According to ASIC insolvency data, there were 2,975 building companies that entered external administration in 2023-24, representing some 27% of all insolvencies.

The collapse of Porter Davis on 31 March 2023, left some 1,700 homeowners across Queensland and Victoria having to deal with the fallout.

These are extremely sobering figures. The reality for homeowners is that they are often left dealing with liquidators without many options and faced with substantial losses.

What can you do if you suspect your builder is facing financial difficulty?

The Porter Davis liquidation in early 2023 put into sharp focus the practice of some builders taking deposits from owners before obtaining domestic building insurance for their work, insurance that helps to protect owners in the event of a builder’s insolvency.

In the case of Porter Davis, this practice left thousands of owners without insurance to recover the loss of their deposits, leading the State Government to implement a relief scheme to compensate home owners over $28 million, later extended to 20 February 2024 and expanded to other builders in liquidation.