Ask RiotACT: Builder insolvent at final stage – would a new builder take over?

Ursula 22 November 2016 6
Ask RiotACT

Hi Rioters.

We have just learnt that our custom house builder is insolvent, with about 10% work left to go on our house. I wonder if anyone has had this experience (it is Canberra right?) and if they were able to find a new builder to take over at such a late stage (without having to pay them sums vastly in excess of the Max insurance pay out to get them to take it on?). Or is it better to try and manage the remainder of the project ourselves? Problem with that being I assume we’d have to lodge application for occupancy certificate as owner builders and whether that means we’d be liable for defects if we sold within 10(?) years. Any first-hand experiences appreciated.

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6 Responses to Ask RiotACT: Builder insolvent at final stage – would a new builder take over?
Here to Help Here to Help 10:43 am 27 Nov 16

Hi Ursula, I would be glad to have a look at your situation and help you and anyone else affected in anyway I can. I am an experienced local builder servicing ACT & NSW.
Brett Skinner
Master Homes

wildturkeycanoe wildturkeycanoe 7:20 am 25 Nov 16

Are there not insurances that cover this kind of circumstance? If not, perhaps there should be.

Eule B Wright Eule B Wright 9:29 pm 24 Nov 16

It might seem like a very stressful situation but what’s vital to remember is a builder is nothing more than a project manager who earns their money by charging a markup on his expenses. They organise and manage the build by subcontracting out to other tradies, like electricians, plumbers, bricklayers, etc.

10% of a build isn’t much – it’s probably just fitout, painting, etc. What I would do is list out everything outstanding that’s required and speak to reputable building companies. Also, by law in ACT, certain steps of every build must be independently certified by a building certifier. You should speak to your certifier as well to get copies of these. Your new builder will certainly want to see.

mikal mikal 11:32 am 24 Nov 16

This happened to us too. I’d be very surprised if a builder would take on a job in this state — the risk is too high.

In the end we approached each individual sub-contractor and negotiated directly with them for the job to be finished. I think we were lucky, but we ended up getting the sparky and plumber back.

You’ll also need signoff paperwork at the end to get a Certificate of Occupancy (a requirement for home insurance). That requires the builder to sign some stuff, which might be hard if they’ve done a runner.

Good luck.

John Moulis John Moulis 9:47 am 24 Nov 16

I don’t know whether it is your builder but the news came thru early on Wednesday morning that Today’s Homes had gone into liquidation. Just before 1PM the same day 2CC played an ad for Ziggy’s Fruit and Veg at Fyshwick Markets containing a third party endorsement from Today’s Homes. Judging by their past form this isn’t surprising. 2CC were still playing ads mentioning winter during the second week of October.

Holden Caulfield Holden Caulfield 8:02 am 24 Nov 16

Sadly, I’ve been down this road.

Most banks don’t approve loans to owner builders, so you may need to investigate that first.

My reno project was only about 50% complete and a new builder did take on the project. It did cost more money. A lot more money. But as there was no chance of recouping the funds from the original builder the only achieveable result was to focus on finishing and thanking my lucky stars that the financial side could be covered, if not recovered.

I feel your pain and as much as they were totally useless in my situation, I would suggest talking with the MBA or HIA to seek some advice and hopefully a builder to assist you.

Good luck.

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