Evan Mulholland calls on Allan Govt to help

Victorian homebuyers continue to be let down with revelations dozens of clients of the recently collapsed Montego Homes have been left stranded without compulsory domestic building insurance (DBI).

Nearly a year since the collapse of Porter Davis (in March 2023) revealed widespread non-compliance with Victoria’s DBI requirements, the same practice continues to occur in a clear regulatory failure under the Allan Government.

Under existing Victorian legislation, no money, including deposit money, is payable under a domestic building contract before a suitable DBI policy has been issued.

In Victoria, all deposits of $16,000 or above must have the DBI cover bought by the builder.

That is mandatory. But it appears, builders like Montego do not see it that way and the compliance authorities are fast asleep at the wheel, leaving many mum and dad with young families and young couples planning to have a life in their dream home, completely shattered and helpless.

The Allan Government’s Liquidated Builders Customer Support Payment Scheme for victims of the Porter Davis collapse (which was expanded to include all builders – including Hallbury Homes and Snowdon Developments, who failed to take out compulsory insurance – following advocacy from the Victorian Liberals and Nationals) only applies for homebuilder insolvencies which occurred during the 2022-23 financial year.

That support program closed on January 29. As such, victims of Montego Homes are excluded from this scheme despite suffering the same failure of DBI compliance and enforcement as Victorians with Porter Davis and other homebuilders.

The state Opposition has called on the Allan Government to extend the homebuilder collapse support scheme until Victorians can have confidence DBI requirements are being met and that regulators are effectively identifying non-compliance prior to insolvencies occurring.

Shadow Minister for Home Ownership and Housing Affordability, Evan Mulholland, said: “Porter Davis should have been a wake-up call for Labor but the serious issues with domestic building insurance non-compliance clearly have not been addressed.

“No Victorian should lose a home deposit because of Labor’s incompetence. Jacinta Allan must commit to extending the support scheme until the issues plaguing domestic building insurance are resolved.”  

Shadow Minister for Planning, James Newbury, said: “It’s clear that Jacinta Allan and her Government aren’t doing enough to protect Victorians and their families from rogues.  

“Buying a home is tough. New homebuyers shouldn’t also be fearful of a building company collapsing, and losing hard earned deposits, because the State Labor Government isn’t strong enough to stand up to dodgy behaviour.”

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