Builder Gone Bust Mid-Build: Your Options

The call usually comes on a Friday: the builder’s company is in liquidation, the site is silent, and you are somewhere between foundations and second fix with money paid ahead. What happens next is largely decided in the first days — by whether you secure the position, terminate correctly, and aim the recovery effort where money actually exists.

The First 72 Hours

• Confirm the process: liquidation, receivership, examinership or SCARP — formally verified, because your rights differ under each;
• Stop the money: cancel payments in flight; anything paid now is a donation to the creditor pool;
• Freeze-frame the site: comprehensive dated photos and video, an inventory of materials, invoices matched to what is physically there;
• Secure what is yours: paid-for materials documented before anything leaves — and advice before anyone removes anything;
• Do not terminate yet: the contract’s insolvency and termination clauses are the map — follow them precisely so the completion claim stays clean.

The Lawful Restart

Getting the build finished is the real objective, and it has a sequence: proper termination under the contract; a professional assessment of the works as left (your claim’s baseline and the new contractor’s scope); certification and insurance continuity addressed so the completing contractor proceeds on a clean regulatory footing; and a real contract for the completion works — this time with the protections the first one lacked (contracts review). The extra cost of completing beyond the original price is the core of your claim — documented from day one.

The Recovery Map

File the liquidation claim, then look elsewhere: bonds where the contract provided one; the structural warranty on new homes, which generally survives builder failure (warranty claims); insured professionals and certifiers whose design, supervision or certification failed (professional negligence); set-off of sums you still hold; and personal guarantees where they actually exist. Director recoveries beyond that are rare and fact-specific — anyone promising them easily is selling. The full practice picture: builder insolvency.

The Honest Arithmetic

Some of the loss usually stays lost — saying otherwise would be selling false hope. The productive question is allocation: which recoveries are real, what each costs to pursue, and where your remaining money serves you best — often in finishing the house well. That arithmetic, done bluntly in the first consultation, is worth more than any amount of righteous litigation.