Builder in Administration Mid-Build: Your Loan, Warranty and Options
Construction Finance
Builder administration · Construction loan · Home warranty
Your builder has appointed administrators and the site has gone quiet. This guide starts with the first 48 hours, then follows the whole problem: your construction loan, the administrator and proof of debt, home warranty in every Australian state and territory, site evidence and insurance, a DOCA or replacement builder, building-permit and certifier changes, the lender's restart conditions, the cost-to-complete gap and what happens if the waiting period leaves you paying rent and loan interest at the same time.
Quick Answer
When a builder enters administration and work stops, tell your construction lender immediately and ask it to hold any unpaid progress claim. You still owe the amount already drawn and interest normally keeps running. Further draws are usually paused while the lender confirms whether the existing builder will resume, what warranty or indemnity cover applies, what the unfinished work will cost and how any shortfall will be funded.
If a replacement builder is needed, expect the lender to require an independent cost to complete, an acceptable fixed-price completion contract and evidence that the funding gap is covered before draws restart. Stop non-essential payments, preserve the site and talk to us about your build before you commit to a new price or builder.
Also called: builder insolvency, builder collapse, builder going bust.
What should you do first if your builder goes into administration?
If your builder goes into administration mid-build, stop non-essential payments, tell your lender, lodge details of your claim with the administrator, find your contract date and certificate of cover, and secure and document the site. Contact the warranty insurer or scheme early and ask whether it wants an inspection before anything is disturbed. Then get an independent cost to complete and legal advice before you sign a higher-price offer, appoint a replacement builder, pay a supplier directly or terminate anything.
Your first steps, in order
- Confirm the appointment. Administrators must advertise creditors' meetings on ASIC's Published notices website, so check who was appointed and when.
- Stop non-essential payments and tell your lender. Ask the lender to hold any progress claim it has not yet paid. Do not pay the administrator, a supplier or a new builder merely to get the site moving until the payment has been checked against your contract, warranty position and lender requirements. In Victoria, Consumer Affairs Victoria warns that home warranty may not cover work you pay for before it is completed.
- Lodge your claim with the administrator. You must lodge details of your claim before you can vote at a creditors' meeting.
- Find your contract date and certificate of cover. Your state and the date you signed decide whether home warranty responds. In NSW, icare says the period of insurance for incomplete work is 12 months from when work stopped, and lodging a Notification of Loss form within that period protects your right to claim.
- Secure, photograph and insure the site. Take dated photos and video, make an inventory of materials and equipment, ask the administrator in writing whether the builder's contract works insurance is still in force, and ask your own insurer what it covers on a part-built home. Ask the warranty insurer whether it needs to inspect before non-urgent work restarts.
- Do not let anything leave the site unchecked. If a subcontractor or supplier asks you for payment or wants to remove materials or equipment, get legal advice before you pay or let anything go.
- Get legal advice before you terminate. A contract signed on or after 1 July 2018 generally cannot be ended merely because the builder is in administration.
- Get an independent cost to complete. It is the number your lender, your insurer and any replacement builder will work from.
While a company is in voluntary administration, unsecured creditors cannot begin or continue claims against it without the administrator's consent or the court's permission (ASIC INFO 74, updated 17 December 2024, read 23 September 2026). General information only, not legal advice.
What should you do in the first 48 hours?
The first 48 hours are about freezing avoidable loss and preserving your options, not choosing the replacement builder. Tell the lender and warranty insurer or scheme, document the site, identify who now controls the building company, and find out what can and cannot be touched before an inspection. The replacement-builder and funding decisions come after you know what you are replacing and what money is actually available.
Scroll the table sideways to see every column.
| When | Action | Why it matters |
|---|---|---|
| Immediately | Confirm the appointment, tell the lender and ask it to hold any unpaid progress claim. | It stops a payment being released into a position the lender has not assessed. |
| Same day | Contact the warranty insurer or scheme, photograph the site and ask whether it needs an inspection before work is disturbed. | A later claim can depend on what was incomplete, defective, exposed or already paid for. |
| Same day | Secure the site, confirm current insurance and make an inventory of materials, appliances, fixtures and equipment. | The site can deteriorate or be stripped while the legal and insurance position is still being worked out. |
| Within 48 hours | Gather the contract, variations, progress claims, receipts, permit or approval, warranty certificate, loan statement and administrator correspondence. | The administrator, insurer, lender, certifier and replacement builder will all ask for overlapping parts of the same pack. |
| Within 48 hours | Ask the administrator for the proof-of-debt process and whether the existing builder intends to continue, sell or novate contracts, or propose a DOCA. | You need to know whether the path is a resumed contract or a replacement build before you price finance. |
How do you know if your builder has gone into administration?
You can check whether your builder has gone into administration on ASIC's Published notices website, where administrators must advertise creditors' meetings, and on your state building regulator's licence register, which shows the builder's licence status. With smaller builders the first sign is often quieter than a notice: calls go unanswered and nobody turns up on site. If that happens, check both registers before you approve another progress claim. For how a lender pays each claim, see how progress claims and drawdowns work.
What if you paid a progress claim before the work was actually complete?
If you paid ahead of the work, separate that payment from the value actually delivered. An early or unsupported progress payment can leave you with both an insolvency claim against the builder and a separate insurance question. In NSW, current government guidance says consumers should make only authorised progress payments and warns that an additional or early payment may affect recovery under home building compensation cover. Other jurisdictions have their own rules, so keep the contract stage, invoice, lender inspection, bank transfer and dated site evidence together rather than assuming the insurer will treat every payment the same.
Source example: NSW Government, Protecting yourself in case of builder insolvency, updated 1 September 2026, read 23 September 2026. NSW only. Other jurisdictions differ.How do you work out what the failed builder may owe you?
Start with a payment-by-payment reconciliation, not the original contract balance. Match every deposit, progress claim and variation payment to work properly completed or materials you can prove are yours and can still be used. Then identify any unmatched payment, separately evidenced rectification cost and other contractual loss. That gives you a working evidence figure to discuss with the administrator, insurer and your lawyer. It is not automatically the amount an administrator will admit as a debt or the amount an insurer will pay.
