We get asked these questions every week. Here are honest answers from Morris Terzo of Jim’s Building Inspections and Jim’s Construction on what to do if your builder goes out of business. This article covers 5 of the most common questions about stalled home builds, builder selection, and getting a project moving again.
Watch the video above, or keep reading for the full Q&A.
What brings you to this project?
Morris Terzo got involved because he lives in the same court, knew the owners, and saw the Porter Davis build freeze when the liquidation hit.
He says he had already done development work in the same area, so he noticed straight away when the job stopped. Because he knew the owners, he stepped in and completed an inspection so it could be submitted to the Victorian Managed Insurance Authority, or VMIA, for a claim. He says the assessors later came out and mostly agreed with his report, but still refused to put a figure on the claim.
That left the owners in a rough spot. They did not know whether the insurance was worth $10,000 or $120,000, and they still had to finish the house somehow. At the same time, they were renting elsewhere for $600 a week while the unfinished property coped with weather, vandalism, and theft.
Morris says the only practical move was to restart the job while the fight with VMIA continued. That meant reactivating the building permit, reactivating the NAB loan, and moving forward on a cost-plus basis. He has spoken about this same kind of stalled-build recovery in this rescue mission with Jim’s Construction.
What steps should be taken if your builder goes out of business?
Get an independent inspection done straight away so you know exactly what is incomplete, what defects exist, and what work is still left. That gives you something concrete to use with the insurer, the bank, and any builder brought in to restart the project.
Morris says the first move should be to contact someone like Jim’s Building Inspections and organise what may be called a stop-work inspection or defect inspection. The point is not paperwork for the sake of paperwork. The point is to establish where the build stands, what is unfinished, and what needs fixing before anyone can sensibly move forward.
That report can then be used to deal with the insurer and the lender, and to get the home back on track. If you need to understand what that process normally covers, this guide on a proper building inspection is a useful starting point.
Morris also makes the point that some homeowners may have already logged defects but still have no figure from VMIA. In those cases, the next step is not to sit and wait forever. Get advice, push the claim, and work out what has to happen next so funds can start flowing and the home can be completed.
What key considerations should one keep in mind when selecting a builder?
Morris says one of the biggest considerations right now is how the contract is structured, and in many cases, he would lean towards cost-plus.
His reasoning is simple. On larger or more complex jobs, especially where market pricing is unstable, it can be hard to lock in a realistic final cost upfront. Morris says many builders in his network are now using cost-plus contracts for multi-million dollar homes, and that you can technically use them for builds over a million dollars or where pricing is too hard to quantify at the start.
He describes cost plus as an open-book approach. You agree on the builder’s percentage, and the client can still have input into who gets picked based on price, timing, and what keeps the job moving. In his view, that gives people a clearer sense of value for money than pretending a fixed price will hold when the market is moving all over the place.
He also points to the numbers on this project. He says the Porter Davis rate on this home was around $13,000, $14,000 a square, and that current pricing is now at least double that. His message is blunt: clients need to understand how hard it is to price some projects properly in the current market.
How to choose a high-quality builder?
Do not choose a builder based on size, branding, or warranty insurance alone. Meet them, review their track record, check the contract properly, and go deeper than the sales pitch.
Morris uses Porter Davis and Metricon as examples of why scale does not guarantee safety. He says people often assume a big builder with insurance and strong backing must be the safe option, but recent failures show that is not enough on its own. He also says warranty insurance should not be treated as proof that a builder is the right fit, because he has seen builders with large warranty cover who still should not have had it.
His advice is to get more depth into the decision. Meet the builder. Go through their resume. Look at what they have built before. Ask about timing. Check the quality of their past work. Speak to trades who have worked for them, because those trades will quickly tell you whether the builder pays properly and runs jobs well.
Morris also says oversight matters. In the Jim’s system, he points to expectations set by Jim’s Group services and says he personally looks over builder selection and contract structure where needed, so the job is feasible and does not end up buried in endless variations and arguments. For homeowners, the broader point is clear: do not treat builder selection like ordering a product off a shelf. Slow down and assess the framework around the job, not just the brochure.
What feedback did you get from the client?
Morris says the feedback from Matt and Sarah has been positive because they can finally see things moving again.
He says the money from VMIA still has not landed, but the important shift is that progress has restarted. The owners are now able to put their own input into the job. Morris describes them dropping by on the weekend while painting was happening, with mates involved in parts of the work, including painters and plasterers.
That matters because the emotional side of a stalled build is real. Before that, they were just driving past the house and looking at it sitting there. Now, in Morris’s words, they have taken possession of their home again and feel ownership over it.
If you are stuck in a similar position, the clearest next step is to contact the Jim’s Group team or call 131 546 and ask for building inspections if you need an inspection, or construction if you need help getting the project moving again.