By Mikayla van Loon
The State government has announced it will pay compensation to clients of Porter Davis who were without insurance when the home builder went under.
This news on Thursday 20 April came as welcome relief to those who had invested time, money and energy into building what was meant to be their dream homes.
Eric Poon, a customer of Porter Davis who had intended to build his home in Lilydale, lost his deposit because the company had not taken out Domestic Building Insurance (DBI), a breach of its obligations.
“I am genuinely delighted with this decision, as it addresses an urgent issue and provides much-needed relief for affected customers like myself,” he said.
“This support feels reasonable given that we invested in a service that we never received.”
Relieved by the government’s decision, Mr Poon said it made up for some of what was lost but there is still a gap in what he as a client now has to pay.
“We are now facing higher costs, as renegotiating a new construction contract comes with a 20 per cent increase in comparison to the original Porter Davis agreement,” he said.
“The time wasted in this process is an additional burden, but I understand that ‘it is what it is’.”
Payments will be made up to the legal maximum deposit amount within the Domestic Building Contracts Act of five per cent.
As one of over 500 people in the same situation, Mr Poon said it did come at a time when many were at a loss, in both confidence and a financial standpoint.
“The government’s intervention in this case has restored some people’s confidence, providing a vital boost for those hesitant to build a home amidst the current housing shortage.”
Under the compensation scheme, payments will now ensure clients who had signed contracts but were without DBI to be treated as if they had been covered by Porter Davis.
Premier Daniel Andrews said the government would set up a one-off relief compensation scheme for customers to be able to access within 48 hours of the announcement.
“This one-off scheme is about making sure that hard-earned money of Porter Davis customers is refunded as quickly as possible and we’ll keep investigating the actions of Porter Davis to ensure this can’t happen again,” he said.
The government has confirmed authorities are investigating the collapse of Porter Davis, with results of the findings said to inform and guide potential future reforms.
This was supported by Mr Poon, who said he believes it should “investigate if any wrongdoing or legal violations occurred” to hold “those responsible accountable”.
“I also suggest implementing stronger regulations and insurance coverage to protect consumers in the future,” Mr Poon said.
Mr Poon urged the Victorian Managed Insurance Authority (VMIA) to fast track payments as quickly as possible “as many of us urgently need the funds to settle their properties”.
The Department of Government Services will work with the VMIA to vet and approve claims.