ASIC says a creditor must lodge details of the debt or claim to vote in a voluntary administration and the administrator will usually provide a proof-of-debt form. Keep the building contract, variations, invoices, receipts, bank transfers, progress-claim inspections, site photos, defects reports and any independent cost or value assessment. If the administration later becomes a DOCA, ASIC says supporting documents should be attached because a claim may be rejected if it is not sufficiently evidenced.
Source: ASIC, Voluntary administration: A guide for creditors, read 23 September 2026. The administrator decides claims for the insolvency process. Get legal advice where the amount or ownership of materials is disputed.What happens to materials you have already paid for?
Do not assume that paying for materials means you can automatically keep, move or sell them. Ownership can depend on the building contract, whether the goods were incorporated into the work, where they are stored and whether a supplier retained title. Photograph and inventory anything on site, keep the invoices and proof of payment, and ask the administrator in writing about any disputed item. If a subcontractor or supplier wants to remove goods or asks you to pay them directly, get legal advice before agreeing. A direct payment can create a second problem without necessarily resolving what you still owe under the original contract.
What does it mean for you when your builder goes into administration?
When a builder goes into voluntary administration, an independent administrator takes control of the company, and creditors decide its future at a meeting usually held about five weeks after the appointment, or six around Christmas or Easter. Work on your site usually stops in the meantime. If the builder owes you work or money, you are one of its creditors, not a bystander.
Is administration the same as liquidation?
Administration is not the same as liquidation: administration pauses the company while creditors decide its future, and liquidation winds it up. Consumer Affairs Victoria puts it plainly: a builder in administration may not be insolvent and can keep operating, and the administration process is what decides whether it is. So the first question is not whether your builder has failed, but which way the administration is heading, and that answer arrives on a timetable. For the company side of the process, see how administration and a DOCA work for the company. This page stays with you, your build and your loan.
How long does the administrator have to decide?
The administration clock, as ASIC publishes it
- 8 business days. The administrator must hold the first creditors' meeting within eight business days after the administration begins. Source: ASIC, Information Sheet 74, Voluntary administration: a guide for creditors, asic.gov.au, last updated 17 December 2024, read 23 September 2026. Courts can extend these periods.
- 25 business days, or 30. The meeting that decides the company's future must be held within 25 business days of the appointment, or 30 business days if the appointment falls around Christmas or Easter, unless a court allows more time. ASIC says this is usually about five weeks after the administration begins. Source: ASIC INFO 74, asic.gov.au, read 23 September 2026. Courts can extend these periods.
- 15 business days. If creditors vote for a deed of company arrangement, the company must sign the deed within 15 business days of that meeting, unless a court allows longer. Source: ASIC INFO 74, asic.gov.au, read 23 September 2026. Courts can extend these periods. As someone owed work or money, you are usually an unsecured creditor and can vote.
To vote at a creditors' meeting you first lodge details of your claim with the administrator. Summarised from ASIC on the date shown. General information only, not legal advice.
The statutory decision meeting is ordinarily held about five weeks after appointment, or about six around Christmas or Easter, but that is not a guaranteed end date. ASIC says complex administrations can need more time and a court can extend the meeting deadline. Do not wait for the final insolvency outcome before working on the loan, insurance, site evidence and cost-to-complete position, because interest and the construction period can keep moving while the administration is extended.
Did your builder fail, or did your funder?
Builder failed and funder failed are two different causes with two different tracks. This page is about the first: the company building your home or premises has stopped. If the builder is ready and it is your lender that has stopped releasing money for its own reasons, read if your lender stopped funding instead. And if the administration has already turned into a winding up, the glossary entry on liquidation explains what changes.
What happens to your construction loan when the builder stops work?
When the builder stops work, a construction lender will usually pause further progress payments while it reassesses the build, but you still owe what has already been drawn and the interest on it keeps running. If the administrator keeps the builder trading and the lender remains satisfied with the contract, insurance and completion plan, the outcome can be a resumed facility rather than a permanent stop. What catches borrowers out is everything else that keeps moving while the site sits still.
What stops
- Progress payments to the builder
- Work on site
- The builder's insurance and supervision of the site (check, do not assume)
What keeps running
- Interest on the drawn balance
- The loan's construction period
- Your own obligations under the loan
What does the lender do first?
When a builder stops work, the lender commonly puts further draws on hold until it understands the new position. Do not assume money can go to the administrator or a replacement builder simply because it remains undrawn in the facility. Every construction draw is tied to an approved contract, stage and completion plan. If the administrator proposes to continue the old contract, increase the price or novate it to another builder, show the lender the proposal before you agree to it because each route changes what the lender is being asked to fund. The mechanics of the existing facility are set out in how progress claims and drawdowns work.
Have you lost the undrawn part of your construction loan?
Not necessarily. A pause in construction draws is not automatically the same as the lender cancelling the remaining facility. The undrawn amount is still subject to the lender being satisfied with the builder or restart proposal, updated cost to complete, valuation, construction timeframe, insurance and any extra money needed to finish. If the revised project no longer meets the lender's credit requirements, some or all of the undrawn amount may not be available for the revised build.
From our broking desk. General observations, not a quote or offer. Reviewed 23 September 2026.
This is what lenders actually look at first when a builder stops, and where replacement builds usually get stuck. Qualitative only: no timeframes and no figures, because every lender and every build is different.
What lenders usually ask for, in the order they ask:
- Written confirmation of who was appointed and when.
- Where the site is at, from a quantity surveyor or the lender's own inspector.
- The warranty position.
- An independent cost to complete.
- A signed fixed-price completion contract with a licensed builder.
- How any gap will be paid.
Where replacement builds usually stall at credit:
- The gap between what is left and what the finish costs is unfunded.
- The completion contract is not fixed price.
- The new builder is not acceptable to the lender.
