Property owners caught up in the collapse of Porter Davis will lose their deposits as plans for their homes are held hostage.
Liquidators Grant Thornton on Tuesday hosted a webinar for Porter Davis customers that immediately ran into trouble as the meeting hit capacity and many were blocked from attending.
In a recording later published online, liquidator Said Jahani acknowledged frustration but urged customers to be patient, saying Grant Thornton should know within a week whether Porter Davis would be sold.
The plan was to find a builder or builders to take over contracts, Mr Jahani said.
“The reality is, we just don’t have the luxury of this process dragging out for weeks and months,” he said.
Liquidators hoped they could get customers’ homes built quicker than if they went through insurers, with both Queensland and Victoria having state-backed warranty insurance schemes.
However, there was no guarantee the process could be expedited, Mr Jahani said.
There were also some people without insurance.
They fell into a gap between paying Porter Davis a deposit and not having an insurance policy until weeks or months later when a permit was obtained, Mr Jahani said.
“At its extreme, it means you do not have any insurance cover and it means that the deposit you have paid has been lost,” he said.
The liquidators are trying to work with the Victorian Managed Insurance Authority (VMIA) and the Queensland Building and Construction Commission (QBCC) to see whether there is an alternative solution.
Generally, it wasn’t possible for customers to have deposits refunded and switch to another builder, Mr Jahani said.
Porter Davis also owned customers’ plans and designs as part of its intellectual property.
“We’re investigating whether there is an ability to allow customers access to their plans to allow them to at least complete their house,” Mr Jahani said.
The investigation would look into whether Porter Davis was trading while insolvent and if that meant customers had been wronged.
Delays were expected to be the least lengthy for about 240 customers.
Their properties were essentially ready to be handed over and liquidators were looking to have them sort out any remaining work and receive a certificate of occupancy.
Customers whose homes were either not yet started or at lock-up stage would have to get other builders, Mr Jahani said.
He condemned contractors accessing sites without written permission and said vandalising homes was effectively targeting its customers.
Reports have also circulated of builders targeting Porter Davis homes, with one going up in flames in Melbourne’s southeast on Monday.
It took fire crews 40 minutes to bring the blaze at Andante Crescent at Clyde under control. Police are investigating.
Grant Thornton has issued several notices to suppliers and contractors warning them of criminal liability for unauthorised site access.
The demise of Porter Davis affects an estimated 1500 properties in Victoria and 200 in Queensland.
Victorian Premier Daniel Andrews encouraged affected people to get in touch with the VMIA but noted mandatory insurance was capped at $500,000.
Authorities were looking into a cost escalation clause to amend this, he said.
The premier said reports Porter Davis baited customers with significant discounts when the company had no expectation it would be able to fulfil contracts were “troubling”.
Victorian Opposition Leader John Pesutto held a summit on Tuesday with home builder representatives who said more than 50 per cent of the industry was at risk of collapse.
In Queensland, where a homeowner has signed a fixed price contract and paid a deposit but work has not started on site, the state home warranty scheme administered by the QBCC will refund the homeowner.
However, any money paid before a building contract was signed could not be recovered under the scheme.
As of Tuesday, the QBCC had received 43 claims under the scheme, including 10 for return of deposits and 33 for non-completion.
-AAP
