Homeowners caught up in the collapse of WA builder Builton Group will only be able to claim up to $100,000 in losses for an alternative builder to finish their half-built homes, potentially leaving many heavily out-of-pocket.
The Burswood-based builder, which also trades under the brands Platinum Homes and Aspireon Homes, went into external administration on Monday, owing creditors and banks least $30 million.
Cor Cordis has been appointed as voluntary administrator of the company, with partner Dino Travaglini advising homeowners on Tuesday to contact their offices or Builton's insurer, QBE, to determine if they can make a claim.
"Building and construction is probably best described as being suspended at the moment, although I think it's fair to say the continuation of any trade and building will be difficult, but nonetheless it is one of the options that we are looking at," he said.
"There are approximately 110 to 130 homes which are still to be built by BuiltonCorp, we are looking at what can be done to complete those homes, and probably more importantly, looking to see how those homeowners can be best protected.
"We'll be taking steps to try and secure an alternate builder for the home owners and will be working with the home owners and those that have insurance will be working with QBE."
QBE's domestic construction insurance policy caps insurance claims for deposits at $20,000 if no works have commenced. Where works have commenced, homeowners can claim up to $100,000 for any losses they incur.
The insurance policy, a requirement of the state government, is triggered if a building company becomes insolvent and aims to cover any losses or damages as a result of incomplete work.
BuiltonCorp had 350 unsecured creditors, some owed six-figure amounts, with Mr Travaglini acknowledging those creditors - which mainly consist of sub-contractors and trade suppliers - would be in "some stress".
"It's early days to say what return, if any, will be provided to those creditors but on initial review the assets of the company don't appear to be sufficient to allow any significant return, if any return at all," he said.
Nearly 40 staff lost their jobs as a result of the collapse.
"Employees under corporations legislation do have our priority of repayment and we'll be working to try to return as much as we can to those employees for their unpaid entitlements," Mr Travaglini said.
"If the company is placed into liquidation, there is a Federal government scheme which is accessible... the Fair Entitlements Scheme... assuming the company is qualified and the employees qualify, then certain, if not most, of their entitlements will be protected by that scheme."
Cor Cordis will hold its first meeting with creditors on or around February 3.
Mr Travaglini said it appeared the company's commercial building arm had been the catalyst for its financial troubles and eventual collapse.
Builton Group had residential and commercial building projects underway throughout the metropolitan area in areas such as Tapping, Success, Clarkson, Bulwer, Wandi, Spearwood, Burswood and Maylands.
The company has been run by managing director Troy Felt since 2004.
The closure comes two months after Collier Homes went into liquidation in November and high-end builder Quattro Homes being placed into administration in September.
Pitaro Homes and Nominated Homes went into liquidation in August following the collapse of Geraldton-based builder Shane Crothers Homes in June.
QBE has information on Builton's administration and a copy of its insurance policy is available here.
Cor Cordis has additional information here.