- The loan's construction period has run out.
- The borrower's own financials have moved since approval, so a loan increase no longer services.
What borrowers get wrong:
- Paying the administrator or a new builder before the lender has seen the contract.
- Assuming the undrawn loan covers the finish at the old price.
- Assuming the builder's insurance still covers the site.
- Waiting for the administrator's decision before talking to the lender, when the construction period is already running.
Every lender sets its own policy and every build is different. This is what we commonly see, not what your lender will do. General information only, not a quote, an offer or financial advice.
What to have ready before you call your lender or broker
The fastest conversations with a lender start with the paperwork already in one place. Before you call, gather:
- Your building contract, the date you signed it and every signed variation.
- Every progress claim you have paid, with invoices and receipts.
- Your certificate of home warranty cover, if one was issued.
- The administrator's notice or first letter to creditors.
- Your latest loan statement showing what has been drawn and what is left.
- Your latest tax returns, BAS and business financials, because any loan increase is a fresh assessment of you as well as the build.
- Dated photos of the site as it stands.
What if the loan's construction period runs out?
Most construction loans give you a set period to finish the build. That period does not pause because your builder did, so an idle site eats into it. If the period looks like running out, raise it with the lender early rather than at the deadline. The questions a lender asks when time runs short are covered in when the facility term runs out, and where the current lender will not extend, a mid-build refinance is usually the next conversation.
What if you are paying rent and loan interest at the same time?
Many owners are renting while the build is stalled, so they carry rent and construction-loan interest together for longer than planned. For a self-employed borrower that can land at the same time as normal business costs. Do not assume home warranty will reimburse those carrying costs. South Australia's current BII guidance, for example, expressly excludes rent losses and loan interest, and other schemes have their own limits.
If the carrying cost is becoming unaffordable
- Contact the lender's hardship team before arrears if you can. Explain that the build has stalled because the builder entered administration and give the administrator's notice, current loan balance and current build position.
- Tell the lender what you can actually afford. For regulated consumer credit, Moneysmart says hardship options can include a payment plan, altered loan terms or temporarily reduced or paused repayments, depending on the lender's assessment.
- Keep the completion-finance track moving separately. A hardship arrangement can deal with repayments while the build is stalled, but it does not itself approve a new builder, extend the construction period or fund the completion gap.
- Escalate a consumer-credit hardship dispute if needed. Where the National Credit Code applies, ASIC says a lender generally has 21 days to respond when it has enough information to decide a hardship notice. A refusal must give reasons and AFCA details. Business-purpose and other unregulated facilities can have different rights, so check the loan purpose and contract.
Free financial counselling is available through the National Debt Helpline on 1800 007 007. General information only. Hardship rights depend on whether the credit is regulated consumer credit.
Will the lender look at the part-built home again?
Lenders usually look at a part-built home again before releasing anything more. The lender wants to know what the part-built property is worth now and what it will cost to finish, because both have moved since the loan was approved. A site that has sat open to the weather can read differently to an inspector than it did at the last progress claim. If the numbers no longer fit the loan you have, compare your construction finance options before the lender's review lands.
Who insures the site now?
Once a builder stops work, do not assume the site is still insured. In NSW, the government's guidance is that your builder should hold contract works insurance covering loss or damage to materials and work during construction, and that owners should tell their own home insurer in writing before building starts and check whether their policy covers damage or theft during construction. Source: NSW Government, Insurance requirements for contractors working on your home, nsw.gov.au, last updated 4 September 2025, read 23 September 2026. Contract works insurance is the builder's policy. Check who insures the site now.
Because it is the builder's policy, ask the administrator in writing whether it is still in force, and ask your own insurer what it will cover on a part-built home. Your lender will ask you the same question, so have the answer in writing.
Does home warranty pay if your builder is only in administration?
Whether home warranty pays when your builder is only in administration depends on the state and, in Victoria, on the date you signed. In NSW the Act's definition of insolvent includes a company under administration, but icare's own examples are bankruptcy and liquidation, so confirm with icare. Victoria's Home Warranty lists external administration as a claim event for eligible contracts signed on or after 1 July 2026. In Queensland, insolvency counts only once the builder's licence is also cancelled. If you are building your own home while self-employed, the certificate of cover your builder gave you at the start is the first document to find.
Scroll the table sideways to see every column.
