What To Do If Your Builder Goes Bankrupt (Melbourne Guide)

Having your builder go bankrupt or into liquidation part way through your project is one of the most stressful situations a homeowner can face.

With your home left incomplete and uncertainty around what happens next, it's important to understand your options and take the right steps quickly.

What Happens When a Builder Goes Bankrupt?

When a builder becomes insolvent or goes into liquidation:

• All construction work typically stops immediately
• Contracts are usually terminated
• Access to the site may be restricted
• You may be left with incomplete or defective work

At this point, your project needs to be assessed before any further work can continue.

Step 1 – Secure the Site

Your first priority should be to:

• Secure the property
• Ensure it is safe and weatherproof
• Prevent further damage or deterioration

This is especially important if the home is exposed or partially constructed.

Step 2 – Review Your Contract & Insurance

In Victoria, most residential building works are covered under Domestic Building Insurance (DBI).

You should:

• Review your building contract
• Contact your insurer
• Lodge a claim if applicable

DBI may cover the cost of completing the project or rectifying defective work.

Step 3 – Assess the Existing Works

Before engaging a new builder, it is critical to:

• Inspect the current state of construction
• Identify incomplete works
• Identify defects or non-compliant works

This ensures that any new builder can safely take over the project.

Step 4 – Engage a Builder to Take Over the Project

Once the project has been assessed, you can engage a builder to:

• Take over the incomplete works
• Rectify any defects
• Complete the project

Challenges With Builder Takeovers

Taking over a project is more complex than starting fresh. It often involves:

• Unknown workmanship quality
• Compliance risks
• Structural concerns
• Reworking existing construction

This is why it's important to engage an experienced builder who understands the complexities of incomplete projects. Learn more about our builder takeover service in Melbourne.

How Brownlow Building Can Help

Brownlow Building specialises in:

• Taking over incomplete builds
• Assessing defective works
• Completing projects to a compliant standard

We provide clear scopes of work and guide homeowners through the process of getting their project back on track.

Frequently Asked Questions

What should I do immediately if my builder goes bankrupt?

Secure the site and contact your insurer. Do not allow any further work to commence until the existing works have been properly assessed.

Can I hire another builder straight away?

Yes, but the project must first be assessed. A new builder will need to inspect the existing works, identify defects or compliance issues, and prepare a scope of works before continuing.

Does DBI cover builder insolvency in Victoria?

Yes. Domestic Building Insurance (DBI) in Victoria provides coverage when a registered builder becomes insolvent, dies, or disappears — and works remain incomplete or are defective. Contact the Victorian Building Authority for further guidance.

Need Help Completing Your Project?

If your builder has gone into liquidation and your home has been left incomplete, contact Brownlow Building to arrange an assessment and discuss how we can complete your project.

Related reading: Building Defect Repairs Melbourne · Cost of Building Rectification · Signs Your Home Has Building Defects