Porter Davis Homes liquidation! How can property owners minimise losses if the project has been suspended?

What does it generally mean when a construction company goes into liquidation?

In Australia, when a company enters into official liquidation proceedings, it must immediately cease all operations and be controlled by a designated liquidator who manages its assets and liabilities, and sells assets to repay debts. If it’s a construction company that goes into liquidation, any contracts signed by the company will be considered unenforceable. This also means that the owner has no right to demand that the construction company completes the building project, and the project may come to a halt.

As a property owner, what can you do to minimise your losses in the event of a builder’s liquidation?

This depends on the specifics of the contract, but in general, a property owner can make a claim through the following ways:

• register as an unsecured creditor with the liquidator of the builder;
• make a claim with the builder’s insurance company;
• seek legal advice to review the contract and determine whether payments should have been held in trust or have already been paid to the developer. If the payments were held in trust, they can be recovered; and
• engage a lawyer to negotiate with the liquidator to continue the construction.

Source: https://www.consumer.vic.gov.au/products-and-services/refunds-repairs-and-returns/insolvency