| Jurisdiction | Current cover relevant to an incomplete home | Does administration itself trigger it? | Claim clock or first action |
|---|---|---|---|
| NSW | Home building compensation for eligible residential work over $20,000 with valid cover | Potentially. SIRA says owners with valid cover may be entitled to claim during external administration, while icare's public examples of insolvency use bankruptcy or liquidation. Confirm with icare. | For incomplete work, icare says the period of insurance is 12 months from when the builder failed to start or stopped work. Lodge a Notification of Loss within that period. |
| Victoria, contract before 1 July 2026 | Domestic building insurance under the older last-resort scheme | Not necessarily. Consumer Affairs Victoria says a builder in administration may not be insolvent and can keep operating. | Find the old DBI policy and ask the insurer whether the current event satisfies the policy trigger. |
| Victoria, eligible contract from 1 July 2026 | Home Warranty for eligible domestic building work over $20,000 | Yes. A company in external administration is a listed incomplete-work event. | Incomplete-work claim within 12 months after the relevant event. Incomplete work is capped at 30% of contract price within the $400,000 total-per-home maximum. |
| Queensland | Queensland Home Warranty Scheme for eligible fixed-price residential work | Not through the insolvency route on administration alone. The contractor must be insolvent and its licence cancelled, unless another valid contract-ending trigger applies. | For non-completion, the contract must have ended and the claim must be lodged within 3 months after it ends. |
| South Australia | Building Indemnity Insurance for qualifying domestic work of $20,000 or more that requires development approval | Yes. SAFA says a building company is considered insolvent for BII when an administrator or liquidator is appointed. | Contact the insurer and make the claim as soon as possible. Current new-policy limit is generally $250,000, depending on insurer and issue date. |
| Western Australia | Home indemnity insurance for relevant residential building work over $20,000 | HII responds to builder insolvency. WA's consumer guidance does not separately describe administration as its own trigger, so confirm the event with the insurer. | Contact the HII insurer first. WA says HII can cover lost deposit up to $40,000 and incomplete or defective work up to $200,000. |
| Tasmania | Current Financial Assistance Package while the future home warranty model is being developed | Yes for the package. CBOS expressly includes a builder or building company entering voluntary administration since 1 July 2021, subject to eligibility. | Apply with the contract, payment evidence and building approval documents. Incomplete-work assistance can be up to 20% of contract value, capped at $200,000. |
| ACT | Residential building work insurance or an approved fidelity-fund certificate | The ACT guidance uses insolvency as the trigger but does not separately define administration on the page. Confirm with the insurer or fidelity provider. | The ACT says the claim time limit starts when the homeowner becomes aware the builder has become insolvent, died or disappeared. |
| Northern Territory | Fidelity fund certificate for prescribed residential building work | Administration itself is not listed on the NT consumer page. The listed events include bankruptcy, death, disappearance or registration cancellation. | For certificates issued after 30 March 2026, reforms allow claims within 90 days of becoming aware of a defect or a trigger event. |
NSW: what the Act says, what the regulator says, and what icare says
The NSW sources, side by side
- The Act. For home building compensation, the Home Building Act 1989 (NSW) s 90 "Definitions" says a corporation is insolvent if it is a Chapter 5 body corporate. The Corporations Act 2001 (Cth) s 9 "Dictionary" defines a Chapter 5 body corporate to include a company that is under administration, that has executed a deed of company arrangement that has not yet terminated, or that is being wound up. Source: legislation.nsw.gov.au, Home Building Act 1989, current version from 10 June 2026; legislation.gov.au, Corporations Act 2001, Compilation No. 148; both read 23 September 2026. A definition used by other laws; on its own it does not decide an insurance claim. Read it with icare's own examples below and confirm with icare.
- The regulator. SIRA's statement is that if your builder is under external administration, homeowners with valid home building compensation cover may be entitled to claim if their building work is incomplete or has defects, and that if the administration leads to a successful restructure, concerns can then be pursued with the business directly. Source: SIRA NSW, Statement on builder collapse, sira.nsw.gov.au, updated 8 November 2023, read 23 September 2026; no later SIRA statement on the subject appeared in its news listing that day. NSW only. Issued during an earlier builder collapse; confirm the current position with icare.
- The insurer. icare describes HBCF as last resort cover that usually responds when the builder has become insolvent (for example, bankrupt or in liquidation), died, disappeared, or had its licence suspended for not complying with a court or NCAT order to pay you money. It may cover loss of your deposit and the cost to complete the work, up to the policy limit. Source: icare, HBCF: What am I covered for?, icare.nsw.gov.au, read 23 September 2026. No policy-limit figure is stated here; take it from your own certificate of cover.
- Over $20,000, and a 10 per cent deposit. The protections apply where the contract is valued at over $20,000 and home building compensation cover is in place. A builder can ask for no more than 10 per cent of the total contract price as a deposit before work starts, and any payment above that may not be recoverable under the cover. Source: NSW Government, Protecting yourself in case of builder insolvency, nsw.gov.au, last updated 1 September 2026, read 23 September 2026. NSW residential building work only.
- 12 months, and a Notification of Loss. For incomplete work, icare says the period of insurance is 12 months from the date the builder failed to start or stopped work. You can protect your right to claim by lodging a Notification of Loss form in writing within the period of insurance, and icare expects you to have taken appropriate steps to have the builder finish the work, saying it may reduce or reject a claim where you have not. Source: icare, Making a claim, icare.nsw.gov.au, read 23 September 2026. NSW home building compensation only. Check the dates on your own certificate of cover.
Read together, the Act points one way, the regulator says owners with valid cover may be entitled to claim, and the insurer's own examples of insolvency are bankruptcy and liquidation. None of those sources rules a claim out because the builder is in administration, and none guarantees a claim is accepted. Confirm the position with icare before you assume either way, and lodge within the time your policy allows. Lodge a Notification of Loss within the period of insurance and keep a record of every step you take to have the builder finish. Keep every progress claim, invoice and receipt, because what you paid and when will decide what is recoverable.
Victoria: it depends on when you signed
Victoria changed schemes this year, so the first document to find is your building contract and the date you signed it.
Two Victorian schemes, split by contract date
- Signed before 1 July 2026. Domestic building insurance may apply to work under contracts signed before 1 July 2026. It is last resort cover. Consumer Affairs Victoria says a claim for unfinished work may be limited to 20 per cent of the contract price, that the policy will not cover advance payments, and that a builder in administration may not be insolvent and can keep operating. Sources: Building and Plumbing Commission, Domestic Building Insurance and Home Warranty, updated 1 July 2026; Consumer Affairs Victoria, Domestic building insurance and insolvency, updated 5 February 2026; both read 23 September 2026. Applies to policies on contracts signed before 1 July 2026.
- Signed on or after 1 July 2026. Home Warranty applies to eligible domestic building work valued at more than $20,000 under eligible contracts signed on or after 1 July 2026. It may apply where the builder fails or refuses to complete or fix the work, and it is not limited to cases where the builder has died, disappeared or become insolvent. The maximum is $400,000 in total per home. Source: Building and Plumbing Commission, bpc.vic.gov.au, updated 1 July 2026, read 23 September 2026. Subject to eligibility, limits and exclusions. Your contract date decides which scheme applies.
- 12 months, and a 30 per cent cap. Under Home Warranty, the events that can support an incomplete-work claim include a builder that is a company in external administration, is insolvent, has had its registration cancelled, or has defaulted with the contract validly terminated. The claim, including costs to secure the site, must be made within 12 months after that event, and incomplete work is capped at 30 per cent of the total contract price including agreed variations, within the $400,000 per home. Source: Building and Plumbing Commission, Time limits and amounts for Home Warranty, updated 30 June 2026, read 23 September 2026. Eligible contracts signed on or after 1 July 2026 only. Subject to eligibility, limits, exclusions and claim assessment.
