Today, we're going to dive into a timely and unfortunate topic - the recent collapse of Porter Davis, one of the biggest builders in Australia. If you're planning to build a home, this news may have left you feeling uncertain and worried about the risks involved in working with a builder. But fear not, in this blog, we'll share five tips on how you can protect yourself when building with a builder.
When looking for a builder, it's crucial to ask for references from current clients who are currently building with the builder. This will give you firsthand insight into how the builder is performing, whether the process is going smoothly, if there are any delays or issues, and how responsive the builder is to client needs. Don't be afraid to ask lots of questions, as those who are currently building with the builder can provide valuable feedback based on their own experiences.
It may seem unconventional, but asking for a financial solvency declaration from the builder's accountant can provide reassurance that the builder is financially stable and meeting their obligations. This extra step can help you gauge the builder's financial health and mitigate the risk of working with a financially unstable builder. While some builders or accountants may push back, it's worth asking for this commitment to ensure peace of mind.
Builders typically provide builders warranty insurance during the construction process, but it's important to understand that this may not fully protect you if the builder goes into liquidation. As a creditor in the event of builder collapse, it can be challenging to recover your money. Research and understand what other insurance options may be available to protect yourself against such risks and ensure you have adequate coverage in place.
Builders' contracts are usually standardised, but it's wise to have a solicitor review the contract, especially if you're working with a smaller builder. A solicitor can help you understand the terms and conditions, including what happens in case of delays, cost overruns, or bankruptcy. This knowledge will empower you to make informed decisions and be prepared for worst-case scenarios.
Keep a close eye on the progress of your build and monitor it like a hawk. Visit the construction site regularly, if possible, and ensure that the builder is adhering to the timeline provided. This will help you stay informed about the progress of your build, identify any potential issues early on, and hold the builder accountable for meeting their commitments.
In conclusion, building a home with a builder can be a complex process with risks involved, as evident from recent events like the Porter Davis collapse. However, by taking proactive steps such as asking for references, requesting a financial solvency declaration, understanding insurance coverage, reviewing the contract with a solicitor, and monitoring the build closely, you can minimise the risks and protect yourself as much as possible. Remember, knowledge is power, and being informed and proactive can help you navigate the construction process with confidence.