Three builders have entered administration in recent months – Felmeri Builders & Developers Pty Ltd trading as Felmeri Homes, 7 Star Construction Pty Ltd and Qattro Built Pty Ltd.
South Australian builders by and large do the right thing, and the State Government continues to monitor and work with the sector through the state's consumer watchdog Consumer and Business Services (CBS).
We are also launching a consumer awareness campaign to help people who are starting to build understand their rights, and the steps they should take when they take on such a significant investment.
The campaign involves targeted social media posts and support to access easy to understand information about the practical steps consumers can take to protect themselves.
If you're building a home, it is important you ensure you are covered by building indemnity insurance (BII).
BII is mandatory for any construction project valued at more than $12,000 and insures people for up to $150,000 if their builder becomes insolvent, dies or disappears during construction or the warranty period. It is provided by QBE in South Australia and is underwritten by the State Government.
People are at financial risk if there's no insurance in place and any of the above occurs.
We've recently detected a small number of forged certificates and uninsured building projects so it is important that home-builders check their certificate on the QBE website.
Reputation is key in the building industry and a great way to find a reputable builder is by asking friends and family who they have built with and then checking to make sure they're licensed.
Consumers should carefully review the contract with any builder and not rely on verbal agreements. Any additional promises or variations should be recorded in writing and signed by both them and the builder.
If people are concerned about the speed of their build, they should talk to the builder in the first instance and if the reasons for delay don't seem reasonable or cause more worry, they should contact CBS for advice on 131 882.
As put by Andrea Michaels
Building a home is a major investment and it's been heartbreaking to see stories of people left in the lurch recently.
People who should've been celebrating building their dream home, have instead been left in nightmare scenarios and that's why we have launched this campaign.
We want to make sure South Australians know their rights and the steps they can take to protect themselves before they embark on building a home.
Whether it's something seemingly simple like checking to ensure a builder is licensed to do the job, or independently verifying the builder has taken out building indemnity insurance, there are many steps that can be taken to help people protect their investment.
Despite the challenges the sector has faced in recent years, I believe the South Australian construction industry has a strong future.
As put by Will Frogley, Chief Executive of Master Builders
There are so many good builders across SA delivering amazing homes for their customers and helping them move into the dream house right now, at reasonable prices.
But consumers should always do their homework before signing up. Make sure your builders is licensed. Ask them to show you examples of recently completed builds and supply customer references. Ask your friends and family for recommendations. Always make sure you're covered by Building Indemnity Insurance.
Despite all the publicity, SA's builder insolvency rate is among the lowest in the nation. The recent high profile recent insolvencies involved non-MBA member companies who were under-pricing work. If a builder quotes a job way cheaper than their competition that should be a red flag.