Victoria also caps what you can pay up front: a deposit cannot be more than 10 per cent on a contract under $20,000 or 5 per cent on a contract of $20,000 or more, and Consumer Affairs Victoria warns that home warranty may not cover work paid for before it is completed. Source: Consumer Affairs Victoria, Deposits and payments for building work, last updated 30 June 2026, read 23 September 2026. Victoria only.
So on a Victorian contract signed after the change, administration on its own is a listed event, and you do not have to wait for a liquidation. On a contract signed before it, the older scheme's question is whether the builder is insolvent, and an appointment of administrators does not answer that by itself.
Queensland: insolvency needs a cancelled licence as well
What the Queensland scheme's terms of cover say
- Insolvent and licence cancelled. A fixed-price residential contract ends for the scheme if it is validly terminated on the contractor's default, the contractor dies, the contractor is a company that no longer exists, or the contractor is bankrupt or insolvent and its licence is cancelled. For the last route, both must apply. Source: Queensland Building and Construction Commission Regulation 2018 (Qld) Sch 6 "Terms of cover for statutory insurance scheme", s 4 "When fixed price residential contract ends", legislation.qld.gov.au, version current from 1 September 2026, read 23 September 2026. Queensland residential work only.
- Reduced by what you still owe, claim within 3 months. Assistance for completion is the reasonable cost of completing the work, reduced by your remaining liability under the contract, and the claim must be made before the day that is 3 months after the contract ends. Contracts for 3 or more living units are not fixed-price residential contracts for the scheme. Source: QBCC Regulation 2018 (Qld) Sch 6, s 3 "Meaning of fixed price residential contract" and s 7 "Assistance for completion of work", legislation.qld.gov.au, read 23 September 2026. Queensland residential work only, not a contract for three or more units.
In Queensland, then, the appointment of an administrator does not by itself end the contract for the scheme. Unless the contract has been validly terminated for default, the builder's licence has to be cancelled as well, so watch the licence register as closely as the administrator's reports.
What about South Australia, Western Australia, Tasmania, the ACT and the Northern Territory?
The remaining jurisdictions are not interchangeable. South Australia expressly treats an administrator appointment as insolvency for BII, Tasmania currently has a financial-assistance package that expressly includes voluntary administration, while WA, the ACT and the NT use different trigger wording. Use the jurisdiction where the work is being done, the certificate date and the actual policy or scheme rules rather than assuming the NSW, Victorian or Queensland answer carries across.
South Australia: administration is enough to trigger the insolvency route
South Australia is unusually clear on the exact question this guide answers. SAFA says a building company is considered insolvent for Building Indemnity Insurance when an administrator or liquidator is appointed, so a BII claim can be made at that time. For policies under the current rules, qualifying domestic work generally needs to be $20,000 or more and require development approval. Current new-policy limits are generally $250,000, although the certificate issue date and insurer matter. SAFA also says reasonable site-security costs can be covered, while rent losses and loan interest are not.
Sources: SAFA, Building Indemnity Insurance FAQs and SAFA, Building Indemnity Insurance, read 23 September 2026.Western Australia: contact the HII insurer first
Western Australia requires home indemnity insurance for relevant residential building work over $20,000. WA says the policy protects against financial loss where the builder cannot complete or meet a valid defect claim because of death, disappearance or insolvency, and the consumer page says cover can include a lost deposit up to $40,000 and incomplete or defective work up to $200,000. If your builder enters administration, contact the insurer on the certificate first and ask whether the event satisfies the insolvency trigger. If a new builder takes over, WA also requires the replacement-builder and building-permit steps to be dealt with before the work simply carries on.
Sources: WA Building and Energy, Building or renovating your home and Building permit: amending builder's details, read 23 September 2026.Tasmania: the current answer is a financial-assistance package
Tasmania does not currently look like NSW or Victoria. CBOS says its Financial Assistance Package is intended to provide similar protection while the future home warranty model is developed. It applies, subject to eligibility, where a residential builder has died, disappeared or entered voluntary administration since 1 July 2021 and the owner paid for goods or services that were not received. For incomplete work, the payment can be up to 20 per cent of the contract price with a $200,000 maximum. The application asks for the signed contract, bank statements, invoices, receipts and building approval documents, which is another reason to build that evidence pack immediately.
Source: CBOS Tasmania, Financial Assistance Package for consumers affected by construction company failures, last updated 27 July 2026, read 23 September 2026.ACT: the claim clock starts when you become aware of insolvency
In the ACT, residential building work insurance can be an authorised insurance policy or an approved fidelity-fund certificate. ACT Planning says the claim time limit starts when the homeowner becomes aware that the builder has become insolvent, died or disappeared. The public guidance does not separately say that appointment of an administrator is automatically enough, so confirm that point with the insurer or fidelity provider rather than borrowing the rule from another state.
Source: ACT Planning, Residential building work insurance, read 23 September 2026.Northern Territory: check the certificate date and the trigger
The Northern Territory uses a fidelity fund certificate for prescribed residential building work. The NT consumer page lists bankruptcy, death, disappearance and cancellation of the builder's registration as the events that can activate the cover; it does not separately list administration. Reforms that began on 30 March 2026 raised the prescribed-work threshold to $25,000 and, for certificates issued after that date, allow claims within 90 days of becoming aware of a defect or a trigger event. Check the date on your own certificate because the reform is not retrospective.
Source: NT Government, Fidelity fund certificate, read 23 September 2026.What if you cannot find a warranty certificate, or the claim is declined?
Do not jump straight from "I cannot find the certificate" to "I have no cover". Check the relevant state register or insurer, ask the regulator whether a certificate should have been issued, and get the decision and reasons in writing if a claim is declined. Scheme review and dispute routes differ by state. At the same time, keep working the lender side, because an insurance dispute does not stop interest, protect the site or fund the completion gap. If there is ultimately no usable cover, the cost to complete has to be met from undrawn loan funds, a loan increase, other equity, private funding or your own cash.
