The State Government will extend the Liquidated Builders Customer Support Payment Scheme to support Victorians whose builders became insolvent without taking out insurance on their behalf – as required by law.
Around 100 extra Victorians may be eligible for payments, joining former customers of Porter Davis Homes who were left without Domestic Building Insurance, DBI.
The expanded scheme will be for customers of builders that entered liquidation this financial year – from July 1 2023 up until February 20 2024 – including Montego Homes customers.
All builders should understand the extension is occurring under special circumstances and will be funded through the previously announced $13.55 million support package.
The Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023 ensures consumers are covered by insurance before providing any money to a builder under a contract for domestic building work costing more than $16,000.
Under new offences introduced last month into the Domestic Building Contracts Act 1995 – if a builder receives money under a Major Domestic Building Contract without holding the required domestic building insurance, a penalty of up to $96,000 for an individual or $480,000 for a company.
The new offences are the first in a suite of reforms the State Government will deliver to ensure Victorians can build or renovate with confidence.
Assistant Treasurer Danny Pearson urged all customers to check their builder had taken out insurance – as all builders are obliged to – through the Victorian Managed Insurance Authority, VMIA, policy checker.
“We are supporting families who have been left stranded through no fault of their own – and putting builders on notice: new penalties apply to individuals and companies who fail to take out Domestic Building Insurance,” he said.
The Review reported on the Montego Homes collapse before the announcement, recording more than 60 homeowners in Melbourne’s growing corridors facing financial distress when its buyers failed to take out DBI’s.
Customer victim Jessica Rodriguez organised a petition, requesting the State Government to extend the payment scheme for Montego Homes and Chatham Homes customers after Montego Homes fell into voluntary administration on January 15, 2024.
The payment scheme was launched in July 2023 to extend the existing scheme – Porter Davis Homes Customer Support Payment Scheme – but it meant Montego Homes customers were not eligible as it was after the financial year.
The Opposition leadership team were also calling on the State Government on behalf of the victims, some who they had met in Doreen last month while hearing from City of Whittlesea council and groups on growth challenges in the region.
Shadow Minister for Home Ownership and Housing Affordability Evan Mulholland said the expansion was a ‘welcome albeit move’ by the State Government, however the scheme shouldn’t cease until Victorians can have confidence that DBI compliance would be reinforced.
“Homebuyers looking to purchase shouldn’t face uncertainty, and families already impacted must have their claims processed as a matter of urgency,” he said.
Applications for the extended scheme are expected to open in coming weeks.
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