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Government ‘ignored’ home builders’ warning: opposition

Porter Davis customers won't have pay for plans and other intellectual property of the bankrupt home builder. <i>Photo: AAP</i>

Porter Davis customers won't have pay for plans and other intellectual property of the bankrupt home builder. Photo: AAP

The Victorian government ignored a warning about insolvencies in the residential construction sector months before the Porter Davis collapse, the state opposition says.

In July last year the Department of Treasury and Finance briefed then housing minister Danny Pearson about insolvencies in the residential construction industry and options to minimise risks for customers, the opposition said.

Since then, more than 530 construction businesses in the state have become insolvent, including almost 150 specifically in residential construction.

Despite that, the Andrews government hasn’t enacted industry reforms, opposition spokeswoman for home ownership Jess Wilson said.

The briefing was revealed in documents obtained by the opposition through Freedom of Information laws.

“As a consequence of this mismanagement, potentially hundreds of hard-working Victorians are trapped with half-built homes or have lost their deposits and won’t have the insurance they are entitled to,” Ms Wilson said.

“Homebuyers who have lost deposits deserve to know why the Andrews government ignored options to better protect consumers.”

Premier Daniel Andrews on Tuesday accused the opposition of playing political games in the wake of the Porter Davis demise, saying he was instead focused on supporting those customers left heartbroken by the company’s collapse.

He said authorities had to properly diagnose the issues before the government could step in to help customers.

“I’ll make announcements soon and they will be meaningful, and they will be the government standing with those customers who have been treated appallingly,” Mr Andrews told reporters.

“Then, of course, we will take whatever action we can against anyone who’s done the wrong thing.

“There is a mounting case to demonstrate that there’s some people in that business who have done the wrong thing.”

Mr Andrews said the business falling over for the want of $35 million indicated something went deeply wrong.

Porter Davis homebuyers are asking why they weren’t insured as required by law, including Richard Williams, who lost his $40,000 deposit when the company went under.

Despite legislation in place to ensure he was insured, domestic building insurance was not taken out on his behalf, meaning there is no legal recourse to recoup his money.

It would have cost Porter Davis less than $1000 to insure his build.

It is estimated 800 families have lost on average between $30,000 and $50,000 simply because they were not insured.

The Victorian Building Authority is investigating whether Porter Davis may have breached any laws.

About 1700 homes across Victoria and Queensland were left in limbo when the company went into liquidation last month.

Liquidators Grant Thornton on Monday confirmed Nostra Property Group would complete up to 375 of the houses left in limbo after the Porter Davis collapse.

-AAP

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