Porter Davis customers who paid deposits but were left without insurance when the home builder collapsed will get some of their money back, as part of a $15m support package announced by the Victorian government.
Porter Davis went into liquidation last month, leaving some 1,700 homes in Victoria and Queensland unfinished.
In Victoria, the building watchdog is currently investigating whether the company broke the law by not taking out domestic building policy insurance for customers when they received their deposits. These homes had not started at the time the company entered liquidation.
The state’s premier, Daniel Andrews, on Thursday said the government estimates about 560 families lost their deposits due to the failure of the company to take out insurance cover on their behalf.
He said these families will be able to apply for a one-off compensation payment from the government, in a package he expects will total about $15m.
“[These are] people who have worked hard, people who have saved up their money, they’ve gone to the bank, they’ve got all their approvals. This is years in the making for a lot of people, and it’s the biggest purchase in their life,” Andrews told reporters.
These customers will be refunded their deposits up to 5% of the purchase price, as they would have if the insurance was in place, which averages out to about $25,000 per family. A website will be set up through the Victorian Managed Insurance Authority in the next 48 hours, with details for those who are affected.
The package does not include properties already under construction, with plans underway to see if that work can be picked up by another builder.
On Monday, liquidators Grant Thornton confirmed Nostra Property Group had entered into a sales agreement for Porter Davis’s multiple dwelling business. The company will complete up to 375 townhouses, 169 of which haven’t been started yet, as well as offer ongoing employment to 16 Porter Davis staff.
Andrews said authorities are investigating the actions of Porter Davis leading up to the company’s collapse to establish exactly what happened and guide potential future reforms to protect consumers.
He did not rule going after individuals responsible, given the company would likely be unable to pay fines if found to have breached the law.
“We’re going to make sure there are consequences for people who I think – on any reasonable measure – have done the wrong thing here. They’ve had such little regard, such contempt for their customers, that they’ve left them in this position,” Andrews said.
“It’s shameful. It’s absolutely disgraceful. We’re not going to leave these people short.”
