Builder took your deposit or went into liquidation? What to do in Victoria

General information for Victorian homeowners · ORLA Connect

It is one of the most common building problems in Victoria right now: a deposit paid, little or no work done, and a builder who has stalled, folded or gone into liquidation. If that’s happened to you, here’s how it generally works — and what to do first.

First, if work has stopped

Put your concerns to the builder in writing and keep every record — the contract, receipts, photos, emails and any progress-payment schedule. Don’t pay further progress claims for work that hasn’t been done. Strict notice steps often apply before you can take action, so getting the wording right early protects your position.

Domestic Building Insurance (DBI) — your safety net

Most domestic building work in Victoria over the insurance threshold must carry Domestic Building Insurance (also called builders warranty insurance), provided through the VMIA. It is “last-resort” cover: it can respond where the builder has died, disappeared or become insolvent, helping with non-completion and certain defects. Check your contract and certificate — you should have been given a DBI certificate for work over the threshold.

If the builder is in liquidation

Once a builder is insolvent, a DBI claim is often the main path to finish the home or fix defects. You may also lodge a proof of debt with the liquidator, though unsecured creditors frequently recover little. Acting quickly matters, because insurance and claim deadlines can be short and evidence is easier to gather early.

Deposits — what the law allows

Victorian domestic building contracts cap deposits — generally 5% where the contract price is over $20,000 (higher for small contracts). If a builder has taken an excessive deposit, or taken a deposit and done nothing, you may have grounds to recover money. A lawyer can tell you quickly whether the contract and conduct give you a claim.

Time limits — act early

Building actions in Victoria generally must start within 10 years of the occupancy permit or certificate of final inspection, and DBI claims have their own time limits. Because deadlines tighten once a builder is insolvent, it’s best to get advice as soon as a problem appears.

How to get help the easy way

You don’t have to work out who to call. Post your matter on ORLA Connect and up to four verified Victorian building-dispute lawyers review it and reply with how they can help and their fees. It’s free to post, private, and there’s no obligation to proceed.

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Common questions

This article is general information only and is not legal advice. Building law and insurance deadlines can be strict — for advice about your situation, post your matter and a matched Victorian law firm can help.