Premier backs call to not bail out beleaguered builder

Refusing to rescue collapsed building company Porter Davis was the right call, Victorian Premier Daniel Andrews says, as the government investigates whether the firm left customers uninsured.

The company went into liquidation last week, leaving clients desperately seeking answers as more than 1700 Victorian and Queensland homes were left in the lurch.

Mr Andrews confirmed Treasurer Tim Pallas spoke to Porter Davis but chose not to proceed with a bail out.

"We've made the right call here," he said on Thursday.

"If the bank is not prepared to fund you because your fundamentals are just not there, then I don't know that would be a business that the Victorian government would want to bail out."

Mr Andrews did not rule out supporting affected customers, saying his government was assessing options. 

But Opposition Leader John Pesutto has criticised the government's actions, saying it did not take steps to prevent the company's collapse. 

"It's always better and easier to deal with a company in a state of distress before it goes into liquidation," he said.

The premier confirmed his government was investigating whether Porter Davis illegally left customers uninsured after taking their deposits.

Builders in Victoria have to buy domestic building insurance policies on behalf of homeowners before they take deposits or money for projects of more than $16,000.

The requirement falls under the Domestic Building Insurance Ministerial Order.

"We are looking at that actively," Mr Andrews said.

"I just want to remind everybody in this industry, the law applies to everyone. It's not a matter of choosing to lodge those insurance premiums."

Liquidators Grant Thornton on Tuesday held a webinar for Porter Davis customers following the company's collapse, where Said Jahani suggested some clients were without insurance.

Mr Jahani said 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.

Melbourne resident Eric Poon, 33, says he is among Porter Davis customers left without insurance and argues the suggestion some people fell through the gap is an attempt to rationalise the home builder's actions.

He and wife Abby Zhong paid the deposit for their Porter Davis home at Lilydale in Melbourne's outer northeast in December 2020, but the land was only titled last week because of delays by a developer handing over the property.

Porter Davis told the couple it would arrange insurance for them, but when they contacted the firm after the home builder's demise, they were told they didn't have a policy, Mr Poon said.

The Victorian Managed Insurance Authority could not find an insurance policy in Mr Poon's name and the couple faces paying off two mortgages - which includes their residence at Glen Waverley - after interest rates skyrocketed. 

"This has put a considerable financial strain on us," Mr Poon told AAP.

"We were hoping to complete the construction of our new home as soon as possible so that we could rent out our current apartment and generate some cash flow."

He was also concerned about allegations Porter Davis was trading while insolvent and said the government should care for people whose livelihoods were put at risk by the collapse of building companies.

"We are already dealing with a rental and building shortage crisis and now consumers don't feel protected and are afraid to build," Mr Poon said. 

Porter Davis customers unsure if they have domestic building insurance can contact the Victorian Managed Insurance Authority, which is dealing with claims in the state.

Other firms also offer domestic building insurance.

The Queensland Building and Construction Commission is dealing with claims from the Porter Davis fallout, with about 1500 properties in Victoria and 200 in Queensland estimated to be affected by the company's demise.

Those without a certificate of insurance should contact liquidators Grant Thornton.

Grant Thornton has been contacted for comment.