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AAP
AAP
Business
Cassandra Morgan and Tara Cosoleto

Premier backs call to not bail out beleaguered builder

Refusing to rescue collapsed building company Porter Davis was the right call, says Premier Daniel Andrews as the Victorian government investigates whether the firm left customers uninsured.

The builder went into liquidation last week, leaving clients desperately seeking answers and more than 1700 Victorian and Queensland homes in limbo.

Mr Andrews confirmed on Thursday that Treasurer Tim Pallas had spoken to Porter Davis but chosen not to proceed with a bailout.

"We've made the right call here," he said.

"If the bank is not prepared to fund you because your fundamentals are just not there, then I don't know that would be a business that the Victorian government would want to bail out."

Mr Andrews did not rule out supporting affected customers, saying options were being assessed.

But Opposition Leader John Pesutto has criticised the government's actions, saying it did not take steps to prevent the collapse.

"It's always better and easier to deal with a company in a state of distress before it goes into liquidation," he said.

Liquidators Grant Thornton confirmed more than 250 affected properties would be capable of completion given how close they were to being finished.

"For those customers where Porter Davis is unable to offer handover under the current contract, we expect to be in a position to introduce them to replacement builders within the coming week," the liquidators told AAP on Thursday.

The Victorian government is also investigating whether Porter Davis illegally left customers uninsured after taking their deposits.

Builders in Victoria have to buy domestic building insurance policies on behalf of home owners before they take deposits or money for projects of more than $16,000.

The requirement falls under the Domestic Building Insurance Ministerial Order.

"We are looking at that actively," Mr Andrews said.

"I just want to remind everybody in this industry, the law applies to everyone. It's not a matter of choosing to lodge those insurance premiums."

Grant Thornton liquidator Said Jahani told a customer webinar earlier this week some clients might be without insurance, as they fell into a gap between paying the deposit and waiting for their permit to be obtained.

Melbourne resident Eric Poon, 33, says he is among those customers without insurance but argues the suggestion some people fell through the gap is an attempt to rationalise the home builder's actions.

He and wife Abby Zhong paid the deposit for their Porter Davis home at Lilydale in outer Melbourne in December 2020 but the land was only titled last week because of delays by a developer in handing over the property.

Porter Davis told the couple it would arrange insurance for them but when they contacted the firm after its demise, they were told they didn't have a policy, Mr Poon said.

The Victorian Managed Insurance Authority could not find an insurance policy in Mr Poon's name and the couple faces paying off two mortgages - which includes their residence at Glen Waverley - after interest rates skyrocketed.

"This has put a considerable financial strain on us," Mr Poon told AAP.

"We were hoping to complete the construction of our new home as soon as possible so that we could rent out our current apartment and generate some cashflow."

He was also concerned about allegations Porter Davis was trading while insolvent and said the government should care for people whose livelihoods were put at risk by the collapse of building companies.

"We are already dealing with a rental and building shortage crisis and now consumers don't feel protected and are afraid to build," Mr Poon said.

Porter Davis customers unsure if they have domestic building insurance can contact the Victorian Managed Insurance Authority, which is dealing with claims in the state.

Other firms also offer domestic building insurance.

The Queensland Building and Construction Commission is dealing with claims from the Porter Davis fallout, with about 200 properties in Queensland estimated to be affected.

Those without a certificate of insurance should contact liquidators Grant Thornton.

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