Two nearby situations sit outside this section. A subcontractor owed money by the failed builder has a different set of rights, so start with if you are a subcontractor owed retention. And if you bought off the plan and the developer is in trouble, you hold a purchase contract, not a building contract, and the warranty questions above work differently.
Do you have to accept the administrator's new price, and can you end the contract?
You do not have to accept an administrator's higher price or vote for a deed of company arrangement. A building contract signed on or after 1 July 2018 also generally cannot be ended merely because the builder went into administration, so get legal advice before you terminate. Both answers have a lending consequence that the legal guidance does not mention.
What if the administrator offers a deed and a higher price?
What the published sources say about the offer and the contract
- You do not have to accept. The builder or the administrators may ask customers to agree to a higher contract price and other contract changes so they can finish the build, and may ask this as part of an offer for a deed of company arrangement. Customers do not have to accept revised offers or vote for a deed of company arrangement. Source: Consumer Affairs Victoria, Domestic building insurance and insolvency, consumer.vic.gov.au, updated 5 February 2026, read 23 September 2026. Get financial and legal advice before you decide, and show your lender any revised contract before you sign.
- Contracts signed from 1 July 2018. A right under a contract, including a right to terminate, cannot be enforced against a company merely because it has come under administration, or because of its financial position while it is under administration. The stay lasts for the administration, and longer if the administration ends in a winding up, subject to exceptions and court orders. Source: Corporations Act 2001 (Cth) s 451E "Stay on enforcing rights merely because the company is under administration etc.", legislation.gov.au, Compilation No. 148; application under the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (No. 112, 2017) Sch 1 item 17, to contracts entered into at or after the commencement of that Part on 1 July 2018; read 23 September 2026. Applies to building contracts signed on or after 1 July 2018 and has exceptions. Ending a contract for another reason, such as the builder not doing the work, is a separate question. Get legal advice before you terminate.
An offer to finish at a higher price can be the fastest way back to a working site, and it can also be the most expensive. Weigh it against what a replacement builder would charge, which is the comparison in the next section. A price rise from a builder in administration is a different conversation from a price rise from a builder who is still trading, because here the company asking for more is also the company that owes you.
What if the builder says it will resume under a DOCA?
If the company survives administration under a deed of company arrangement and wants to return to site, you may not need a replacement builder, but that does not mean the original funding simply switches back on. Ask for the proposed price, scope, program, registration and insurance position in writing and give the whole proposal to the lender before you sign. A lender may still want a fresh inspection, a revised cost to complete, evidence that the builder can finish and a new completion date. If the deed asks you to pay more, waive claims or accept a changed scope, get legal advice as well as lender approval before agreeing.
Can you end the contract because of the administration?
You cannot end a contract signed on or after 1 July 2018 merely because the builder is in administration. That does not mean you are locked in forever: a builder that stops doing the work may give you other grounds, and the contract itself will set out how default notices work. Those are legal questions about your contract, and the order you take steps in matters, so take advice before you send anything.
What does your lender need to see first?
Any variation you accept changes the cost to complete and the lender's security, so show the lender any revised contract before you sign it. The lender approved a build at a price under a particular kind of contract. A higher price, a new scope or a change from a fixed-price building contract to a cost-plus arrangement are all changes it will reassess, using the same tests set out in which building contracts a lender accepts. Signing first and asking second is how an approved loan becomes an unfunded one.
How do you replace the builder and keep your loan in place?
To replace the builder and keep your loan, get an independent cost to complete and a proposed fixed-price completion contract from a licensed builder, then put both in front of the lender before you commit. Once the lender is satisfied with the builder, contract, warranty, permit position and funding gap, the completion contract can be executed and draws can be set up for the restart. Treat the replacement as a fresh approval of the build rather than a formality.
Scroll the table sideways to see every column.
| Item | Why the lender asks | Who provides it |
|---|---|---|
| Confirmation of who was appointed and when | It shows the lender who now controls the old contract and who it can deal with | You, from the administrator's notice to creditors |
| A site inspection or quantity surveyor report | It records what has been built, what has been paid for and what state the site is in | A quantity surveyor or the lender's own inspector |
| An independent cost to complete | What is left in the loan is rarely what the finish now costs | A quantity surveyor or an independent estimator |
| A signed fixed-price completion contract | The lender funds a known price, not an open-ended one | You and the replacement builder |
| The new builder's licence and insurance | The lender assesses the new builder much as it did the first | The replacement builder |
| The warranty position | A claim, or no cover at all, changes where the money to finish comes from | You, from the insurer or scheme |
| How any gap will be paid | The lender will not restart draws into a build that cannot be finished | You, with your broker |
Why you need an independent cost to complete
An independent cost to complete almost always differs from what is left on the old contract. A new builder is pricing work someone else started, often with defects to rectify, materials to re-order and a site to re-secure, and it carries risk the original builder did not. An independent figure gives you something to test the replacement quotes against, and gives the lender a number it did not get from the party asking to be paid.
Which report do you need: defects report, cost to complete, valuation or insurer inspection?
They answer different questions and one does not automatically replace another. A distressed build can need all four because the insurer, lender and replacement builder are assessing different risks.
Scroll the table sideways to see every column.
| Document or inspection | What it answers | Who usually relies on it |
|---|---|---|
| Building defects report | What existing work is defective, incomplete or non-compliant? | You, your lawyer, insurer and replacement builder |
| Independent cost-to-complete or QS report | What will it cost to rectify, restart and finish from the site as it stands? | Lender, insurer and you |
| Lender valuation or progress inspection | What is the lender's security worth now and, where relevant, on completion? | The construction lender or refinancing lender |
| Warranty insurer or scheme inspection | What unfinished or defective loss does the scheme need to assess before the site changes? | The warranty insurer or statutory scheme |
The order matters. Ask the warranty insurer whether it wants to inspect before rectification starts, then make sure the lender's inspection and independent cost-to-complete process capture the same site condition. If you change the site first, you can make the later evidence harder to reconcile.
