FAILURE: Builder collapses have left hundreds of houses across Perth unfinished. Photo: Attila Csaszar

Government exposed by bust builders

Western Australia’s housing indemnity insurance scheme has been exposed by the collapse of two Perth-based builders, with the state government facing a $12 million cost and a rise in building insurance premiums expected as a result.


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Canberra ACT
My concern was back in 2013 The WA Building Commission had complainants about the Builder. And the complaints kept coming right up to April 2015. Where was the checks and balances there. We paid the Commission two amounts. Again another toothless Government Department .

Mount Lawley
WA's limit of $100,000 is totally inadequate. In Victoria where building costs are lower the cover is $300,000. We were building with Benchmark Designer Homes and $100,000 will not cover the cost of remedial work ($90,000) - poorly managed & unsupervised - we need to replace all retaining walls, strengthen roof, replace glazing etc - and the additional $70,000 above contract price other builders need to complete the house. Additionally all home indemnity claims are handled through QBE's Sydney & Melbourne offices. We have been waiting now for over 7 weeks to get a response to our claim. This is not acceptable ontop of the months of delays we have suffered with the failing builder. The other issue that needs to be addressed is the reluctance of the Building Regulator to intervene and challenge builders when home owners & tradies are approaching them with concerns that builders are potentially insolvent.

So what will happen regarding progress payments being claimed ahead of the value of the work completed?

As far as I understand the process, if that can be proven then that information needs to be taken to the Building Commission, which would then prosecute for breaches of the Home Building Contracts Act.

The requirement for builders indemnity demonstrates a lack of regulation within the industry.

I have to agree the building commission had so many complaints yet failed to do anything .Why bother having a commission a waste of taxpayers money as far as I'm concerned.I am still awaiting a reply from them asking WHY was FREELIFE allowed to continue trading fully knowing the number of complaints as well as having extreme serious liquidity problems. Surely some alarm bells must have gone off,obviously not

Try working for a commercial builder. As sub-contractors we have no security of payment in WA. We are lending large sums of money un guaranteed monthly to a variety of builders with no security. It is about time to WA Government introduced a security of payment system into the WA building industry as has been done in other states. If we demand personal guarantees from builders they just laugh at us and advise that there are plenty of other subbies willing to do the work payments un guaranteed. Even if they provide guarantees, they more often than not have there assets tied up under family names or in trusts.

I am not sure why the eastern staters are complaining theirs is a first resort scheme where maintenance and bad workmanship can be claimed. In Perth it is a last resort scheme where only in the circumstances where the builder goes in liquidation , disappears or dies can a claim be made. We tried unsuccessfully some years ago when this was realized that it could happen to start a self regulating scheme that was second to none the then labour government refused to help all except the larger project builders so as not to tarnish their protect the consumer and it's all too hard approach. Nothing has changed in the liberal government thinking as this should have been addressed by now but it's easier to force the insurer to provide the indemnity at inflated rates. For instance my company pays $2,950 for $100,000 cover per job. More chance of seeing the crutch on a low flying duck than it covering any insolvency even in small homes. Government needs to act now before the only insurer in this state says bye bye.

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