO Michaela Lihou said the conduct of Porter Davis was not reflective of the wider building industry.

“In making the announcement this morning, Premier Daniel Andrews described Porter Davis’s actions as ‘quite shameful’, thankfully we know very well that this is not representative of the whole industry,” she said.

Ms Lihou also lashed the management of Porter Davis for creating the situation more that 1000 customers fund themselves in.

“As a registered builder Porter Davis was aware of their obligations to lodge those insurance documents, which their customers had paid for in good faith, with the VMIA,” she said.

“For them not to follow such a basic procedure and leave hundreds of trusting families in the lurch is absolutely reprehensible.

“At a time when our members are facing many challenges and working hard to support their clients, their staff and their businesses, revelations like these about Porter Davis’s apparent disregard for their clients, unfairly taints our hard-working industry, which frankly deserves better.”

A domestic home builder, Porter Davis went bust in late March leaving 1500 homes in progress across Victoria and 200 in Queensland, with nearly 800 customers having signed signed contracts for new builds yet to start.

Grant Thornton Partners were appointed liquidators of the Porter Davis Homes Group with all construction stopping while the administrator sought to untangle the failed company’s finances.

A week later the administrators sought to find new builders to complete 250 homes at lock up stage.