What the completion contract needs to look like
A completion contract needs a fixed price, a defined scope measured from the site as it stands, and a licensed builder. The contract should say plainly what stage it starts from and how each progress claim will be measured, so the lender can match every draw to work done. Ask the replacement builder what home warranty cover will apply to the completion work and get the certificate before work starts. If you signed originally in Victoria, the date of the completion contract can also matter for warranty, which is worth raising with the regulator before you sign.
Who is responsible for defects left by the original builder?
A replacement builder does not automatically become responsible for every defect created by the original builder. Before signing, identify existing work and known defects separately, record what must be demolished or rectified, and make the completion contract clear about what the replacement builder is pricing, accepting, excluding and warranting. The new builder is responsible for the work it agrees to perform, while liability for the first builder's defective work can remain a separate contract, warranty or insolvency issue.
This is why a replacement quote alone is not enough. If the scope simply says "complete the house", the lender, insurer and both sides to the new contract can later disagree about whether correcting an old defect was included. A defects report plus a measured completion scope gives everyone a cleaner starting line.
Can the replacement builder start straight away?
Do not assume so. Before non-urgent completion work restarts, get written instructions from the warranty insurer or scheme, the construction lender and the relevant certifier, building surveyor or permit authority. The insurer may need evidence of the site as it was left, the lender needs to approve what its remaining money will fund, and the approval record may need to be changed before a new builder can lawfully continue. Urgent work to make the site safe is different, but document it and tell the insurer and lender.
Do you need to change the builder on the permit or tell the certifier?
Often, yes, but the process is state-specific. In Victoria, a building permit is suspended when the builder named on it is no longer engaged and the suspension ends when the permit is amended with the new builder's details. Western Australia has a specific process to amend a building permit to substitute a replacement builder. Queensland warns that missing inspection and compliance certificates from the original work can delay a non-completion claim and tells owners to contact the building certifier. In the ACT, the building approval belongs to the landowner rather than a particular builder, but a newly appointed licensed builder still needs the required commencement notice before work starts. Treat the permit and certifier file as part of the replacement-builder approval, not an afterthought.
Sources: Building and Plumbing Commission Victoria, Building permit suspensions; WA Building and Energy, Building permit: amending builder's details; QBCC, Building approval associated with non-completion; and ACT Planning, all read 23 September 2026.What the lender checks on the new builder
A lender checks a replacement builder much as it checked the first: licence, insurance, track record and capacity to take on the job. How that assessment works in practice is covered in how lenders assess a builder. A builder the lender cannot get comfortable with is one of the commonest reasons a replacement build stalls, so ask the lender what it needs before you commit to one.
Should you take over as an owner-builder?
Taking over as an owner-builder changes two things at once: the warranty position, because the protections above attach to building work done by a licensed builder under a contract, and the lender's risk, because it is now funding someone who has not built before. Many lenders will not fund it at all. If you are weighing it up, read funding an owner-builder finish, and check what a lender requires from an owner-builder before you tell the lender that is the plan.
How do you fund the gap to finish, and what if there is no warranty cover?
To fund the gap to finish, add what is left in the loan to any warranty payout, set that against the cost to finish, and fund the difference before the new builder starts. The difference is the gap, and it is the number the lender will ask about before anything else restarts.
Working out the gap
Start with the independent cost to complete. Take away the undrawn part of your loan. Take away any warranty payout you can rely on, and only once you know how it will be calculated. What remains is the gap, and it has to be covered by something other than the loan you already have. Two scheme rules shape the payout side of that sum. In Queensland, assistance for completion is reduced by what you would still have owed under the contract, so the payout is not the full cost of finishing. In Victoria, incomplete work may be limited to 20 per cent of the contract price on the older scheme and is capped at 30 per cent on Home Warranty. Sources: QBCC Regulation 2018 (Qld) Sch 6 s 7, legislation.qld.gov.au, current from 1 September 2026; Consumer Affairs Victoria, updated 5 February 2026, for contracts signed before 1 July 2026; Building and Plumbing Commission, updated 30 June 2026, for eligible contracts signed on or after 1 July 2026; all read 23 September 2026. Subject to each scheme's eligibility, limits and exclusions.
When the payout and the lender do not line up
A warranty payout and a lender's timetable rarely line up. The claim is assessed on the scheme's schedule; the lender wants the gap funded before the next draw; the new builder wants a deposit before starting. If you are relying on a payout you do not yet have, say so to the lender at the start, because some funding options can carry you until it arrives and others cannot. If your lender will not stretch, whether your lender will fund a shortfall sets out how that decision is usually made.
Scroll the table sideways to see every column.
| Source | When it fits | What it needs | Watch-out |
|---|---|---|---|
| Undrawn loan | Always the first source, for what it covers | An approved completion contract and a restart of draws | It was sized to the old price, not the cost to finish |
| Warranty payout | Where a scheme applies and a claim is accepted | A valid certificate, a claim lodged in time and the insurer's assessment | Timing, caps and deductions rarely match the lender's schedule |
| Loan increase with the same lender | Where the finished value supports more borrowing and servicing still works | A fresh assessment of you, the build and the new contract, including current business financials | The lender may decline or ask for more security |
| Second mortgage behind the construction loan | Where there is equity and the first lender consents | First lender consent and a clear way to repay | Consent is not automatic, and the cost is higher |
| Private lending | Where a bank will not move in the time the build needs | Security, a realistic exit and a completion plan | Short terms and higher costs, so the exit must be real |
| Own funds or equity elsewhere | Where cash or another property can cover the gap | Evidence of the funds, or a separate loan against the other property | It ties up funds or security you may need later |
For the layered option, see a second mortgage behind a construction loan. Where speed matters more than price, private lending and, for short, well-secured needs, caveat loans are the usual routes, each with a clear exit. None of them replaces the need for a completion contract the lender can see.
