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What to do to make a claim from a builder who has gone into liquidation?

Your house building contract should have clauses included for the eventuality of the builder becoming insolvent.

Once everything is secure you can work with your solicitor to formally terminate the contract and engaging a new builder to finish the work to the original plans.

The next step is to get all the information about the build together including:

  • The original contract documents including, The Drawings and, The Specification.
  • Evidence of all payments made.
  • Details of the Builders Insurance. The insurer should be mentioned in the Contract If you haven’t got details of the cover you should contact them and get a copy.
  • Any variations that you have requested.
  • Any increases of cost that the builder has notified you about, (for example Site Work Costs).
  • Copies of all council permits.
  • All other correspondence.
  • A record of how much work has been completed. As well as writing everything down takes lots of photographs.
  • Cost you have incurred,  such as paying fence rental.

Getting all this information together should help you, and your lawyer, in:

  1. Officially ending the old contract.
  2. Dealing with the building insurance (see your contract for details of the insurer) regarding assistance in completing the build.
  3. Organising a contract with a new builder to complete the works.

While you are getting the information you should try to keep in touch with your builders administrator to monitor the situation. If another builder wants to buy your builder’s business that could  be the quickest and easiest way to complete your house. [Source]


ASIC’s guide: Liquidation: a guide for creditors

Consumer Affairs


Insolvent builders and work over $16,000

You should be able to claim on the domestic building insurance policy (also known as builders warranty insurance) if the builder is insolvent. To make a claim:

  • lodge your claim within 180 days of becoming aware of the builder’s insolvency
  • contact the insurer to lodge a claim. If you do not have a copy of the policy or certificate of currency, the builder, building surveyor or local council may be able to provide it. If not, you can contact insurance companies that provide domestic building insurance to check whether they issued insurance for your building.

If your insolvent builder does not have domestic building insurance for work worth more than $16,000, contact us on 1300 55 75 59.

If the work required a building permit, seek legal advice on the building surveyor’s obligations to require a domestic building insurance (builders warranty insurance) certificate.



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