Barefoot Investor Scott Pape has given some stern advice to homeowners who were left devastated after the collapse of major building firm Porter Davis.
The building company went into liquidation last week, leaving more than 1,700 Victorian and Queensland homes in the lurch.
Liquidators Grant Thornton held a webinar for Porter Davis customers on Tuesday telling them they were trying to get new builders to take over their contracts.
Barefoot Investor Scott Pape (pictured) has recommended customers focus on ‘things you can control’ such as income and expenses
Thousands of families have been left devastated and questioning their future and whether they will ever be able to live in their dream homes.
One distraught customer, Colleen, wrote to the Barefoot Investor desperately asking for advice after she was left at her wit’s end.
She said the experience has left her ‘shocked, devastated, heartbroken, numb’.
Mr Pape shared some advice that would be difficult for some homeowners to hear warning them they will experience a difficult year ahead.
‘Expect it to suck for a good year, and possibly longer,’ he wrote.
‘You’ll be hit with increased rent, increased debt repayments, and increased costs to complete your home.’
‘And it’s going to take way too much time: it’ll take a few months to process your insurance warranty claim, but the real time-killer will be finding another builder to take over your project.’
Mr Pape said the pain would be amplified by the rising expenses and recommended homeowners to focus on ‘things you can control’.
‘So, focus on the things you can control: your income, your expenses, and the most important thing of all – your relationship – in what is going to be a very tough year for the both of you,’ he wrote.
He then referred to a comment from Hutchinson Builders chairman, Scott Hutchinson, about the dire situation for the nation’s building industry.
‘Current conditions are terrible. It’s ridiculous. I have never seen it like this,’ Mr Hutchinson told News Corp.
‘There will be more builders going broke. There’s nothing governments can do. People simply should not build…I don’t think there should be any private building.’
Mr Pape responded to the alarming comment, writing, ‘ That’s a bloody big call! Buyer (and builder) beware!’
Major building firm Porter Davis went into liquidation last week, leaving more than 1700 homes in the lurch (pictured, a partly finished home in Brisbane)
Grant Thornton liquidator Said Jahani urged customers in the webinar to be patient, saying the organisation would know within the week if Porter Davis would be sold.
‘The plan was to find a builder or builders who could step in and take over contracts,’ he said.
‘The reality is, we just don’t have the luxury of this process dragging out for weeks and months.’
Liquidators hoped they could get customers’ homes built quicker if they went through insurers, with both Queensland and Victoria having state-backed warranty insurance schemes.
But Mr Jahani added that there was ‘no guarantee the process could be expedited’.
To add to customer pain, he added that some people didn’t have insurance and could lose their deposit.
‘They fell into a gap between paying Porter Davis a deposit and not having an insurance policy until weeks or months later when a permit was obtained,’ he said.
‘At its extreme, it means you do not have any insurance cover, and it means that the deposit you have paid has been lost.’
About 240 customers have properties essentially ready to be handed over and liquidators were looking to quickly sort out any remaining work and receive a certificate of occupancy.
‘Remaining customers whose homes were either not yet started or at lock-up stage would have to get other builders,’ Mr Jahani said.
He added that Grant Thornton were looking into whether Porter Davis traded while insolvent and ‘if that meant they did wrong by customers’.