Why a loan increase can stall for a self-employed borrower
A loan increase can stall for a self-employed borrower because the lender reassesses you on your current financials, not the ones you were approved on. If your business has had a softer year since approval, servicing can fail even though the build itself is sound, which is usually when a second mortgage or private funding with a clear exit comes into the conversation. Ask your accountant to have your latest returns and BAS ready before the lender asks, and see what lenders check on a self-employed borrower.
Business premises and small developments
Statutory home-warranty and indemnity schemes are designed around residential or domestic building work, so a purely commercial shop, workshop or office build will generally not have the same safety net. Queensland also excludes a person building three or more residences from its non-completion claim path. That is the situation owners are often least prepared for: if no residential scheme applies, the cost to complete and funding plan are the whole answer rather than half of it. Confirm the classification and scheme eligibility before assuming there is no cover, especially on mixed-use or multi-unit work.
Whichever source fills the gap, get the numbers in front of someone who can see the whole position before the new builder is signed. If the gap is the problem, that is what we do: talk to us through our construction finance options.
When a builder goes into administration mid-build, the debt does not stop and further construction draws are usually paused while the lender works out what happens next. In the first 48 hours, tell the lender and warranty insurer or scheme, document and secure the site, lodge your creditor claim and find the contract, payment, permit and insurance records. The path then forks: the existing builder may resume under a DOCA, or you may need a replacement builder. Warranty rules differ materially across Australia, and the lender must see a reliable cost to complete, an acceptable contract or restart proposal, the permit and certifier position, and a fully funded gap before construction money can safely start moving again.
Key takeaway: preserve the claim and the site first, then line up insurer, lender, certifier and builder before you commit to the restart.Frequently asked questions
Check ASIC's Published notices website, where administrators must advertise creditors' meetings, and your state building regulator's licence register for the builder's licence status. With smaller builders the first sign is often that calls go unanswered and nobody attends the site, so check both before you approve another progress claim. The first steps set out what to do next.
Your house can still be finished, but who finishes it depends on what creditors decide at the administration's decision meeting. If the company is returned to its directors or a deed is agreed, the builder may come back and finish, sometimes at a new price. If the company goes into liquidation, you will usually need a replacement builder and, where a scheme applies, a home warranty claim.
No. An administrator is appointed to decide a company's future and the company may go back to its directors under a deed; a liquidator is appointed to wind the company up and realise what it owns. A builder in administration can still come back to finish your job, while a builder in liquidation is being wound up and almost never returns to finish.
Yes. You still owe what has been drawn, and interest normally keeps running on the drawn balance. If work stops, the lender will usually pause further progress payments while it reassesses the builder, contract, warranty position and cost to complete. Whether draws later resume with the existing builder or a replacement depends on the lender and the revised completion plan.
Not necessarily. A pause in draws is not automatically the same as cancelling the undrawn facility. The lender will usually reassess the builder or restart proposal, cost to complete, valuation, construction period, insurance and funding gap. Ask whether the undrawn limit is only on hold or whether any part has actually been cancelled, and get the restart conditions in writing.
Whether you get your deposit back depends on your state's warranty scheme and how much you paid. In NSW, icare says home building compensation may cover loss of your deposit up to the policy limit, and a builder can ask for no more than 10 per cent of the contract price as a deposit, with any payment above that possibly not recoverable. In Victoria, the deposit cannot be more than 5 per cent on a contract of $20,000 or more, and Consumer Affairs Victoria warns that insurance may not cover advance payments. Keep every receipt, because what you paid and when decides what is recoverable. The deposit cap in every state and territory is set out in deposit and progress payment rules by state.
In Victoria yes, for eligible contracts signed on or after 1 July 2026, because Home Warranty lists external administration as a claim event (Building and Plumbing Commission, read 23 September 2026, subject to eligibility and limits). In NSW possibly: the Act's definition of insolvent reaches a company under administration and SIRA says owners with valid cover may be entitled to claim, but icare's own examples are bankruptcy and liquidation, so confirm with icare. In Queensland, not on administration alone: the builder must be insolvent and have its licence cancelled. The state-by-state table sets it out with sources.
No. There is no single Australian deadline. In NSW, icare says the period of insurance for incomplete work is 12 months from when work stopped and a Notification of Loss within that period protects your right to claim. Under Victoria's Home Warranty for eligible contracts signed on or after 1 July 2026, an incomplete-work claim generally must be made within 12 months after the relevant event. In Queensland, a completion claim must be made before the day that is 3 months after the contract ends. Tasmania, the ACT, NT, SA and WA have different triggers, certificate rules and claim processes, so use the state-by-state table and your own certificate rather than borrowing another state's deadline.
Do not assume it does. Scheme benefits and exclusions differ by jurisdiction, and South Australia's current Building Indemnity Insurance guidance, for example, expressly excludes losses related to rent and interest on loan payments. If carrying both is becoming unaffordable, contact the lender's hardship team before arrears and explain that the build has stalled because of the builder's administration. A hardship arrangement deals with repayments, not the separate approval needed to restart construction, and business-purpose facilities can have different rights.
Paying for materials does not always prove that you own them. Ownership can depend on the building contract, where the goods are stored, whether they were incorporated into the work and whether a supplier retained title. Photograph and inventory the site, keep invoices and proof of payment, and get legal advice before allowing disputed goods to be removed or paying a supplier directly.
Then you have a gap, and it needs a funding source before the new builder starts. The usual sources are a loan increase with the same lender, a second mortgage behind the construction loan, private lending or your own funds, each with its own conditions, as the funding table sets out. You can check your eligibility before you talk to a lender.
Not usually. The statutory schemes discussed here are designed around residential or domestic building work, so a purely commercial shop, workshop or office build generally will not have the same completion cover. Mixed-use and multi-unit projects need their own eligibility check. If no scheme applies, the owner must fund the completion gap from the existing facility, other finance or their own funds.
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